Lex Greensill, Julie Bishop pitch supplier payday scheme directly to Mathias Cormann in Davos

Mathias Cormann was lobbied about the controversial scheme for 150,000 public servants as she hit the snow in Davos.

The meeting with the Finance Minister came only a few months after Mr Greensill pitched the same idea directly to Prime Minister Scott Morrison at a private meeting in late October 2019. Picture: AFP

Controversial supply chain financier Lex Greensill pitched his payday lending for 150,000 public servants scheme directly to ­Finance Minister Mathias Cormann during a high-powered meeting with former foreign Minister Julie Bishop and former UK prime minister David Cameron.

Faced with criticism of Greensill Capital’s core reverse factoring business across the globe, the Australian-born billionaire financier has been pitching an expansion into payroll services for much of the past year, targeting major companies as well as local, state and national governments for his “revolutionary” early payment scheme for wages.

Greensill’s business has hit rough waters in Australia this year, including a Small Business Ombudsman’s investigation of supply chain financing products that helped corporate giants and Greensill clients CIMIC, Telstra and others delay payments to small suppliers.

 

But in January, while hitting the snow with his new Asia Pacific chairman Ms Bishop at the annual billionaires meeting in Davos, Mr Greensill tapped Senator Cormann to pitch his idea — which even Senator Cormann’s department calls “payday lending”.

The scheme, already on offer in the UK, allows workers to draw down their pay as it accrues, rather than receiving a fortnightly or monthly payment. Greensill has described the scheme as a “wages on demand” mechanism, and has bristled at suggestions it is effectively a payday lending scheme.

But officials from Senator ­Cormann’s Department of Finance referred to it in those terms, telling the minister in a briefing note prepared ahead of the meeting — and seen by The Australian — that it was “economically similar to payday lending”.

“Except that the financing and administration costs are met by the employer and not the employee and — at the end of each pay cycle — the employer would be responsible for repayment direct to the lender,” the briefing note said.

Former British PM David Cameron. Picture: Getty Images

For corporate clients Greensill charges a fee and an interest rate — which it claims is lower than bank rates — for ­providing finance from its own bank and international pension funds.

A spokesman for Greensill said the wages-on-demand offering is free to employees and is provided at no charge to the UK’s National Health Service.

Speaking to reporters at Davos, Mr Greensill said the scheme was already being rolled out to an unnamed client in the UK, and his company planned to send the idea live in Australia by June 2021.

Senator Cormann’s department is responsible not only for federal government procurement, but is in the middle of a $500m project to expand the sharing of services between government departments, potentially including a central payroll hub for the country’s 150,000 federal public servants.

Senator Cormann would not comment on Tuesday on the details of the discussion, but confirmed he met with a Greensill Capital delegation — including Mr Greensill, Ms Bishop and Mr Cameron — on the sidelines of a function arranged by Ms Bishop in her capacity as Australian ­National University chancellor.

“Ms Bishop asked the minister to meet with Mr Greensill and former UK prime minister David Cameron in the margins of that function. She is the chair of Greensill Asia-Pacific and as such is an official representative of that organisation,” a spokeswoman said. She added that the meeting was “consistent with the requirements under the Statement of Ministerial Standards”.

“At that event, as is the case every year when the minister has attended the World Economic Forum in Davos, he met with many of the Australian businesses and Australians working in businesses in other parts of the world who were attending the World Economic Forum in Davos at that time,” she said.

Asked if Mr Greensill’s pitch had met with a positive reception from the Finance Minister, Senator Cormann’s office said the government was “not considering any changes in this space”.

The meeting with the Finance Minister came only a few months after Mr Greensill pitched the same idea directly to Prime Minister Scott Morrison at a private meeting in late October 2019.

Senator Cormann’s trip to Davos in January cost taxpayers $34,600.56, according to parliamentary records, including $14,500 in airfares, $2278 in accommodation and meals and $15,405 in total staff travel costs.

The Finance Minister’s 10-day trip included speaking on two forum panels, in which he defended Australia’s coal industry and the federal government’s approach to climate change.

At the same time Lex Greensill went on a charm offensive, including unveiling his company’s newest recruit, Ms Bishop, as the chair of the Asia-Pacific arm of Greensill Capital.

A Greensill spokesman declined to comment.