FactCheck Social Media

No, the Australian government isn’t a privately owned US company

2020-11-11 19:23:41

The Statement

A number of social media posts claim the Australian government is keeping a secret that it’s “privately owned American company”.

One Facebook post is headed, “AUSTRALIAN GOVERNMENT IS REGISTERED AS A PRIVATELY OWNED AMERICAN COMPANY”.

The post reads, “Is it a secret? I got banned from commenting on ScoMo’s Facebook for saying that the Australian Government is registered as a Privately Owned American Company…which it is. The Treasury website has a document released under FOI that clearly shows it is so.”

The post links to the Treasury website and features documents, as per the heading on the relevant page, “relating to registration with the SEC of the Australian Government as a privately owned American company”.

Similar posts can be found here and here, with one going on to claim people were being “controlled by a U.S. facist (sic), totalitarian, corporation”.

At the time of writing, the Facebook posts had been shared more than 220 times and received at least 150 comments and reactions combined.

A Facebook post
 A Facebook post claims the Australian government is a “privately owned American company”. 

The Analysis

While it is true that the Australian government has registered with the US Securities and Exchange Commission (SEC), this is a routine process for the purposing of selling bonds and other financial instruments unrelated to the formation of a corporation – privately owned or otherwise.

The SEC is tasked with protecting investors and overseeing US financial markets. As part of that brief, it requires most parties selling securities – essentially any tradable financial products – to provide certain information to potential buyers.

It says that this allows investors to make informed purchases of securities, as set out under the Securities Act of 1933.

SEC filings show that the Commonwealth of Australia, via its Washington embassy, has lodged a number of documents with the commission since 2002.

For example, in 2006 the government filed a statement with the SEC relating to the issuance of Telstra shares, in which it then had a controlling stake.

The document referenced in the Facebook post is a 2009 filing, which identifies that the Commonwealth of Australia was amending a registration statement under the 1933 Act.

The document relates to the government’s 2008 decision to guarantee bank deposits and wholesale funding in the wake of the global financial crisis. The document makes no mention of the government establishing a foreign corporation.

The Treasury website lists the document as being released under a Freedom of Information (FOI) request seeking access to “all documents that confirm the following: registration with the SEC of the Australian Government(Commonwealth of Australia) as a privately owned American company, file number:333-163307 CIK:0000805157”.

These codes represent the government’s “central index key (CIK)” with the SEC, while the file number relates to a 2009 registration form for the so-called “state guarantee scheme” in which the federal government guaranteed the borrowings of Australia’s states and territories.

That form is identified as being a “registration statement of securities of Foreign Governments and Subdivisions”, and again it contains no reference to establishing a foreign corporation.

Professor Sinclair Davidson, an expert in institutional economics from RMIT University in Melbourne, told AAP FactCheck in a phone interview that the title of the Treasury web page featuring the FOI request was misleading as the document did not show the government was a “privately owned American company”.

“In order to comply with American regulations to borrow money in America and to sell securities to American citizens, (Australia) has to comply with American securities law,” he said.

“(The document) more or less provides investors information about Australia for the purposes of providing information to the market, but it’s stated very clearly within that document Australia is a sovereign nation.”

Prof Davidson added that the implication that somehow the document showed Australia was “beholden to some other foreign power” was a “conspiracy theory”.

Dr Karen Alpert, a lecturer from the University of Queensland’s School of Business, told AAP FactCheck the document on the Treasury website relates to government securities but it did not mean officials were “registering Australia itself”.

She added that it appeared Treasury had just used the FOI request wording for the title of the corresponding page on it’s site, “even though that does not describe what’s happening”.

A spokeswoman for Treasury told AAP FactCheck in an email that “the Australian government is not a US corporation”.

“The Australian government was registered with the US Securities and Exchange Commission for the purposes of guaranteeing ADI debt securities covered by the Guarantee Scheme for Large Deposits and Wholesale Funding, which ended in 2015,” she said.

NSW and Queensland are also registered with the SEC for similar reasons.

Parliament House in Canberra
 A claim the Australian government is a US corporation has been dismissed as a “conspiracy theory”. 

The Verdict

The Australian government has not been registered as a privately owned US corporation. Documents purportedly showing this registration actually represent SEC filings for the purpose of dealing in bonds and other securities.

False – Content that has no basis in fact.

* AAP FactCheck is accredited by the Poynter Institute’s International Fact-Checking Network, which promotes best practice through a stringent and transparent Code of Principles. https://aap.com.au/