On Valentine’s Day 2008, Scott Morrison, the man who was to become Australia’s first Pentecostal prime minister, rose to his feet to give his inaugural speech to parliament.
He paid tribute “to those who have been instrumental in my journey” and had helped form “the values and the vision that I intend to bring to this house”. He moved on to name three “dedicated church leaders” who had “greatly assisted” him.
They were Brian Houston of the evangelical mega-church Hillsong, the Reverend Ray Green, and Leigh Coleman.
The Reverend Ray Green is a Uniting church minister. Morrison, with his parents, began his lifelong journey of faith in that church.
Brian Houston is one of the world’s most powerful pastors, the founder and head of the Hillsong empire, which grew from its home in the west of Sydney to attract tens of thousands each week to celebrate in mega-churches around the world. Morrison’s relationship with Houston has been controversial. Houston was censured by the Royal Commission into Institutional Responses to Child Sexual Abuse for failing to report sexual abuse by his father.
But the third man Morrison named in his maiden speech, Coleman, has remained largely obscured from public view.
Yet just two years before Morrison entered parliament, Coleman’s work as CEO of Hillsong Emerge, the charitable arm of the Hillsong church, had been in the Labor party’s sights. Labor was probing the Howard government for vulnerabilities over its links to the mega-church amid fears Pentecostalism would lead to the rise of a new religious right. In 2005 and 2006 Leigh Coleman was mentioned many times in both the New South Wales and federal parliaments, but by the time Morrison stepped up in Canberra it seemed that nobody remembered him.
But over the past five years Coleman’s name may have become more familiar in government procurement circles thanks to a company he founded and runs winning more than $43m in federal contracts, mostly from defence, while being a registered charity set up to address Indigenous unemployment and disadvantage.
The company, ServeGate Australia, subcontracts the work out to conventional, almost entirely non-Indigenous consultancies and uses the profits to pay Coleman and other staff’s salaries so they can provide mentoring to a small number of Indigenous businesses. Two of the businesses being helped are run by ServeGate’s Aboriginal shareholders.
The company’s website makes no mention of its charity status, and companies that received subcontracted work through ServeGate have told the Guardian they were not aware it was a charity. ServeGate said the website dated from before the company was a charity, and was soon to be refreshed.
Coleman is a long-term family friend of the Morrison family. He says the last time he saw the prime minister was at the funeral for his father, John, “who I knew very well”. Before that, he had seen him only once in recent years, on a deeply personal matter.
“I have certainly never used or misused my relationship with Mr Morrison.” ServeGate, he told the Guardian, is apolitical, and works with all sides of politics.
Mentorship and microfinance
Morrison has always been frank about his faith, and also insisted “the Bible is not a policy handbook”.
But there are networks, both of people and ideas, that have informed him, and some of these are exemplified in the person of Coleman, who has spent his career in Christian-based charities operating in business mentorship and microfinance – providing small loans to the poor with the aim of helping them to start businesses or become self-employed.
He has played a key role in bringing an idea originally aimed at the developing world to Australia, and to Indigenous communities. Particularly important is his work founding the charity Many Rivers, of which he was CEO until 2014. He left the board of Many Rivers to start ServeGate Australia.
The Indigenous businesses that have been helped under the model give Coleman good reports. Daniel Browne, the public officer of the Sydney-based plant hire company Koori Cartage, says Coleman has given the business both spiritual and practical advice, and mediated contract negotiations with big companies such as Lendlease, after being introduced to ServeGate by the government agency Indigenous Business Australia.
“Leigh has helped us businesswise and mentally and spiritually,” says Browne. “We had problems and I’d say ‘I’ve had enough,’ and he would say, ‘No, no, no, mate, hang in there, I’ll see what I can do.’ He pushed so hard for us, and never asked for a cent. …I love ServeGate to death.”
Two other companies that ServeGate has helped are run by its Indigenous directors and shareholders – Hunter Valley man Victor Perry and West Australian Quinton Tucker.
Perry, with his brother Laurie, runs the Wonnarua National Aboriginal Corporation in Singleton, and has a history of working with the coalmining industry, conducting Aboriginal cultural heritage assessments. The company he runs, Yunaga, provides civil and earthmoving services to the mining industry. He has also been a director of a group called United First People’s Syndications, which has described itself as unlocking Indigenous employment and business opportunities by brokering development on Aboriginal land.
Perry said that he had known Coleman for years before he joined ServeGate and that Yunaga had benefited from business advice. “Aboriginal businesses need as much help as you can give them,” he said.
Meanwhile ServeGate’s largest single shareholder is Tucker, who with his family has been a prominent Indigenous businessman in the Western Australian goldfields for many years. He is the head of the Burnna Yurrul Aboriginal Corporation (BYAC), also a charity, which has brokered labour hire contracts with the mining industry using the profits to provide training and housing for Indigenous mine workers.
Tucker’s involvement with ServeGate follows a troubled period. In 2016 one of BYAC’s subsidiaries went into liquidation after a waste management contract with Glencore’s Mirrel Mirrel nickel mine was not renewed “by mutual agreement” according to Glencore.
In the same year, the Registrar of Indigenous Corporations issued a compliance notice over a number of issues, including inadequate financial records and payments made but not supported by documentation.
BYAC is still being monitored. Meanwhile, Coleman says that ServeGate is helping BYAC with “rebuilding their governance practices” as well as exploring new business opportunities. “We pick those that are most in need of help – not the easiest ones,” he said.
Tucker did not respond to questions before deadline.
Concerns about ‘black cladding’
There are in fact two companies called ServeGate. Only one of them is a charity.
ServeGate Pty Ltd was established in September 2015, with Coleman and two co-founders, Bob Nattey and Roehl Oringo, as directors. They each hold an equal number of shares.
This company, in turn, owned ServeGate Australia Pty Ltd, which was established two months later with the same directors. This is the company that is now a charity, and successfully pitching for government work.
In late 2018, ServeGate Australia changed its ownership structure to introduce Perry and Tucker as shareholders and directors. The change meant that the company qualified as an Indigenous business, and so could benefit under government Indigenous procurement policies.
The Indigenous Procurement Policy sets targets for business to go to Indigenous organisations, and mandates preferential treatment in some circumstances. Introduced in 2015, it has been a success, at least on paper. More than 1,000 Indigenous businesses have won over $1.084bn in commonwealth contracts since it started, compared to just 30 Indigenous businesses winning $6.2m in 2013. But the numbers obscure a problem. Supply Nation, the organisation that certifies businesses under the policy, has raised repeated concerns about what it calls “black cladding” – defined as non-Indigenous businesses “taking unfair advantage” of Indigenous organisations so as to benefit from the policy.
In 2016, the former chair of the Prime Minister’s Indigenous Advisory Council, Warren Mundine, said white-founded companies were “scrambling” to set up joint ventures with Indigenous people, but it was unclear that this was seeing many Indigenous people benefiting, either from profits or jobs.
ServeGate Australia, once it was majority Indigenous-owned, effectively had the front running for small contracts, and those in remote areas.
“Defence has no option,” said one industry insider. “Everything is given a tick. They are on the panel, they are Indigenous, so effectively they tick all the boxes and they get the work.”
Coleman denied this. He said that ServeGate gets its contracts because of the strength of its relationships with commonwealth government customers, built up over years by Oringo and Nattey in their previous jobs.
‘A very dear friend of mine’
Morrison’s maiden speech wasn’t the only time he praised Coleman.
In May 2015, Morrison, then the minister for social services, told a Financial Counselling Conference about how, as a small boy, he had met the founder of the charity Opportunity International, David Bussau.
“He has been a friend of my family and of me for many, many years.” This was the context, he said, in which he first met Coleman, “a very dear friend of mine”.
Coleman was one of Bussau’s co-founding directors of Opportunity International and had “probably forgotten more about microenterprise development than most of us would remember”.
“I remember as I would sit with Leigh and he would tell me the stories of lives changed,” he said. “It was tremendously empowering to hear these stories of him showing faith through the application and provision of a small loan to help someone realise their release from a life of welfare.”
Coleman had “taken the learnings of Opportunity International” and how microfinance had “worked and worked and worked” in developing countries and was now applying it to Indigenous communities in Australia through his work for a charity he had founded, Many Rivers.
Those who have worked with Coleman describe him as intensely well motivated as the result of his belief in the power of personal connections, and a conviction that his work is guided directly by God.
Eduardo Jimenez is the current president of the Philippines microfinance charity Kabalikat Para Sa Maunlad na Buhay (Partner for a Progressive Life) or KMBI, and has worked with the Philippines central bank, the equivalent of our reserve bank, as a microfinance consultant.
He met and worked with Coleman when he was with Opportunity International in the Philippines in the late 1990s.
Jimenez, like most Filipinos, is a strong Christian, but Coleman, he recalls, was of a different order. Coleman believed his work in microfinance was being directly inspired by God. Recalls Jimenez: “He gave me goosebumps.
“I remember we were walking one time in Makati (the business district of Manila) … he told me something like God had spoken to him and impressed upon him that I would be involved in changing the banking system in the Philippines … I am a follower of Jesus, but for the life of me I could not believe that God would do that.”
Microfinance was booming on a wave of optimism about its potential for transformation in the lives of the poor. Even the World Bank was talking it up.
But it soon became clear that the dream of tapping the entrepreneurial spirits of the poor with small loans was not a simple cure for structural disadvantage.
By 2015, with the international industry worth between $60m and $100m, with an estimated 200 million clients, a World Bank research study concluded that the benefits were modest, and were unlikely to reach the poorest of the poor.
None of this dimmed Coleman’s belief. From about 2001, while maintaining his personal connections with Opportunity International, he had moved on to work for the rapidly growing Hillsong church as CEO of its welfare arm, Hillsong Emerge.
It was in this role that he first hit the headlines in controversies over federal government grants to Hillsong, leapt upon by Labor politicians. There were allegations he had taken advantage of an Aboriginal community organisation to get a grant, and concerns over whether money given for promoting Aboriginal business had been partly used for other programs of the Hillsong church.
Coleman says today he has nothing to say about the old controversy concerning the Hillsong grants. He answered the claims and accusations at the time, including with a right of reply to the NSW parliament denying that he had taken advantage of the community organisation. “If any of the claims were brought to the authorities, they were certainly not pursued with me.”
One grant was withdrawn, and two others discontinued, with work to establish microfinance pilots taken back in house to the government agency, Indigenous Business Australia. But once again, Coleman didn’t give up.
By the time the Rudd Labor government came to power in 2007 – and Morrison was voted into parliament as the member for Cook – Coleman had left Hillsong Emerge and founded a new charity, Many Rivers Opportunity, with the express purpose of continuing the work that the federal government had dumped. It was to be his biggest success.
The persistent theme of reviews of microfinance in Australia is that disadvantaged clients need intense ongoing support, and that this makes the model too expensive.
Many Rivers claims to have cracked that nut. Its model, then as now, was to employ project officers to engage deeply with disadvantaged clients “walking alongside them” and assessing their suitability for business support.
The Westpac bank provided the loans at its normal commercial rate of interest, but with Many Rivers standing as an effective guarantor. Government grants and corporate philanthropy funded the operating costs.
Today Many Rivers claims to have helped 2,391 business owners since 2008. It has 38 microenterprise development managers over 32 regions of Australia. More recently, it has branched into Community Economic Development in regional and remote Aboriginal communities.
The organisation has its critics. A case study of Many Rivers published by the academics Kelly Gerard and Melissa Johnston concluded there was little evidence that its model worked in lifting people from poverty.
They argued that Many Rivers and other microfinance providers in developed countries benefited the banking, mining and retail sectors by boosting their corporate social responsibility credentials and, in the case of the banks, allowing them to access a difficult sector of the market effectively risk-free – because loans were usually guaranteed by the charities involved.
Microfinance more broadly, they said, was a “key strategy in a neoliberal development policy, part of a suite of measures in welfare that had built a “poverty industry” while papering over the structural causes of disadvantage”.
Federal government funding to Many Rivers, Coleman’s new venture, began under the Labor government, with a pilot program focusing on antidotes to the payday lenders who preyed on people who could not access conventional credit.
When Morrison became the minister for social services at the end of 2014, the program shifted to being entirely about “microenterprise development”.
Many Rivers got the bulk of the funding – a total of $6.74m over the life of the program, which has been extended and is now due to run until 2021.
By last year, the Australian government had funded Many Rivers to the tune of $10m since its beginnings, including grants from the Department of Prime Minister and Cabinet’s Indigenous Advancement strategy, the Department of Social Services Community Development and Employment services programs, and the Australian Small Business Advisory Services program. Mining and resource companies have been some of the organisation’s best friends, contributing about $20m.
Coleman says Many Rivers has proved that it represents value for money.
Morrison talked the microenterprise program up at the Philanthropy meets Parliament Summit on 9 September 2015. He spoke of it as an example of his approach to social welfare, in terms which have since become familiar.
“I will often say that the best form of welfare is a job, it is also a business – a business that that person can start and create and free them from a life where their choices will be constrained by the welfare system. They are empowered economically through their own initiative and enterprise.”
It was a sentiment with which Coleman would only agree, but by now Coleman had left Many Rivers and moved on – to found yet another organisation putting those ideals into action.
ServeGate Australia, the company to become an unconventional charity, was formed two months after Morrison’s speech.
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