Opposition Leader Malcolm Turnbull’s favourite scorched-earth economics firm Concept Economics has entered administration, Crikey can reveal.
Concept, helmed by long-time Telstra associate Henry Ergas, went belly up on 3 September, according to an ASIC filing, with Sydney-based insolvency specialists Jones Partners overseeing the empty shell.
Insiders say the firm will be wound up within the month and that staff have been on half-pay “for some time”.
Queries over the firm’s future were referred to Jones Partners, who were unable to comment before deadline. Emails to Ergas and Fisher were ignored.
Canberra sources contacted this morning expressed shock over Concept’s demise. The firm’s competitors were also bemused, saying that consultancy work had remained strong, despite the global financial crisis.
“It’s certainly a massive surprise, demand for work in Canberra has been pretty buoyant”, one competitor, who did not want to be named, told Crikey.
However, sources say the firm has been cut out of the Canberra loop ever since its “Ergas Review”, commissioned by Turnbull last year as a right-wing response to the Henry Review, was quietly shelved. It contained various controversial proposals, including a transition to a flat tax by 2015.
Ergas has also been a vociferous opponent of the Rudd Government’s stimulus package, despite a majority of rival economists backing state intervention in the economy to prop up sluggish demand.
Fisher, who was poached from ABARE in the post-Howard era, famously spruiked a “wait and see” approach to climate change to directly counter the Rudd Government’s Garnaut Review. The firm has come under constant fire from green groups ever since.
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Concept maintained strong links to the conservative side of politics. Recently, Senator Mathias Cormann commissioned a report from Fisher on ETS modelling in an attempt to counter official Treasury advice. It is unknown how much Concept was paid for the six-week appointment.
And a recent report penned by Ergas was attacked by Telstra’s rivals in the competitive carriers coalition, after it claimed the $70 billion network would have little benefit for consumers. The report was quoted approvingly on the Liberal website.
Until as late as last week, The Australian newspaper was still eagerly publishing Ergas’ output, reprinting an extensive speech given to the Committee for Economic Development of Australia.
Ergas worked as a Telstra consultant for many years and was a vociferous opponent of government regulation, aligning him with the pugnacious Phil Burgess and banished CEO Sol Trujillo. Both figures departed Telstra after the aggressive approach backfired and the firm’s share price tumbled.
According to its website, Concept “specialises in the application of economic analysis to complex issues of public policy, through the development of economic arguments, models and evidence.”
A recent course run by Concept to discuss the policy implications of the National Broadband Network has been “cancelled until further notice”, and other parts of its website were also down this morning, although luckily it can still be accessed through Google’s cache.