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Tag Archives: Kerry Packer

Heavy lifting . . . for some

“The rich regard wealth as a personal attribute. So do the poor. Everyone is tacitly convinced of it. Only logic makes some difficulties by asserting that the possession of money may perhaps confer certain qualities, but can never itself be a human quality. Closer inspection gives this the lie. Every human nose instantly and unfailingly smells the delicate breath of independence that goes with the habit of commanding, the habit of everywhere choosing the best for oneself, the whiff of slight misanthropy and the unceasing consciousness of responsibility that goes with power, the scent of a large and secure income.” — Excerpt from rich people’s code of living, The Man Without Qualities, Robert Musil

When Kerry Packer appeared before the Print Media Inquiry in 1991 he famously said

“Now of course I am minimizing my tax and if anybody in this country doesn’t minimize their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra. I pay whatever tax I am required to pay under the law, not a penny more, not a penny less”

His daughter Gretel got married earlier in the year and Kerry spent $3 million on her wedding. Apparently, that same year he paid no income tax.

In 2012, mining magnate Nathan Tinkler of Whitehaven Coal put his plans for a $13 million beachfront pad in Newcastle on hold and moved his family to Singapore. In an amazing coincidence, Gina Rinehart has reportedly spent $S57 million ($A43.8 million) on two units, off the plan, in the same Seven Palms Sentosa Cove condominium project. Eduardo Saverin, who co-founded Facebook at age 21, also lives in Singapore.

It might be because Singapore is a nice place that so many mega-wealthy people are flocking there – or it could have something to do with the fact that capital gains are not taxed. Individuals are only taxed on income earned directly in Singapore, and for the super wealthy, there are no inheritance taxes. Personal tax rates in Singapore are among the lowest in the world, with a cap of 20 per cent, compared to the top tax rate of 45 per cent in Australia. It’s got the banking secrecy laws, it’s becoming a financial centre, new casinos and now a lot of the big banks are operating out of Singapore purely because it’s becoming a very exclusive place to live

Gina Rinehart’s personal wealth is more than two times greater than the gross domestic product (GDP) of Cambodia, population 14.5 million. She has about 41 times more than the GDP of East Timor, population 1.3 million. She has more than the GDPs of Haiti and Bolivia put together (combined population 20 million).

She could buy up the economies of the world’s 10 poorest nations, and still have about $22 billion left over.

One in seven people — or 1 billion people around the world — do not have enough to eat. Rinehart could feed them all for a year.

In 2011, Rinehart made $1.5 billion more than was spent on the entire NSW health system ($17.3 billion). She made 18 times more than was allocated to the federal government’s climate change department. She made 70 times what the federal government will spend to improve education and training for young Aboriginal Australians.

In 2012 BRW Magazine said that Rinehart’s rise in wealth “is unparalleled”. It said she might soon become the world’s richest person: “A $100 billion fortune is not out of the question for Rinehart if the resources boom continues unabated.”

Despite her huge fortune, Rinehart is convinced she pays too much tax. Her tax lobby group ANDEV (Australians for Northern Development and Economic Vision) campaigns to cut taxes on mining industry profits and lower payroll and income tax.

In February 2013, the Coalition released its policy/discussion paper ‘2030 Vision for Developing Northern Australia’. The catalyst for the policy was a 2010 open letter signed by the executives of over 50 resources companies that called for the establishment of a special economic zone with fewer regulations and taxes to develop Australia’s north, and the capacity to import cheap labour.

“Various industries in Australia already make use of overseas countries’ labour without restriction – for example, sending work overseas to India and the Philippines and elsewhere in Asia where labour costs are lower. The group argues mining companies should be allowed to hire short term workers from overseas for the construction periods only, for say up to two years and nine months, thereby increasing long term job prospects in Australia, rather than becoming uncompetitive and these jobs heading overseas to countries like Guinea and other countries in Africa.”

It was quickly followed by the establishment of ANDEV, a lobby group chaired by Gina Rinehart to realise this vision. The Institute of Public Affairs was soon recruited to give the project a veneer of free market respectability.

ANDEV’s plan was not just a slight drop in taxes. It included vast sums of taxpayer investment in infrastructure, accompanied by the abolition or dramatic reduction of taxation levied. The Coalition policy has wording pulled straight from the ANDEV site in a series of op-eds and speeches. The 2012 National Party Conference keynote address, given by one of Rinehart’s employees, was dedicated to promoting this vision, going so far as to include ANDEV promotional material in all delegate’s packs and exhorting the audience to meet with him to discuss ANDEV privately.

The central thesis behind the ANDEV plan is that northern Australia is ‘underdeveloped’, ‘underutilised’ and ‘underpopulated’. The Coalition’s policy adopts these claims uncritically, spicing them up with promises of taming Australia’s ‘last frontier’. ANDEV also bandies around some odder reasons; the “multitudes of snakes” and “excessive heat” that afflicts residents of the North apparently entitles them to generous tax offsets. The latest Coalition incarnation of the policy leaves it to a future white paper to review how to achieve a preferential taxation regime without ending up in the High Court as it is probably unconstitutional.

Going on the word of vested interests, especially when the result is worth a huge influx of government subsidies, does not make for sound economic policy. Herein lies the problem at the heart of the Vision for Developing Northern Australia: it’s been driven from the office of a vested interest into a Liberal party that can no longer distinguish between crony capitalism and free markets. It undermines federalism by subsiding infrastructure spending and tax cuts without imposing the fiscal responsibility that a state faces in having to balance the books on this equation.

In 2010, the mining industry spent over $22 million in six weeks on its campaign against Kevin Rudd’s plan for a resource super profit tax. This led to a slump in Rudd’s popularity contributing to the Gillard takeover and the subsequent compromise deal on the MRRT costing the nation billions in revenue.

In March this year, the ATO announced an amnesty for off-shore tax evaders. Under the disclosure initiative, those who come forward will “generally” only be assessed for the last four years, even if they held the assets offshore for longer than that, and be liable for a maximum shortfall penalty of just 10% of their debt rather than 90%, the ATO said. Those coming forward also will escape investigation by the tax authority, and will avoid criminal prosecution.

While these people are busy investing their money and lobbying the government so they make no contribution to the country that has afforded them such wealth, average Australians are being hit with a “sick” tax and a deficit tax and told that we must work till 70, that pensions will decline in real terms, and the minimum wage will be slashed. We will continue to hand over billions in fossil fuel subsidies, spend billions on infrastructure for the miners, and provide guarantees for banks while we listen in amazement to the profit announcements. We will continue to provide tax concession schemes like negative gearing, investing in superannuation, and private health insurance rebates.

As Adam Bandt said

Around the world, there are some people who are incredibly wealthy who see it as part of their social duty to lift people out of poverty and to give a bit back to our society. Gina Rinehart certainly doesn’t fall into that category.

But there’s a broader issue here than just about the individual – it’s about in Australia, what do we consider to be a fair share for billionaires who make their money out of the minerals that we all own digging them up and selling them off overseas, which we only get to do once, what’s a fair share for those people to pay?

Gina Rinehart wrote and self-published a book called “Northern Australia and then some: Changes we need to make our country rich.” I will close with a quote from a review done by Cameron Whitehead at Crikey.

“What she has produced is a weirdly amateur book which is everywhere inscribed with the signature of someone accustomed to command but it is also — sometimes with a wildcard, unexpected poignancy — the work of someone who is blind to how she is being perceived. This is a book that reveals a woman for whom love, work and money are indistinguishable, a woman who has so much, and yet so little.”

 

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This is so wrong

Overnight, elements of the mainstream media (MSM) displayed the gutter journalism and sensationalist crap that Senator Conroy admirably wants to tackle head on in this country. He rattled a few cages and the MSM are squealing like stuck pigs. They are behaving like pigs too. The front page of The Daily Telegraph (above) deserves nothing better than to line the kitty litter tray (as should the whole paper, if you’re brave enough to buy it). I cannot find enough words to describe my utter disgust at this piece of filth. It is so wrong.

Senator Conroy, to his credit, shrugged it off. I don’t think too many other decent people will.

He has certainly hit a raw nerve and the more restrained responses have that guilty look about them. Take these sentences in today’s editorial in The Australian:

The minister has never hidden his dissatisfaction with News Limited, publisher of The Australian, or his warm relationship with other media proprietors. Indeed, free-to-air television networks are the winners.

The removal of the “75 per cent rule” will allow the Nine Network to buy its affiliate, Southern Cross, thus reducing diversity. At the same time, regulations governing free-to-air television remain the same.

To me, this sounds like The Australian has voluntarily put its hand up as the nasty guy while stressing they need to be the major player in Australian print media. To continue on unabated.

Even the Sydney Morning Herald, on their web site were playing the same fiddle:

The chief executives of Australia’s biggest print and online news media, including Fairfax Media, publisher of this website, have come out against the reforms announced by Mr Conroy on Tuesday, saying they were unclear and would introduce uncertainty into the media landscape.

Yes, let’s keep the certainty. Let’s keep having a media that publishes front pages that compare an elected politician to mass murderers. Pathetic.

But now to the crux of my post. Up until 2007 the media barons controlled the Government. Losing this control is more the issue here. Let’s take a look at a few significant moments from the Howard years, thanks to the Centre for Policy Development:

Pre-1996 election

•Opposition Leader John Howard is rumoured to have reached an understanding with Kerry Packer to remove the cross-media ownership restrictions that mean he is prevented from buying Fairfax. Packer appears on his Nine Network to endorse John Howard for Prime Minister. The Coalition promises a full public review of cross-media rules.

1996

October

•Communications Minister Richard Alston scraps the promised review and instead calls for private submissions to be sent directly to the Department of Communications, Information Technology and the Arts (DCITA) for analysis by Alston’s advisors.

1997

April

•Howard says he believes the cross-media rules should be scrapped, but favours retaining limits on foreign ownership.

The Coalition backbench says it is worried about media ownership and wants a role in formulating policy.

Howard meets with Murdoch and Packer. Network Seven owner Kerry Stokes accuses Howard of doing a deal with Packer over Fairfax.

May

•Howard says he won’t consider relaxing foreign ownership limits, claiming that “70-80 per cent of the newspapers of this country are owned by foreign interests”.

•Liberal MP Gary Hardgraves, deputy chair of the Coalition backbench communications committee, writes to Howard: “I have been contacted by several colleagues requesting no public announcement of any changes in cross-media ownership provisions be made until the committee has been afforded a full briefing with opportunity to comment. As a committee we are very concerned matters will be decided before we are consulted.” (The Age, 6/5/97)

•James Packer appears on the Nine Network and announces that he wants Fairfax for Christmas.

The Coalition backbench tells Howard it will not back change without partial relaxation of foreign ownership limits to keep the industry competitive. Hardgrave explains that “There was no one here who could take on Packer, so it had to be a foreigner. We went for diversity over xenophobia.”

•Howard again refuses to consider abolishing limits on foreign media ownership but, under pressure from his backbench, offers Murdoch a lift in foreign ownership limits from 15 percent to 25 percent.

•Cabinet considers Richard Alston’s plan and advises him to consult the backbench.

June

•James Packer lobbies backbenchers for relaxation of cross-media ownership restrictions.

•ABC Television hosts a debate on media policy. No one from the Murdoch or Packer companies participates.

August

•Murdoch says no to Howard’s offer, and threatens to fight any attempt to give Fairfax to Packer without the abolition of foreign ownership restrictions at the same time.

•Howard dumps the plan.

September

•Howard tells Cabinet he’s dropped the issue after the backbench committee announces “MPs would not accept any policy that allowed the Packers or Rupert Murdoch to own more of the Australian media”.

•Alston tells Parliament that Cabinet bailed out “because they well understood that the Australian public was interested in the real issues”.

2001

Pre-election, 2001

•The Government announces it will review media ownership laws after the election.

•Howard meets Rupert Murdoch in the United States just before the September 11 attacks. Insiders assume a deal was done whereby the Murdoch press would support Howard in the election campaign, and in return Howard would alter legislation to allow Murdoch to expand his media interests in Australia by buying a television network.

2002

January

•Richard Alston meets Rupert Murdoch in New York to discuss possible changes to media ownership laws.

•Alston dumps his promise of a review, and instead holds private talks with media players, obtaining majority agreement for his plan.

March

•Cabinet approves the Alston-Howard plan to abolish cross-media and foreign ownership restrictions on the media, which would allow Packer to buy Fairfax and Murdoch to buy a television network.

March 19

•Alston presents proposed legislation to the Coalition party-room meeting as a done deal.

•At least ten backbenchers protest, saying Alston hasn’t explained what the legislation means and demanding more time to consider it. Critics include National Party MPs Paul Neville, De-Anne Kelly and Ron Boswell, Victorian Liberal MPs Bruce Billson, Petro Georgiou and Sophie Panopoulos and NSW Liberals Bruce Baird, Bronwyn Bishop and Marise Payne.

•The Sydney Morning Herald reports: “They are concerned at the impact such a liberal regime would have on media diversity in the bush and the centralising of ownership that would result from a relaxation of the cross-media laws. A few backbenchers fear that in the absence of a strong cross-media regime foreign investors could buy up as many local media outlets as they liked.”

•Major media players arrive in Canberra to begin lobbying politicians to support the Alston plan. Critics claim that this is proof that they all knew the detail of the plan before the Coalition’s own backbench.

March 20

•A hastily formed new communications backbench committee agrees to the original plans after meeting with Alston. No committee members will reveal the reasons behind their about-face.

March 21

•The coalition party room approves the Alston-Howard plan and Alston introduces it into the House of Representatives.

June

•A Senate Committee inquiry rejects the Alston plan, but Western Australian Liberal Senator Alan Eggleston, Tasmanian Liberal Senator Paul Calvert and Victorian Liberal Senator Tsebin Tchen back it with two provisos:

1. Any company could own only two of the three media – TV, radio and newspapers – in any one region;

2. A media group should be required to disclose its ownership of another media group when it is reporting on the latter.

(http://www.aph.gov.au/Senate/committee/ecita_ctte/media_ownership/report/report.pdf)

September

•Alston agrees to these changes and starts negotiating with the four independent / minor party Senators whose support he needs to pass the bill: South Australian ex-Democrat Meg Lees, Tasmanian ex-Labor Senator Shayne Murphy, Queensland One Nation Senator Len Harris and Tasmanian independent Senator Brian Harradine.

2003

June 22

•Alston announces a new offer to the independents, including cash to extend the reach of ABC news radio to the regions.

June 25

•The Senate passes Alston’s bill with Brian Harradine’s amendment, which bans a company owning a newspaper and a television station in the same capital city market.

June 26

•The House of Representatives rejects the Senate compromise and re-passes Alston’s legislation.

June 27

•The House of Representatives lays the bill aside.

•Alston announces he’ll demand the Senate pass his original legislation in October, and ensures that all the preconditions are met to make the bill part of a double dissolution election trigger.

July

•Alston starts negotiations with the Democrats to pass the legislation.

November 5

•The Bill is reintroduced into the House of Representatives.

December 1

•The house passes the Bill, in the same form as that introduced on 15 October 2002, with the addition of amendments passed by the Senate and agreed to by the House.

December 2

•The Bill is reintroduced into the Senate; the second reading debate adjourned.

2004

•The Bill lapses following the calling of the 2004 Federal election.

The Howard Government includes a commitment to “reform” media ownership laws in its election platform.

2005

•The Government commences consultations with stakeholders on possible approaches to media ownership reform.

2006

14 March 2006

•After months of unexplained delays, Communications Minister Senator Helen Coonan releases a discussion paper on media ”reform”, entitled Meeting the digital challenge: reforming Australia’s media in the digital age. The paper is open for public discussion and submissions for one month, until the 18th of April.

I don’t know about you, but I think some of that is rather damning. Howard consulting Murdoch on proposed media changes. Obviously Senator Conroy was unaware that Rupert had to be consulted first. In 1997 George Megalogenis caught a whiff of Howard’s backroom deals. George wrote:

Howard himself fed this perception by telling colleagues he thought the Fairfax papers lacked direction. Howard believed the Sydney Morning Herald, for example, was not fulfilling its potential of becoming a quality” small-c conservative” broadsheet like The Times in London.

Early on in the process, Howard and Communications Minister Richard Alston decided the way to counter the inevitable claims of bias towards Packer was to give Rupert Murdoch’s News Limited, which publishes The Weekend Australian, a share of the media spoils.

The economics, as well as the politics, of the issue demanded that the cross-media rules preventing someone could not be reformed in isolation.

The foreign ownership rules, which restricted News from expanding further in Australia, also had to be looked at. But unlike Keating, Howard could not strike a balance that placated both Packer and Murdoch.

Every model that Howard and Alston came up with gave Packer an easier run at taking over Fairfax than it gave Murdoch at controlling Seven. Insiders now agree that Howard effectively killed his own reform drive on April 30 when he went on Melbourne radio station 3AW to talk up the Packer cause. The Prime Minister said then there were three choices on media policy – do nothing; open up the media to all comers; or reform the cross media rules while retaining the existing controls on foreigners. (Interestingly, Howard did not mention option four which he had discussed with Murdoch – relaxing both cross-media and foreign ownership controls).

It certainly continues to be damning, not just for the Howard Government (and I suspect the current Opposition) but also for Murdoch. That’s Conroy’s problem: he won’t hop into bed with Murdoch so he’s rallied his troops. This too, is so wrong. Media Content is Influenced by Ownership, and that suited both the Howard and Murdoch to a tee:

Media companies are not solely a means to earn income. They are frequently also a vehicle for furthering the interests of their owners. Expression of an owner’s political interests is rarely as overt as it was in 1995 when Kerry Packer appeared on his own Nine Network and declared that John Howard, then leader of the Liberal National Party Opposition, would make a good Prime Minister. It usually occurs in subtle ways, through the
appointment of senior management and, in turn, the selection of stories and the way in which information is presented to the public.
The public is frequently unaware of information that should but does not come to its attention. For example, back when Nine promoted itself as the major television news network and was owned by the Packer family, which also had strong financial interests in casinos, it was highly unlikely that Nine would have screened weighty content on serious social problems that have resulted from the proliferation and promotion of legal gambling.
The editorial position of News Corporation’s newspapers around the world in support of the 2003 US led invasion of Iraq is one example of homogeneity of perspective on a crucial matter of public interest.Undertakings given by media companies bidding for AFL rights to support and promote the sport rather than ‘bag’ or ‘demonise’ it provide another one.
In his recently published book, ‘Rupert Murdoch: An investigation of political power’, David McKnight (Associate Professor and a Senior Research Fellow at the Journalism and Media Research Centre at the University of NSW) has described Rupert Murdoch’s use of his media empire to further his political agenda over decades.
There has been widespread speculation by media and business analysts and commentators that shareholdings which Gina Rinehart (mining magnate and Australia’s richest person) has recently acquired in the Ten Network last year, and recently in Fairfax are in pursuit of influence for her mining interests, not investment potential.

Murdoch has a Howard ‘mimi-me’ in Abbott, whereas Conroy won’t bend over.

That is so good.

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