Inquiry into the funding arrangements for tax reform advertising
Background to the inquiry
1.1
On 16 June 2010, the Senate referred to the Finance and Public
Administration References Committee (the committee) for inquiry and report by
30 June 2010:
(a) whether the Rudd
Government's tax reform advertising campaign is an outrageous abuse of
taxpayers' dollars;
(b) whether the Rudd Government
should be allowed to spend millions of dollars in advertising a new tax that
has not been approved by Parliament;
(c) whether the Special Minister
of State and Cabinet Secretary (Senator Ludwig) acted appropriately in
exempting the tax reform advertising campaign from the Guidelines on
Information and Advertising Campaigns by Australian Government Departments and
Agencies; and
(d) what further provisions are
necessary to strengthen the controls on government advertising to prevent
taxpayers' dollars being used for electioneering purposes in the future.
Conduct of the inquiry
1.2
The inquiry was advertised through the Internet and the committee
invited submission from interested organisations and individuals. No
submissions were received.
Recent inquiries and
reports on government advertising
1.3
The tax reform advertising campaign and the exemption granted to it by
the Cabinet Secretary and Special Minister of State from the Guidelines on
Information and Advertising Campaigns by Australian Government Departments and
Agencies (the guidelines) have been considered in a number of parliamentary
inquiries and reports including:
- Finance and Public Administration Legislation Budget Estimates
2010–11 hearings of 25 and 27 May 2010[1]
and recall of the Department of Finance and Deregulation on 17 May 2010 before
the committee to consider matters relating to government advertising;[2]
- Finance and Public Administration Legislation Committee, Budget
estimates 2010–11 report of June 2010;[3]
- Finance and Public Administration Legislation Committee, Preventing
the Misuse of Government Advertising Bill 2010 report of June 2010;[4]
and
- the ongoing Joint Committee of Public Accounts and Audit inquiry
into the role of the Auditor-General in scrutinising government advertising
campaigns.[5]
1.4
This matter was also the subject of extensive debate in the Senate
during the sitting fortnight following the Estimates hearings.
Tax reform advertising
campaign exemption timeline of events
1.5
On 10 May 2010, the Treasurer wrote to the Cabinet Secretary to inform
him that the Strategic Priorities and Budget Committee (SPBC) had allocated
$38.5 million to Treasury for an advertising campaign to 'ensure community
awareness and understanding of the Government's planned tax reform package'.[6]
The Treasurer requested the Cabinet Secretary to exempt this advertising
campaign from the guidelines.[7]
1.6
On 24 May 2010, Senator the Hon Joe Ludwig, Cabinet Secretary and
Special Minister of State, responded to the Treasurer and granted the exemption
on basis of 'urgency and compelling grounds'. In the correspondence, the
Cabinet Secretary wrote:
Given that co-ordinated misinformation about the changes is
being promulgated in paid advertising as I write, I accept the need for
extremely urgent action to ensure Australians receive accurate advice about the
nature and effect of the changes. However, as the changes also affect the value
of capital assets and impact on financial markets, I am also satisfied that a
compelling reason for an exemption exists, particularly given the nature and
extent of misinformation against a backdrop of continuing market volatility.[8]
1.7
On 25 May, during the second day of the Finance and Public
Administration Legislation Committee's (legislation committee) Budget estimates
hearing, the committee considered matters relating to government advertising in
questions to the Cabinet Secretary and officers of the Department of the Prime
Minister and Cabinet and the Australian National Audit Office. However, the
exemption from the guidelines in relation to the tax reform advertising
campaign was not raised during the hearing.[9]
1.8
On 27 May, the legislation committee continuing its examination of
Budget estimates examined officers of the Department of Finance and
Deregulation (DoFD) specifically on Outcome 2, Program 2.1 relating to
government advertising. The Cabinet Secretary was also in attendance. However,
the exemption from the guidelines in relation to the tax reform advertising
campaign was not raised during the hearing.[10]
1.9
The legislation committee recommenced on 17 June to further consider
DoFD, Outcome 2, Program 2.1 in relation to government advertising. DoFD
officials stated that they were 'advised' on 27 May that the Cabinet Secretary
had written to the Treasurer granting an exemption in relation to the tax
reform.[11]
1.10
On 28 May, the Cabinet Secretary presented out of session to the
President (subsequently tabled in the Senate), a statement and related
documents to inform Parliament of the exemption. He then put out a press
release.[12]
According to DoFD officials, the Independent Communications Commission (ICC)
received the Cabinet Secretary's correspondence to the Treasurer granting the
exemption the same day.[13]
1.11
At the JCPAA hearing on 17 June, the ICC Chair, Dr Hawke agreed that he
had received advice regarding the exemption on 24 May.[14]
However, later he indicated that he would need to 'check' the timeline in
relation to both the oral and written notification.[15]
1.12
At the legislation committee hearing later that day, DoFD First
Assistant Secretary Mr John Grant stated:
In my
discussions with Dr Hawke after his appearance this morning he had believed
that he had said he had received a letter dated 24 May. He agreed that he
received a copy of the signed letter on 28 May, and I think he had mentioned
that he had been advised by a departmental official day or two before. That was
me giving him a call on the Thursday advising that we had received the letter
of exemption.[16]
1.13
A reply from the Treasurer to the Cabinet Secretary on 28 May 2010
assured the Cabinet Secretary that Treasury has and will meet the conditions of
the exemption. The campaign was launched on 29 May 2010 with 7 August 2010 the
concluding date.[17]
The announcement to cancel
the advertising campaign
1.14
In a press conference on 24 June 2010, incoming Prime Minister, the Hon
Julia Gillard MP, stated that the Government would suspend the tax reform
advertising campaign.[18]
Committee view
1.15
As indicated above, the committee received no submissions for this
inquiry. Furthermore, the issues have been substantially covered in other fora
and activities of this committee.
1.16
The committee has nothing further to report to the Senate regarding this
inquiry.
Senator Scott Ryan
Chair
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