Crispin Hull

There was a parting of law and morality in yesterday’s Super League judgment. Whereas in the judgment which it over-ruled, that of Justice James Burchett, morality was the glue that held it together.

Essentially, Murdoch’s News Ltd wanted a spectacle for his pay TV network. That specacle was a rugby league competition. If the existing competition did not come aboard on his terms he would just buy as many of the clubs and players as necessary to have the spectacle, leaving what was there in the past an empty shell.

Justice Burchett saw it as immoral; he described it in those terms. As a result he imposed court orders that would prevent Super League from getting off the ground for five years. His approach was: something is immoral; the law will not allow it; the court will make whatever orders necessary to prevent it.

Yesterday’s judges saw it differently. They did not see it as a single event … the attempt to take a spectacle or the whole AFL business by whatever means necessary. Rather they broke down what happened into a series of events. To each event they applied the appropriate law and the appropriate remedy, according to legal precedent. And the remedy was money.
Continue reading “1996_10_october_superwin”

The Prime Minister John Howard acknowledged yesterday that he had considered sacking Assistant Treasurer Jim Short over a potential conflict of interest involving his continued shareholding in the ANZ Bank. But he had accepted Senator Short’s explanation the issue was an oversight and that the minister was guilty of no wrongdoing.

Mr Howard came to the wrong conclusion. Indeed, he should never have been put into that position by Senator Short. Senator Short should have resigned as soon as the potential for the conflict had been pointed out.

Senator Short should go for several reasons.

The first is that both Mr Howard and Senator Short have agreed that Senator Short had breached the Government’s own code of ministerial conduct which Mr Howard had drafted and which he had circulated to ministers upon coming to government. If Senator Short is not to resign upon an acknowledged breach, of what value is the code? Is it advisory only? In fact, it is of no effect. The new state of affairs is that we have a code of conduct, but if in the opinion of the Prime Minister a minister who breaches it should stay, then the minister stays. The test, then, for ministerial conduct is not the code, but prime ministerial opinion. Any idea that Mr Howard was to bring new, objective, elevated standards to ministerial conduct has now gone out the window. The same old standard applies: whatever the prime minister thinks he can get away with goes.
Continue reading “1996_10_october_shorty”

I got my first inkling of tax avoidance at the tender age of 17 when I started at the ANU.

I was outraged to discover that I, one of six children of an Anglican Minister, got an annual Commonwealth scholarship living allowance of a paltry $600, yet a friend of mine, son of a Daimler-driving tobacco farmer, got the full allowance of $1000.

The allowance, of course, was means tested according to parental taxable income. Farmers in those days got huge tax deductions, bounties and other goodies from a conservative government full of farmers.

Not much changes.

Last week Amanda Vanstone was arguing the same thing can still happen with Austudy, even though she exaggerated by picking a hypothetical example and like Ronald Reagan confused it with reality.

And the tax advantages of the rich continue.
Continue reading “1996_10_october_shares tax for forum”

The Coalition wants to muddy the people’s constitutional convention on the republic with a lot of questions about vertical fiscal imbalance, states rights, longer parliamentary terms and the foreign affairs power.

Its federal council meeting at the weekend indicated as much, despite sensible opposition from Treasurer Peter Costello and Act Chief Minister Kate Carnell.

Perhaps it is a deliberate ploy to postpone the inevitable republic by having a composite question that will alienate enough people to say we don’t want a republic on those terms.

Even without the muddying of waters the people’s convention is silly enough (or outright Machiavellian). Prime Minister John Howard says he will only have a referendum on a republic if a consensus emerges from the convention. But that is impossible because it asks too much: not only whether there ought to be a republic, but what sort of republic. Given Mr Howard is going to appoint some, perhaps all, of the delegates, presumably from federal and state MPs, at least a third will be anti-republic. It is likely the remaining two-thirds are likely to split over the question of what sort of republic, notably whether the president should be elected directly by the people or indirectly by the federal parliament. So the convention might split into thirds and there is no consensus and Mr Howard may not have to hold a binding referendum, or certainly to delay it until after some indicative referendum and by then the Queen has opened the Olympics, the new century has arrived and the country can remain a comfortable and relaxed constitutional monarchy.
Continue reading “1996_10_october_republic op-ed”

The Government’s proposed changes to the Native Title Act are likely to run in to constitutional problems, presuming they pass the Senate.

According to Mr Howard, “”The Commonwealth Minister for Aboriginal and Torres Strait Islander Affairs will be able to ensure that a project of major economic benefit to Australia can proceed if it appears that that benefit will be lost if a decision is not made urgently.””

It appears the Minister will be given power to override native title.

The Government appears to misunderstand the nature of native title. It is a creature of the common-law. As such it is property and under the Constitution it cannot be taken away by the government except on just terms.
Continue reading “1996_10_october_native title”

How is it that the ACT Government can sell buildings and other assets to the private sector, lease them back and be better off? If the Government is better off, how can the private sector make a profit? And if the private sector can make a profit by owning and leasing the buildings, why is it not possible for the public sector to do the same thing? Alternatively, Why not just raise a loan, rather than flog off the silver?

On its face, selling and leasing back does not make sense. Either the ACT Government is just pulling a swifty by selling the family silver to pay the grocery bill or the private sector is being taken for a ride.

But there is another element to this story. It was referred to by the Under-Treasurer, Mick Lilley, during Estimates Committee hearings last week. The crucial element is the effect of federal income and company tax on the private-sector entities that buy the assets and lease them back.

A crude, hypothetical example, illustrates what happens. Assume an interest rate of 10 per cent. The ACT Government sells a $100 million building to XYZ Ltd and leases it back for $7 million. This gains it $10 million a year in interest. So the ACT Government is $3 million up. XYZ Ltd borrows the $100m at a cost of $10 a year. It receives rent of $7 million a year. But its $10 million interest bill is tax deductible, so it gets $4 million a year from the Federal Government. That leaves it with a profit of $1 million a year.
Continue reading “1996_10_october_lease back act”

The Minister for Health, Dr Wooldridge, has breached a very important principle in barring overseas-trained doctors from obtaining Medicare provider numbers for 10 years after their arrival. In any event the proposal might come unstuck constitutionally.

The general principle of Australia’s immigration program has been that once a person is granted residency they are equal before the law with everyone else except for the right to vote and the threat of deportation after being convicted of a crime, and that once a person is a citizen they are equal in all respects.

It is inevitable that most overseas-trained doctors who come to Australia will become permanent residents within a short time and probably citizens after three or four years. At that point they will be banned from obtaining a Medicare provider number, purely on account of their overseas birth, and not on account of some medical or other qualification that applies to all applicants. It is virtually impossible for a doctor to engage in private medical practice in Australia without a Medicare provider number that enables people to claim Medicare rebates for that doctor’s services.
Continue reading “1996_10_october_leader31oct medicare providers”

The whole process of efficiency reform embarked upon by the Council of Australian Governments is under threat. The threat will come if the federal government attempts to shift responsibility for large amounts of health and aged care delivery to the states and territories without also shifting the wherewithal to do it in the form of an income stream. It will be no good if the federal government pushes out health and care to the states and keeps all the savings for itself. The costs of health and aged care are likely to rise faster than most areas of government spending. Yet the federal government proposes to shift much of the responsibility for them in this term of government. At the same time Prime Minister John Howard has ruled out any major tax reform this term.

The likely response from the states and territories will be to refuse to accept the responsibility despite the obvious attraction individual ministers might see in gaining more power or more efficiency in being able to allocate funds as they see fit rather than having a group of federal bureaucrats monitoring everything they do. Already the COAG process has been slowed with transfers of housing and child care responsibility being postponed.

There is much to be gained from the COAG process. There is a lot of duplication and inefficiency in health and welfare delivery. A lot of federal money is earmarked at a quite detailed level, which ties the hands of service deliverers on the ground. The federal government has promised to “”broadband” a lot of this money to give more flexibility to care deliverers, so they can take money out of one area and put it in a more urgent area, and back again later.
Continue reading “1996_10_october_leader30oct coag reforms”

The Senate Committee for the Scrutiny of Bills and its Committee on Regulations and Ordinances have correctly pointed out the dangers of ministerial councils overriding the function of Parliament. There are about 30 ministerial councils made up of state, territory and federal (and sometimes New Zealand) ministers responsible for particular areas. They frequently make very detailed agreements about uniform laws on their subject matters. Often they involve political compromises and are difficult to achieve. Moreover they provide convenience for businesses and residents who only to have to know and abide by one set of laws.

But whatever the merits of uniformity, the matters have to be legislated, which means being passed by state, territory and federal parliaments. Legislatures often take different views on things to the executive arms of government, even when the executive party has a majority control of parliament.

Ministers often believe they can be trusted with wide regulation-making power and that the bureaucracy can be relied upon to administer laws fairly without the need for safeguards built into the legislation. The consequence is that when agreements go from ministerial councils to parliaments, many MPs are placed in a dilemma: should they allow the desire for uniformity, which is difficult to achieve and has benefits of convenience and business efficiency, to override legislative standards on fairness and potential abuse of ministerial power? The ministers will need to engage their legislatures more to achieve both the merits of uniformity and reasonable restraint on abuse of power.

Many domestic consumers of water will be screaming at Actew’s projections of water charges to 2000. Actew has adopted user-pays. This means that cross-subsidies from business to domestic users will end and all users will have to pay for what they use.

At first blush it is a mean policy. There will be no social cross-subsidisation.

For a long time governments have controlled delivery of utility services like water and electricity. They have often pursued their social policies through the pricing of utilities. It was acceptable in the popular imagination. Aged pensioners, it was thought, should not have to pay the same price as everyone else for electricity to heat their houses. Widows and single mums should not have to pay the same price for water. The trouble with this policy, though, was that if water and electricity are cheap, the users do not consume them carefully. The financial incentive to conserve water and power is much less. The result is we all pay far more in the long run as new dams and power stations have to be constructed for what is an artificially inflated demand.
Continue reading “1996_10_october_leader28oct water”