Peter Costello has suddenly found himself embroiled in the biggest probity scandal of his career. That’s the only conclusion you can draw from the sheer scale of the media commentary flowing from yesterday’s five-page special investigation king hit by The AFR on tax dodger Rob Gerard.
The reaction started relatively slowly when AM ran the story sixth yesterday and later The World Today dropped off it completely. But Crikey led strongly with the story at 1.33pm yesterday and then the Opposition strategically devoted its entire Question Time attack to the issue from 2pm. John Howard received three of Labor’s 10 questions and tried laughing at Labor’s strategy, but got the issue dead wrong when he declared:
You are having a bad day. You gave yesterday away. Now what are we – at three o’clock and not a question on IR! I don’t understand it. The relevant point about the dispute between Mr Gerard and the Australian Taxation Office is that, by hand of the letter from the commissioner, all the outstanding matters were resolved. So what is the fuss all about?
Firstly, a glimpse at the huge coverage in today’s papers shows that this is a major problem for the government. Secondly, the PM has actually misled the house because “all the outstanding matters” were not resolved. There were never any outstanding matters about Mr Gerard’s “personal affairs,” which is what the Commissioner’s letter to Costello referred to.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Despite the PM’s prediction that Labor was “having a bad day,” the story made most of the television news bulletins last night and was elevated to lead story on PM, The 7.30 Report and Latelinelast night,which also interviewed Wayne Swan.
Nor is this simply an anti-Government ABC conspiracy, because the Murdoch press has grabbed the story with great gusto. The Australian was particularly savage with no less than nine stories, three of them on page one, including this broad attack on Costello’s failure record by George Megalogenis.
While Alan Wood’s commentary was measured, perhaps reflecting a drip he sometimes gets from the RBA, even he assessed Gerard to be in breach of the central bank’s code of conduct that directors have “an unparalleled reputation for integrity and propriety in all respects.”
News Ltd stablemate Terry McCrann was typically more direct when he said Gerard should do the decent thing and resign now because he certainly won’t be reappointed in two years after his “aggressive” tax planning was revealed to the world. “You end up making a $150 million settlement with the Tax Office, I think your behaviour qualifies as aggressive,” wrote McCrann.
The AFR sensibly had some artillery left in reserve for day two of its special investigation and that was Gerard’s plea to then Attorney General Daryl Williams in 2002 to call the ATO’s attack dogs off. Williams told the paper he was “not sure” if he was aware of the dispute at the time and Costello told AM this morning that whilst he was not aware of it, taxpayers have a right to complain to their elected representatives. Read the Costello transcript here.
All up, the issue has generated remarkable heat given the Van Nguyen, terror and IR debates which are still running strongly. Clearly, there is something really smelly about rewarding a tax dodging Liberal Party donor with the most prestigious directorship that a government can dish out and then declaring there is no problem whatsoever.