When is a subsidy not a subsidy?

Phil Morgans writes: Re. “Why News Corp got almost $1 billion of your money” (yesterday). Oh dear! When is a subsidy not a subsidy? Presumably when the recipient of the subsidy pays tax, which then must make the subsidy some kind of refund on a down payment?

There’s some interesting reading in the Productivity Commission’s annual Trade and Assistance Review, the latest of which is for the 2011-12 financial year. It even includes an appendix full of handy little tables that set out details of total government assistance to industries like mining. In 2011-12, the Australian mining industry was the grateful recipient of $400.9 million in Commonwealth budget outlays and a further $299.5 in Commonwealth tax expenditures, for a grand total of Commonwealth assistance of $700.4 million. This is more than double the assistance enjoyed by the industry in 2006-07.

But when it comes to sheer chutzpah, it never fails to raise a wry smile when those dry, rugged individuals of the financial market variety come on strong with their denunciations of government assistance to manufacturing, or just about anyone, including single mums, for that matter. Maurice Newman, quite possibly Australia’s pre-eminent creature of the finance business comes to mind. So just for the record, in 2011-12 the financial and insurance services sector received a very generous $845.1 million in tax concessions and a further $69.7 million in direct budget outlays for a grand total of $914.8 million of very gratefully received assistance. Who says governments don’t spread the love?

Where there’s smoke …

Lachlan Barnes writes: Re. “Cater smokes it on Furnival” (yesterday). I was interested to read that Nick Cater linked tobacco with removing the healthy website — it might be the only thing he got right, because I also see a strong link to tobacco. The promotion of bad food as health food, deliberately burying information to stop customers learning the implications and blocking policies that will help is similar to Big Tobacco’s years of bastardry. Tobacco was also prepared to cross the bridge from blissful ignorance into wilful deception for profit. I do actually rate the current deception as worse because anyone sucking on the unhealthy food industry teat have seen the example of tobacco and chosen the same evil route. I am a fat bastard, but let me choose to take my health in my own hands; there are enough of us round ones around to prop up bad food companies without them needing to beat the same path to hell and damnation tobacco went down.

*Note: I say might be the only thing he got right because I did not have the strength to read the original. Thanks, Crikey, for regularly trawling through the Oz. There is certainly plenty worth noting if you have the bravery to trawl through the fluff, PR, etc — from memory the sport section is all right though.

Carbon tax misrepresentation

Peter Goon writes: Re. “Tough life of companies under carbon tax” (yesterday). Yet again another piece of excellent investigative journalism and analysis. Well done, most informative and much appreciated.

Interestingly (and likely the understatement of the decade), when the data and facts you have presented along with other related information and documents are viewed though the prism of the Federal Criminal Code of 1995, this makes for an even more telling read. As is said to witnesses at the start of every parliamentary oversight committee hearing: “Giving false or misleading information is a serious offence!”

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey