Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Link to this | Hansard source

In November last year I raised in the adjournment debate reports that a Melbourne based advertising company had provided documents to the tax office concerning payments to Mr Ted Horton, the Liberal Party’s advertiser who was awarded the lucrative government industrial relations advertising campaign in which a cool $55 million of taxpayers’ money has been hosed up against a wall in the most disgraceful way. I also raised reports that Mr Horton had made payments to international accounts. I asked the Liberal government to investigate this matter and tell the Australian people whether the Australian Taxation Office has sought documents from Ted Horton and whether any of those queries or documents related to the issue of offshore payments to Mr Horton for work done either in Australia or overseas.

This Liberal government, which after nearly 10 years in office has become drunk with power and no longer believes in any standards of public accountability at all, simply ignored my call. But not everyone did. Subsequently I received by courier five pages setting out a very serious prima facie case of tax avoidance on the part of Mr Horton. Two pages show salary payments made to Mr Horton in 1999-2000 and 2000-01, and a further two pages show the profit and loss statement for his company Horton Marketing and Communication for the same two years. For the financial year 1999-2000, the documents indicate that Mr Horton’s income was over $814,000, but the profit and loss statement for Horton Marketing and Communication shows income of only 34c and a net loss of $6,000. For the financial year 2000-01, the documents indicate that Mr Horton’s income was over $730,000 but that the profit and loss statement for Horton Marketing and Communication shows income of only $186,000—over half a million dollars less—and expenses of over $206,000 and a net loss of $20,000.

The fifth page of the documents delivered to me gives address details for Mr Horton and for a company based in New Zealand called Interim Placements International Ltd, of Dunedin, and a company based in the Netherlands, Northern Executives International Ltd. The allegation associated with this document is that Mr Horton had payments made first to New Zealand and subsequently transferred money to the Netherlands so that he could access those payments without having to pay tax in Australia on them.

This matter can no longer be ignored. As the Rob Gerard affair shows only too clearly, this Liberal government has developed a cavalier approach to tax avoidance in general and the use of offshore tax havens in particular. Those opposite have form in this matter. The Prime Minister must tell the parliament and the people of Australia whether he approves of people having their income paid into offshore banking accounts for the purpose of avoiding tax. We want to know whether he will investigate Mr Horton or any companies which made payments to him—such as Bates Hong Kong, Frank Moore and Mojo—or channelled his income into the New Zealand based company Interim Placements International Ltd or to Northern Executives International Ltd in the Netherlands.

The public is also entitled to know whether the Prime Minister’s committee on government communications sought to satisfy itself that Mr Horton’s tax affairs were in order prior to awarding him the lucrative industrial relations advertising contract and whether the Prime Minister will now ensure that Mr Horton’s tax affairs are in order before he receives any further taxpayer dollars.

Labor is very concerned about the manner in which Mr Horton’s company Dewey Horton won the IR contract, which did not go to a full tender. Since the last time I raised this issue in the House, Freedom of Information documents have emerged that show the government’s communications unit expressly instructed that the Melbourne arm of Young and Rubicam should be asked to pitch for the advertising contract. This is an extraordinary piece of micromanagement by the Howard government in a tender process, and the Australian people are entitled to know why. Given that Young and Rubicam is headquartered in Sydney, did this action tie their hands behind their back and help give the inside running to Ted Horton? It is time the veil of secrecy was lifted from the awarding of advertising contracts by the Ministerial Committee on Government Communications. It is too cute by half that this massive, lucrative contract given out by Liberal Party insiders just happens to go to the Liberal Party’s own advertising team. Rob Gerard might have disembarked, but the Liberal Party’s gravy train just keeps on chugging along.