Media minnow is grateful for swipe by foreign media gorilla News Corp

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News Corp headquarters in New York

It is with a deep sense of gratitude and humility that we pay homage to Rupert Murdoch’s News Ltd today and The Australian newspaper.

For yesterday, The Oz puffed a story about yours truly off its front page. A very nice picture it was too. Strangely, there was no “exclusive” tag on the story but it was terrific advertising nonetheless. The point of the story itself, “GetUp! cash behind ‘independent’ journalist” seems to be an effort to discredit yours truly as somehow in GetUp!’s pocket.

As per the clear disclaimers at the bottom of our tax coverage, GetUp! and the Tax Justice Network are funding michaelwest.com.au to investigate the financial statements of 20 multinational companies and their tax affairs. It is a one-off arrangement. There is no Faustian pact.

In any case, receiving a tutorial on journalistic ethics from the folks at News Limited is a bit like being accused of being a Nazi by Adolf Hitler.

They don’t do things in half measures at Holt Street though and have sooled another reporter onto this incredible non-story story.

The Australian’s legal affairs editor, Chris Merritt, sent nine questions late yesterday (these are appended to the bottom of this article) asking about our commercial arrangements and so forth.

So it was that we sent Chris some questions about News Limited’s commercial arrangements and so forth. Here they are:

QUESTIONS FOR NEWS LIMITED

Hi Chris,

Appreciate the publicity thanks. My questions for you:

1. Did The Australian lose $50 million last year? If not, how big were the losses?

2. Please explain the financial arrangements between The Australian, News Ltd and the oil and gas industry.

3. Would you care to provide a statement explaining why you believe the independence of your journalism is not compromised by a). News Ltd’s advertisers and other commercial arrangements and, b). the stewardship of Rupert Murdoch?

4. Is News Ltd still regarded as the ATO’s number one corporate tax “risk” in Australia?

5. I assume from the tenor of your final question that you intend to question my integrity. Are you personally comfortable to be firing the bullets for a global media organisation (whose newspaper loses money) against a small business person who has taken significant personal risk and whose journalistic enterprise is 1). well regarded, 2). engaged in important public interest journalism and 3). profitable?

Rupert Murdoch’s US empire siphons $4.5b from Australian business virtually tax-free

We are deeply appreciative of Chris’s questions as he prompted us to take a look at the financial statements for Rupert’s holding company News Australia Holdings.

According to ASIC records, Rupert Murdoch’s News Australia Holdings has two US shareholders: News Corporation and FHC Holdings, LLC. According to the financial statements however, News Australia Holdings has three “members” or shareholders.

Revenue last year was $3.1 billion, gross assets stood at $8.2 billion and employees 9,119.

After costs, including interest expense of $138 million – mostly to related News Corp entities – the company booked a profit of $156 million and tax expense of $54 million. Bottom line profit was $70 million.

Following criticism here of a $902 million loan of 15 years duration to Foxtel, the suspiciously high interest rate of 12 per cent has been “modified” in the latest set of accounts to 10.5 per cent. That is still high; compare the loan to News’ REA group which shows a weighted average interest rate of 3.2 per cent.

News loans to Foxtel questioned

The point of the related party borrowings are that they enable News to wipe out $130 million in profit before tax is due. That money is presumably funnelled offshore to another News Corp entity.

News was criticised in 2013 when the company was awarded a tax rebate of $880 million after winning a case against the Australian Tax Office (ATO) in the Federal Court. The rebate sparked controversy as the ATO elected not to appeal the case at a time when the federal election campaign was in full swing, Murdoch’s newspapers were backing Tony Abbott for prime minister and Mr Abbott was ahead in the polls.

QUESTIONS FROM THE AUSTRALIAN’S LEGAL AFFAIRS EDITOR, CHRIS MERRITT

Michael,

I am preparing an article on your arrangement with GetUp and have a few questions:

# Could you please tell me what financial arrangements – or any other arrangements – you have made with GetUp?

# Specifically, could you please tell me how much GetUp is paying you to produce articles about tax avoidance by big companies?

# Could you please tell me whether GetUp has paid you for other articles or services?

# Could you please tell me when those payments were made and for what purpose?

# Was any financial arrangement – or any other type of arrangement – in place when GetUp quoted you extensively in a press release it issued on September 12 last year concerning opposition to any privatisation of ASIC’s registry?

# A total of 84 journalists signed the open letter that is referred to in that press release. Do you know why you were the only journalist whose remarks were used in the press release?

# Did you have any financial arrangement – or any other arrangement – in place with GetUp when, on September 9 last year, you posted a video to your website that urges viewers to sign GetUp’s petition against any privatisation of the ASIC registry

# Did GetUp make a financial arrangement – or any other arrangement – with you that concerns GetUp’s decision to publish a promotional video for you and your website on the GetUp website?

# Would you care to provide a statement explaining why the independence of your journalism has not been compromised by your links to GetUp?

Here is a detailed assessment of the track record of News paying tax in Australia as confirmed by the company’s response to questions on notice for the Senate Inquiry into Corporate Tax Avoidance:

News Corp shows it’s all about how you present the numbers

Editor’s Note: 

You can follow readers’ reaction on Twitter below by scrolling down the Tweets. Please join in!


  • Sandi Keane

    Some great support for Westie on Twitter about serial tax rorter Murdoch trying to smear Michael West for.. err… investigating tax rorters… through GetUp!

    Jump on board folks and get your comment up on our Widget! Remember to use @MichaelWestBiz!

  • Marilyn Shepherd

    The stupidity of the Murdoch rags is astounding, Get Up is not an organised thing, it’s ordinary citizens paying donations for various investigations or protests and at least half of the hundreds of thousands of casual members are older former liberal party voters who loathed Howard and the racist wars and abuse of refugees. But never mind, I still wear this bit from an Australian editorial as a badge of honour.

    “Adelaide busybody Marilyn Shepherd’s hysterical emails to
    editors also point the finger at The Australian. Her brand of reasoning claims
    that “people are dead, people are injured, more might die because the
    Australian Government and media would not stop whining”. Forget the tragic
    fire on the boat off Ashmore Reef. The deaths are “on our heads”, she
    shrills, for ignoring her “increasing alarm about illegals and so on”.
    She asks: “Are you journalists hard of reading and hearing?” No, we
    value mature, reasoned debate over reems of drivel.”
    Now you have to admit with their record they would state that the reems of drivel they were on about was the refugee convention.

  • Steve F

    I wonder if News Corp will do a similar piece on the IPA given it’s highly visible and over represented media presence (including on the ABC), it’s Tax Free status and it’s direct influence on government with it’s IPA branded MP’s.

  • Sean

    I think these are fair questions Michael. I don’t think it’s unreasonable to expect an independent journalist to provide disclosure of whether he was paid or not paid for certain services to entities he’s writing about/for.

    It’s impossible to have truly independent or unbiased reportage, the output is always affected by its passage ‘through the pipe’ (i.e., the author), but disclosure would allow people to evaluate your independence for themselves and is no different to uni researchers having to acknowledge where their funding comes from or financial pundits having to acknowledge their holdings.

    (That said, I think your journalism is great, and an important public good. Tell News Corp to suck it.)

  • Hmm.. re-titled: Pot calling Kettle, black-bum!

  • Rainer the cabbie

    Ah geez, News Corp conducting a campaign for their corporate sponsors. Nothing new to see here, just the same treatment Media Watch received over the years.

    All in all a compliment to @Michael West, you must be stepping on some toes.

  • Tinman_au

    Be interesting to see the resonse from Chris Merritt

  • emtedee

    I always hark back to this quote from one of Murdoch’s one time editors Bruce Guthrie, in an article in the Age on 10 July 2011 he wrote:-
    “In 1988, while attending a conference of News Corporation editors in Aspen, Colorado, I made the mistake of raising the thorny issue of journalistic ethics. The proprietor, Rupert Murdoch, was not amused.
    In short order, Murdoch, who was hosting the session, turned red, then purple, as I repeatedly asked a senior executive from his London paper The Sun whether the publication had any ethical framework. It didn’t, the paper’s news editor finally admitted. In most media companies that admission might have earned the executive a rebuke. But instead, I copped it, with Murdoch later dismissing me as a ”Fairfax wanker”. (For the record, I wasn’t at that point; I became one 12 months later.)”
    I have the whole article if its of further interest

    • Emma Inglis

      “Fairfax wanker” is a wonderful insult, if, indeed, it can be construed as an insult at all! Haha

  • John Saint-Smith

    Much as I dislike the tax avoidance activities you have unveiled, few things would give me greater pleasure than waking up to the news, on other media, that The Aus, and its proprietor had been convicted of gross tax misconduct, and that the proprietor had been charged with fraud, with extradition from America pending.

    Of course, the money is so much less important than applying an appropriate punishment for the unending stream of breath-taking lies pedalled by the Australian’s jackal journalist pack over the past 15 years.