Clive Palmer’s hydroxychloroquine donation during Covid at heart of ATO dispute

Clive Palmer spent millions on experimental Covid drugs in the ‘national interest’ but the tax office won’t let him claim it as a deduction.

Clive Palmer is in dispute with the ATO over expired hydroxychloroquine.

Mining billionaire Clive Palmer is locked in a dispute with the Australian Taxation Office because he will not accept its rejection of a deduction claimed for an experimental coronavirus drug he ­acquired in the national interest.

The shipment, of about 30 million doses of hydroxychloroquine, was never distributed, and the case is heading to the Administrative Appeals Tribunal and potentially higher courts if Mr Palmer is unsuccessful.

Mr Palmer is seeking a tax deduction of almost $13m for the proven antimalarial drug he procured at a time when it was being promoted by US President Don­ald Trump to fight Covid-19. The US Food and Drug Administration revoked its authorisation for treating coronavirus patients.

Mr Palmer is claiming the deduction as a donation that contributed to defending Australia. The tax commission has applied a narrower and more literal definition of what constitutes the ­defence of Australia.

The competing interpretations are at the heart of the dispute.

Mr Palmer also claims the expenditure was relevant to his business interests and private company Mineralogy because the pandemic had the potential to shut down the West Australian iron ore industry from which he derives his wealth.

Australia’s fifth-richest person according to The List – Australia’s Richest 250, with a fortune estimated at $22.3bn, said it was not about the money.

“The sad thing about this is that it’s not a lot of money for me, but it’s a principle about Australians trying to do things for the community in good faith,” he said.

Mr Palmer also took a swipe at fellow mining billionaire Andrew Forrest, whose philanthropic foundation Minderoo pledged $300m towards importing testing kits and equipment, and had the costs it incurred reimbursed by the federal government.

“I stepped up and paid for it with my own money. I’m not asking for a refund of the money, like Andrew Forrest, who charged the government. We are just seeking a tax deduction,” Mr Palmer said.

Mr Palmer rejected previous reports that he had spent about $70m on the hydroxychloroquine doses.

The businessman and former MP said he was encouraged to import hydroxychloroquine during a meeting with then finance minister Mathias Cormann at a time when Australia was facing a public health emergency.

The doses were later destroyed after federal health authorities deemed hydroxychloroquine was not an effective treatment. But the millions of doses imported by Mr Palmer were added to a national drugs stockpile until the regulatory advice was revised.

Mr Palmer was an opponent of Australia’s border closures, which he challenged in the High Court.

The Health Department has acknowledged that, through the Therapeutic Goods Administration, it worked with Mr Palmer to “authorise him to import the medication but did not initiate the request to Mr Palmer to source the hydroxychloroquine”. The Palmer Foundation also paid for full-page newspaper advertisements promoting hydroxychloroquine at the time.

Mr Palmer’s Mineralogy International is seeking tax deductions for the 2019-20 and 2020-21 financial years. In objecting to the tax office’s rejection of a deduction, Mineralogy lawyers argue the defence of Australia is not limited to a military definition.

The objection sent to the tax office includes definitions of “defence” from the Collins, Oxford and Macquarie dictionaries. It also cites wartime measures and a parliamentary inquiry into the ­implications of the Covid-19 pandemic for Australia’s foreign ­affairs, defence and trade.

Mr Palmer said he would consider running a test case on the issue. “We’ve got a border force that’s a civil authority and not part of the military. Is that in defence of Australia? We’ve also got quarantine and biosecurity. All of that’s defending the country against threats,” he said. “What happens if we have some other national crisis where the government can’t move fast enough to protect Australian lives? Do you think other people are going to come forward now and provide their funds and do what the government wants done to help the country?

“We may take that other action to get a declaration of what is defined as the defence of Australia. No one knows what we’ll face in the future. And if Australians pull together, why should they be penalised for it?”

Originally published as Clive Palmer’s hydroxychloroquine donation during Covid at heart of ATO dispute