ABC believes it has ‘money power’ shield

The ABC and the tax office appear to believe that their access to unlimited money power means they do not have to justify tax assessments or the risk of libel. Picture: AAP

The public service money power virus that has severely damaged the reputation of the Australian Taxation Office has mutated and appears to have infected the Australian Broadcasting Corporation. I suspect the infection is spreading into other government areas.

For decades the ATO has concocted past-year tax assessments without detailed analysis and then imposed them on smaller and medium-sized businesses in Australia. The dubious assessments usually include penalties and interest. There is a token internal appeal process and liberal use of garnishee powers on corporate and personal bank accounts, often with little or no notice to taxpayers.

The unfortunate taxpayer is shown the power of the government purse to break them via its ability to spend countless millions on expensive court appeals.

The money power imbalance forces the small and medium-sized business owners to settle irrespective of the validity of their case. In the gold case the ATO happily spent more than $40m. A set of entrepreneurs as a matter of principle and legal justice took on the ATO power and won but at a huge cost. For most, the money power imbalance is too great.

The ATO procedures look like changing under the current government but, until now, politicians have been too scared to change the system for fear of impacting revenue. But the inevitable breakdown of trust in the ATO will eventually hit revenue.

To the ABC. Leaving aside all the arguments about political bias, or non-bias, sadly the ABC has embraced a version of the ATO money power technique.

Let me first set a libel benchmark based on my experience at BRW magazine and other past journalistic areas. In my editorial and publishing roles, part of my task was to sit down with journalists and one of the top Australian defamation lawyers, Peter Bartlett, and sort out whether the proposed article could be successfully challenged in the court on libel grounds. Bartlett was a genius in conveying the proposed article’s message in a way that met the libel laws. But at the end of the process Bartlett always warned us that legal protection depended on two or three key facts being correct. If they were wrong we would lose any court battle.

That led to a triple fact-checking exercise and if the article passed the test it was published.

I can’t remember ever being sued over an article that went through that legal process. The greatest danger was in articles when no-one had realised the libel danger and facts had not been double-checked.

In cases where we recognised we were wrong we ate “humble pie” quickly ---- with apologies and corrections. Usually that was the end of the matter.

Since then publishing groups have become prepared to take greater risks and the number of successful libel cases has increased.

Accordingly the ABC might argue that it was following a publishing community trend, but nevertheless I was stunned when, as part of the settlement in the Christian Porter case, the ABC conceded the following as a fact: “The ABC did not contend that the serious accusations could be substantiated to the applicable legal standard – criminal or civil.”

In other words the item was published knowing it could not be justified if the ABC was sued. If I had I had made such a statement it would have carried an immediate offer of resignation which BRW’s owners (Fairfax) may well have accepted. But I simply wouldn’t have knowingly contemplated such an action that relied on shareholder money even when Fairfax was a strong company.

Christian Porter, speaking after dropping his defamation case against the ABC. Picture: Jane Dempster.

But the ABC and the ATO both appear to believe that their access to unlimited money power means they do not have to justify tax assessments or the risk of libel. The only ATO/ABC money power qualification is that it is important that the person being attacked does not have unlimited money themselves.

I do not know the finances of Christian Porter but for most politicians, unless there is inherited wealth, the effort of getting into parliament does not normally enable them to generate substantial wealth. The ABC initially put $700,000 on the Christian Porter table in the early stages of the case and was prepared to spend another $2 million to pursue a case where it knew the serious accusations could not be substantiated before a civil court. The ABC has the money and they correctly adjudged Porter could not afford to match the $2m and combined with other reasons he would settle.

But he did extract the above statement plus $100,000. As far as we know no ABC top executive resignations were offered and some parts of the ABC declared a “victory”.

I fear that what we are seeing in the ABC and the ATO is merely a reflection of an increasing belief in the public service that it can take aggressive stands and win because it has access to unlimited money power.

It is true that ABC money, like other government bodies, is limited by budget allocation but the budget allocations are sufficient to see off most members of the community.

Democracy has been put under strain in recent years but the belief that is beginning to infect government employees that they are immune from the justice system because they have unlimited money is the biggest threat of all.