Sorry, taxpayers, but you have just been the victim of a beautiful sting

Finance Minister Katy Gallagher defends the government’s decision to spend $40m on an advertising campaign for the rebranded stage three tax cuts, saying ‘it’s public information’. Picture: NCA NewsWire / Martin Ollman

Taxpayers, please accept a sincere apology for my role in costing you $40m. I had been operating under the impression that the tax cuts that take effect on Monday were being delivered under the banner of “stage three”, the final instalment of a slow-drip plan to return bracket creep to workers that began many years ago.

But I was wrong. And given its respect for public funds, the Albanese government has reluctantly been forced to communicate – at great expense to some 13.6 million workers who will share in the $23bn cashback – that stage three is dead. Buried. Cremated.

Labor’s bold initiative, crafted over the Christmas break and announced in late January, should be given its rightful name: the cost-of-living tax cuts.

Me and my colleagues at this newspaper, and pretty much every other reporter and commentator in the cheap seats of the arena, haven’t caught up with the rebrand in our incessant coverage of inflation, interest rates, net zero, nukes and Julian Assange.

Bottom line: Treasury is spending $40m to tell working Australians the extra money that will soon pop up in their bank accounts is not a financial error, but part of the federal government’s carefully calibrated and rebirthed cost-of-living relief.

“At the start of this year, our government made the decision to reform the tax cuts we inherited, so they would benefit every taxpayer,” Anthony Albanese said on Thursday of the hefty windfall Labor was bequeathed by the outgoing Morrison government in 2022.

I guess many people will not realise this is what passes for tax reform in this country, so the Prime Minister feels it’s necessary to put it up in digital and broadcast lights. Plus, not everyone follows politics as closely as the readers of this newspaper or the folks who rock up to Senate estimates.

Another slow learner, apparently, is ACT independent senator David Pocock. Last month, five weeks after the tax cuts advertising campaign was launched in late April, Pocock was still using the term “stage three”. It probably qualifies as a microaggression.

At estimates, Pocock told officials and Finance Minister Katy Gallagher that the $45m cost of the campaign (a total departmental appropriation according to May’s budget papers), “really jumped out at me when I was looking at the budget”.

In a past life, jumping out in front of the openside flanker was a bruising experience; like the Bledisloe Cup, estimates can be a grind in the mud. In any case, Pocock said the allocation “seems like an extraordinary amount of money when there is $14m for food pantries”.

“How is it decided that we need to shovel money to Meta and spin advertising when we can’t fund things like food pantries?” he asked.

Welcome to the big house. Gallagher replied that public information campaigns were a standard feature in our system.

The minister should know. She did excellent work during Labor’s years in the wilderness trying to expose the rorts and wasteful spending on politically motivated government advertising, which always gets out of hand in the period before an election.

In its final year in office the Morrison government splurged a record $339m on campaigns, including advertising about economic recovery, Covid-19 vaccinations and emissions policies, as well as for cyclical events such as that year’s census and federal election.

At the May 30 hearing, Gallagher said “there is a requirement and a responsibility to give information to people about what the government is doing”, noting the coming tax measures but also the consent campaign Stop it at the Start.

“But there’s $40m over a few years for consent and then $45m in a year to explain that people are getting tax cuts, which most people will figure out,” Pocock countered. “Who benefits from spending $45m on explaining? Simply advertising that the government is cutting taxes for people – I’m struggling to see the public benefit in that when that money could go to consent or all sorts of things.”

Gallagher said the government had instigated a number of different campaigns, “and that will continue”. There was a vetting process; officials had to be confident campaigns represented value for money.

“It’s public information,” she went on. “Not everybody watches Senate estimates. Not everybody watches the news.”

Again, watching the news or reading reports of such exchanges in estimates wouldn’t help because journalists like me were still fixated on stage three. The game had moved on, but we were stuck in our old ways.

Gallagher drew Pocock’s attention to a $36m campaign (amid a total appropriation of $45m) that he would not take umbrage with, namely to promote what she called the “big economic transformation happening across the country” from Labor’s signature Future Made in Australia program.

We won’t forget that glorious name, unless there is a change of ownership after the poll due next year and the Coalition employs a marketing guru, at a reasonable cost of course, to rebrand.

To manage these two chunky campaigns, Treasury has created a temporary unit known as the Public Information Branch. It will cost $5m over two years. At an estimates session this month, West Australian Liberal Dean Smith described the branch as “Orwellian”.

It is likely to grow to employ 16-20 public servants, with the top hires having “previous government campaign experience, as well as any engagement with social media and stakeholder liaison or previous media-buying experience” according to the bureaucrat in charge.

In its first year in office, Labor cut back campaign advertising in real terms by more than half.

But spending has since ramped up, with campaigns to spruik its cost-of-living relief package for households, Medicare urgent care clinics, ­elevating the teaching profession and its failed referendum for an Indigenous voice.

Grattan Institute analysis shows about a quarter of government spending on advertising is politicised in some way, by both sides of politics. Historically, about $50m on average each year has been spent on campaigns that are politicised, the institute found.

Treasury’s chief operating officer, Angela Barrett, told estimates that when the tax cuts campaign was being developed, the original research revealed that “while 50 per cent of Australians had heard something about tax cuts, only 4 per cent knew that everybody would receive a tax cut”.

Canberra, we have a problem. All this free media, generated for something people would eventually get without having to apply for it, was failing to cut through. Maybe this was a ploy by media companies and their stooges; hold back key details, like the new name, and a reforming government devoted to transparency and the right to know would have to fill the void through paid media. Genius.

Sorry, taxpayers, but it was a beautiful sting.