EDITORIAL MONDAY 31.05.10.
If there’s one thing Australians really don’t like it’s hypocrisy. The Rudd Government’s decision to suspend its own rules about tax payer funded advertising and spend $38 million on promoting the proposed new Resource Super Profits Tax is the latest in a long line of misjudgments eroding their credibility. In 2007, then Opposition Leader Kevin Rudd described the misuse of government advertising as “a long term cancer on our democracy”, and promised to refer all advertising campaigns to the Auditor General for approval. In government, Kevin Rudd backed away from the commitment to be guided by the Auditor General and instead introduced a set of guidelines administered by a committee. But in the face of a concerted advertising blitz by the mining companies opposing the new tax, Kevin Rudd has simply suspended his own guidelines so that he can spend our money mounting a counter offensive in the media.
Of course, this is nothing new. It has been done over and over again by government after government, spending taxpayers’ money on government “information” campaigns which really amounted to nothing more than propaganda for policy decisions. No doubt, the Prime Minister will be tempted to make much of his predecessor’s record in this area. In fact, the Howard Government were masters of the game, spending around $2 billion on such campaigns over their ten year term of office. The Howard Government spent about $420 million of our money telling us that the GST was a good thing, and another $120 million telling us all that Work Choices would make the world a better place. On that scale, Mr. Rudd’s $38 million budget seems positively modest.
The difference is however that when Mr. Howard was asked to justify the expenditure he simply said that it was something that all governments did. That wasn’t hypocrisy, that was just brazen. But he was right. All governments did it, and as we can see, they still do now. Mr. Rudd, on the other hand, promised that he would not. His government would be different. His government could be trusted to keep its hands off our taxes and refrain from such tawdry behavior. Instead, Mr. Rudd has shown that his government is no different form any other in this respect, spending our money not only on the mining tax ads, but also on ads telling us all how wonderful health and hospital reform will be. We all know that we need hospital reform, and we can’t wait for it to actually deliver improved services, but we don’t need an advertising campaign to tell us what we already know. We just need them to get on with making it happen.
In some respects it could be argued that the mining tax ad campaign actually has some legitimacy because the government is faced with a similar campaign mounted by its critics which is quite blatantly propaganda for the mining lobby. The government is in a position where it is damned if it responds and damned if it doesn’t. And although the decision to run the campaign looks like hypocrisy from a government which promised not to do such a thing, it should also be clear that nobody has a monopoly on manipulating the truth. The mining companies should also be criticized for misappropriating their shareholders funds to pay for an unproductive advertising campaign which is blatantly political, and not entirely truthful.
Obviously, the mining companies paying for those ads are doing so from deep pockets. When you think carefully about it that would seem to indicate that perhaps the government might have a point about the miners being in a position to pay a fair share to the citizens of Australia through the proposed new tax. Furthermore, they are paying for their ads with the unwitting and unwilling assistance of the taxpayers anyway, because you can bet your bottom dollar that come tax time they’ll be claiming the expense as a write off. But most importantly, there is evidence to suggest that the proposed tax is not the factor which has driven their share prices lower.
At a time when share markets around the world have once again been rattled by concerns over sovereign debt in places like Greece, Portugal, and Spain, the Australian share market has been no exception. Our markets have fallen just like everyone else’s, with a decline in the ASX 200 of more than 7% across the month of May. In fact, if anything the mining sector has bucked the trend with a fall of less than 5%, well and truly outperforming the rest of the market. Far from driving the market down, it could easily be interpreted as a positive effect on the mining sector. But of course, the mining companies won’t be spending millions of dollars on an advertising campaign to tell us that.
Now who are the hypocrites?