According to the ABC’s Barrie Cassidy “even the most popular decisions taken by this government [are] essentially public relations disasters”. It’s one of those self-fulfilling media memes, resulting partly from Labor’s deficient PR skills and partly from Tony Abbott’s cynical, relentless negativism, but even more so from the media’s own determination to portray a picture of muddle and crisis whether it actually makes any sense or not in a given situation.
The current situation with asylum seekers is quite a good example. How many Australians are aware, for example, that the number of asylum seekers arriving by boat since Julia Gillard announced the “Malaysia Solution” almost 6 weeks ago has fallen by more than fifty percent compared with last year?11. KP: Compare last year’s total of 6,879 with the 300 or so who have arrived since Gillard’s announcement. [↩] Of course Tony Abbott is claiming that the deterrent effect flows from the SIEV sinking tragedy at Christmas Island late last year and no doubt that is a factor. But at the very least you’d expect that such a large drop in arrival numbers might have dampened media enthusiasm for the simplistic “government in crisis on asylum seekers” line. Announcing the Malaysia Solution before a final deal had been done might have been a high risk strategy for Gillard, but it’s a strategy that so far has actually worked!
An even more egregious example of media groupthink is provided by MSM coverage of Twiggy Forrest’s threat to launch a High Court constitutional challenge to the government’s mining tax legislation. As Adele Ferguson breathlessly informed us in the Fairfax press:
The Gillard government’s credibility is about to take another battering as one of its more complex and ad hoc tax reforms – the minerals and resources rent tax – faces the threat of a constitutional challenge in the High Court.
But why would the government’s “credibility” take a battering merely because a disgruntled businessman takes a case to court? Just about every law ever passed by Parliament creates winners and losers, and the losers frequently take it to court if they have enough money. Forrest’s antics would only pose a threat to the government’s “credibility” if credible legal analysis suggested that a legal challenge had a significant prospect of success. But Ferguson made no effort to obtain any expert commentary on that question. Nor did the ABC’s Chris Uhlmann on last night’s 7:30, although at least his questioning of Forrest was less credulous than Ferguson’s frankly silly article.
In fact Twiggy’s own utterances on the supposed constitutional question have been just as silly as Ferguson’s article to the point of being almost incoherent:
ANDREW FORREST: If it’s unconstitutional, if it’s unfair, if it discriminates against Australian companies and favours multinationals, I think, on behalf of so many other companies, and really, all Australians, that’s a precedent too dangerous not to challenge.
CHRIS UHLMANN: You must have tested that with your lawyers, what are the answers to those questions?
ANDREW FORREST: At this stage it looks highly unconstitutional, but clearly Canberra has different lawyers.
CHRIS UHLMANN: On what grounds though, because it’s not unfair if it’s just being better for one company than another?
ANDREW FORREST: Certainly. But if it discriminates against the States, if a State is taxed more heavily against another State, then that goes straight against the Constitution. Western Australia recently, as is of course their right, increased their royalties, we immediately have discrimination now.
CHRIS UHLMANN: Why didn’t you complain about that?
ANDREW FORREST: Well simply because it’s their sovereign right. They own the metals in the grounds, we don’t, it’s been under the Constitution, owned by the people of the State. So they have every right to put it up.
But further, schools, hospitals, police, etc, are getting paid. We’re not funding a great big dinosaur called the NBN (National Broadband Network), where we’re going to waste a good $30 billion.
CHRIS UHLMANN: But that really has nothing to do with it, the Federal Government, does have a right to raise taxes, it raises company taxes, against you for example, so it can raise another tax …
ANDREW FORREST: And it can do it again, and I’ll happily pay it. And I’ll happily pay this tax as well, no problem, provided of course that it doesn’t let multinationals off and just penalise Australians.
But the problem for Twiggy is that the taxation power (Constitution s 51(ii)) prohibits discrimination “between States or parts of States” not between Australian companies and multinationals (assuming for present purposes that Forrest’s claim about multinationals is actually correct). And the fact that the WA State government has increased its mineral royalty tax cannot as a matter of law or logic make the Commonwealth’s MRRT discriminatory (as Uhlmann gently pointed out).
Even if the Commonwealth MRRT had a differential impact on some States or parts of States as opposed to others (which Forrest does not seem to be claiming anyway), that would not make it discriminatory for taxation power purposes. In R v Barger 22. KP: (1908) 6 CLR 41 [↩] the High Court ruled that a Federal excise duty requiring manufacturers to obtain a license to produce agricultural implements, including a requirement on licensees to provide specific employment conditions in factories where agricultural implements were produced was not a discriminatory tax for constitutional purposes. Although the excise duty might in practice have a differential or unequal operation depending on the locality of the taxpayer, this did not arise “from anything done by the Parliament”. The law was not discriminatory on its face, and therefore did not offend section 51 (ii).
Conroy v Carter 33. KP: (1968) 118 CLR 90 [↩] concerned a Federal law regulating the egg industry contained provisions requiring owners of hens kept for commercial purposes to file particular information with the Egg and Egg Pulp Marketing Board. However, the law also empowered the Commonwealth to enter into arrangements with a particular State for the collection of levies and the regulation of the poultry industry generally. Clearly, this carried with it the potential for differential and thus discriminatory regulatory regimes. Nevertheless, a statutory majority of the High Court held that the law was not discriminatory within the meaning of section 51 (ii)). A law will only be “discriminatory” for the purpose of section 51(ii) if it expressly discriminates against States or parts of States on the basis of locality. The fact that it may in practice have a differential or discriminatory effect is irrelevant.
It is highly unlikely that any challenge to the MRRT based on its being a “discriminatory” tax would succeed.
The other argument that Forrest seems to be flagging (though not clearly) is that the MRRT might infringe Constitution s 114, which prohibits the Commonwealth from imposing “any tax on property of any kind belonging to a State”. Generally speaking, minerals within the boundaries of a State are the property of the Crown in right of that State (i.e. the State government). A mineral lease gives the holder the right to dig up minerals within the lease area, process them, sell them and keep the sale proceeds less mineral royalty. However the minerals themselves remain the property of the State until sold by the miner. Accordingly the Gillard government will need to be careful how it drafts the MRRT. The tax will need to attach to the miner’s estate or interest in the minerals rather than to the minerals themselves, but drafting the legislation to avoid any problem with s 114 is hardly rocket science.
So why is the fact that Forrest is mouthing off about a High Court challenge a threat to the Gillard government’s credibility? Because it fits the media’s current groupthink meme and apparently for no other reason.