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ECONOMICS LEGISLATION COMMITTEE - 29/05/2000 - AUSTRALIAN TAXATION OFFICE - Output 2.1.4—Taxation and income support policy advice

Senator COOK —If I can just go back very briefly—

Senator Kemp —Before you go on, Senator Cook, we had an issue that was raised on the cash economy. We have the tax office officers at the table and they would like to add further to some comments.

Senator COOK —I want to go on to that but there is just a question left over from the issue of industry policy. If the government does have those commitments, why did it feel it necessary to conduct a further review to canvass options for shortening the reduction in tariffs?

Senator Kemp —I think we have had the comment. We are checking our papers, Senator.

Senator COOK —I just want to get that question into your thinking.

ACTING CHAIR —Next question, Senator Cook.

Senator COOK —It seems that the minister's advisers in the tax office have some clarifying to do.

Mr Jones —Senator, before when you were asking your questions about the cash economy I mentioned the fact that we could go back and have a look at the cash economy task force to report whether we had a position on the total value of the cash economy. We have done that over dinner and I just thought we might report back to you what the result of that examination was. In essence, we did not take a position on the actual value of the cash economy in that report but we did state in the report that we had found, I think, that the range of percentages for the cash economy of the GDP was from 3.4 per cent through to 13.9 per cent by various commentators. I guess we tried to bring together that range of research, if you like, that had been around. We had undertaken to bring that back to you. There is a wide range there.

Senator COOK —Indeed. I will not pursue any further questions on that matter for the moment. If I can now just ask Mr Matthews a couple of questions about it. Mr Matthews, you have made, I think, various media appearances of late concerning the GST, haven't you?

Mr Matthews —Yes, a number, I guess.

Senator COOK —Do you know how many you have made?

Mr Matthews —No.

Senator COOK —Could you find out and let us know?

Mr Matthews —I will do my best to backtrack over that. I do not keep a detailed record. Some of those obviously come up on the spur of the moment, according to what is happening in the media at the time.

Senator COOK —You would keep a diary, though, wouldn't you?

Mr Matthews —Not of those. I am not sure what you count as a `media appearance'. Sometimes it is a phone call from a journalist that can happen at the spur of the moment or a request to do a radio interview at very short notice. No, I am afraid I do not keep a record of all of those. The ATO media unit may well be able to help me put together a statement which would reflect those activities in the broad.

Senator COOK —A statement which would reflect those activities in the broad which would give us a grasp of the extent to which you are a media darling would be appreciated, Mr Matthews. I am specifically interested in the occasions in which you do appear on radio as a guest of a significant radio figure—occasions that surely would stand out. There have been a number of those, haven't there?

Mr Matthews —There have.

Senator COOK —Do you keep a record?

Mr Matthews —I think I would be able to track most of those.

Senator COOK —Thank you. I would appreciate that.

Mr Matthews —Are there any in particular?

Senator COOK —I will come to them. Given the number of set piece interviews, which is what I was just asking you about, do you think this is the proper role of a public servant to represent the government policy as widely as that?

Mr Matthews —Could I ask, for clarification, what you mean by `set piece'?

Senator COOK —What I mean by a `set piece' is whether you are sitting at your desk with the phone to your ear conducting a formal interview with a radio host or whether you are sitting in the studio conducting a formal interview with a radio host, propagating government policy.

Mr Matthews —All of my activities in the media, whether radio or otherwise, have been in the interests of providing information on the new tax system and its operation to the community. In most cases they are either talkback or responses to questions that are coming through from the community into radio stations, or they are on issues of the day requiring clarification as to how the tax works and what taxpayers' obligations are under the new system. All of my activities have been consistent with informing the public as part of the broad campaign and part of the responsibilities in the role of implementing the new tax system, particularly the GST.

Senator COOK —An enthusiastic advocate of government policy is perhaps how I had better put it.

Mr Matthews —As I say, I have been explaining the policy and background quite consistent with what the commissioner has said this morning, that is, it is a requirement for the integrity of the future tax system that the community understand not only its operation but why it is changing and how it will operate in the future. That I have taken as my role in explaining those issues that come to the fore in the media from time to time or in response to questions from the public.

Senator COOK —Do you acquire a transcript of what you say when you appear in these set piece appearances

Mr Matthews —Do I require a transcript of the event afterwards?

Senator COOK —Yes.

Mr Matthews —They come through sometimes if there are issues that are still being pursued, but very often not; in most cases not.

Senator COOK —So you do have a number of transcripts of what you have said on radio.

Mr Matthews —Certainly there are some, yes.

Senator COOK —Can you provide them to the committee?

Mr Matthews —Those that are available, yes.

Senator COOK —When you are speaking, are you speaking for the tax office or for the government?

Mr Matthews —I am speaking for the tax office, from my role as Deputy Commissioner responsible for implementing the GST and responsible for the education campaign that goes with it.

Senator COOK —Do you guarantee that when you are speaking for the tax office—and if you are speaking for the tax office you would agree, would you not, that your words carry special significance in the ears of taxpayers—that you have not misled the public at all in any of these public interviews?

Mr Matthews —I certainly have done my best not to do that. As said, I regard it as vitally important that we get out clear and accurate information to the public on the new tax system.

Senator COOK —Yes, I appreciate, as you say, that you have done your best, but do you guarantee that you have not misled?

Mr Matthews —I have certainly not misled anybody, to my knowledge. If you have any examples there where you think that I may have done so, I am happy to take that on board and explain what I said. If I have made some mistakes I will face up to them, but my certain commitment is to providing accurate information to the public.

Senator COOK —Let my put the question another way. To the best of your knowledge, are you sure you have not misled?

Mr Matthews —To the best of my knowledge I am sure I have not misled.

Senator COOK —Is there a quality control mechanism? Does someone from the department listen in to make sure that you have got it right or not?

Mr Matthews —The quality control processes are usually, particularly when there is talkback, that I would have somebody from the technical legal area with me often participating in that same talkback program to make sure that between us we can cover the sorts of questions effectively and accurately on the station. In order to do that, we very often try to seek information from those who are asking us to go on those stations of their particular topics so that we can be sure we get information accurate in preparation to respond to those. I would certainly draw on our technical legislative people before going on if there are particular issues that are running to make sure that we give accurate information.

Senator COOK —That is an impressive array of back-up, which would suggest that you have not made any mistakes.

Mr Matthews —I certainly endeavour not to make any mistakes.

Senator COOK —And you say that to the best of your ability you have not and you have got all these checks in place to make sure you haven't?

Mr Matthews —I am hopeful that I have not. I do not believe I have made mistakes; where I am uncertain about something I usually give a clear indication to that effect.

Senator COOK —Last week you gave an interview to Neil Mitchell at Melbourne radio station 3AW. Do you stand by the accuracy of the remarks you made in that interview?

Mr Matthews —That was certainly one of those occasions where I made it clear in the course of interview that I would have to check some information. I gave an opinion that I thought was right and made it clear that I would then go and check to confirm that. The transcript would show that.

Senator COOK —And did you do that?

Mr Matthews —I did go back and check that.

Senator COOK —And do you stand by your remarks?

Mr Matthews —I stand by the fact that I said I would check the information, indicating I was not certain about it. I then did that and found that the opinion I expressed, subject to checking, was not the correct one. But I had indicated clearly that it was not one I was sure about.

Senator COOK —But a moment ago you said, did you not, that to the best of your knowledge you had not made any mistakes. And now you have just said—

Mr Matthews —I said a moment ago that where I was uncertain I would make it clear that I was uncertain, and I did that in that interview, where I was asked to in effect express an opinion. I did so and I said effectively `I will need to check'.

Senator COOK —You said effectively you would need to check.

Mr Matthews —I used the words `I will need to check'.

Senator COOK —Did you?

Mr Matthews —I believe so, if my recollection of the transcript is right.

Senator COOK —Isn't it a fact that you stated, in relation to the GST:

The definition of charities specifically excludes political parties just for clarification.

Are those words familiar to you?

Mr Matthews —Yes, I did say political parties—in fact, that was my intention since there was some indication that political parties qualified as charities, from interviews the previous day. And there was an issue therefore in the media about that, and I sought to clarify that political parties are not charities.

Senator COOK —You have clarified that the political parties are not charities?

Mr Matthews —Yes.

Senator COOK —What did Mr Mitchell ask you, Mr Matthews?

Mr Matthews —My recollection is that he then went on to pursue the issue towards fundraising activities of political parties, and I expressed a view—and this is where I clearly in the interview became uncertain. What I was not sure of and had not picked up was that some of the GST provisions apply to deductible gift recipient organisations. As I checked subsequently, I found out that political parties, while they are not charities nor are they exempt from income tax, are in fact deductible gift recipient organisations and therefore some of the provisions and the GST legislation that apply to charities actually therefore apply to all deductible gift recipient organisations, in which I discovered political parties are included. And I had expressed, at the end of the interview, that I needed to check particularly some of the amendments before the parliament in relation to fundraising. I indicated in the interview that I would need to check that.

Senator COOK —Can I just go through the transcript that I have of this interview?

Matthews: Neil, I could raise something you discussed yesterday with the Australian Institute, and there was some conclusion that political parties were charities. I did want to take the opportunity to just say that the definition of charities specifically excludes political parties, just for clarification there.

Then Mitchell takes you up:

Okay, but they will be able to undergo certain types of fundraising and not be paying a GST?

You are familiar with that question?

Mr Matthews —Yes.

Senator COOK —Then you say, `I think not'—in which you deny the proposition.

Mr Matthews —I said `I think not'.

Senator COOK —Yes. He says:

Okay, but they will be able to undergo certain types of fundraising and not be paying a GST.

You say, `I think not'.

Mr Matthews —That is what I said.

Senator COOK —You say:

I have not got the latest amendments in front of me but, you see, the non-commercial suppliers and some of the concessions for fundraising really only apply to charitable organisations.

Let me just emphasise some of those words: `... and some of the concessions for fundraising really only apply to charitable organisations. So I think that that was there was maybe a bit of misunderstanding there.' Is that answer accurate?

Mr Matthews —It is, as I explained earlier, I am starting to show there some uncertainty around the issue. It is certainly correct that political parties are not charities. What was going through my mind in that interview at that point, and I did not recall correctly that political parties are deductible gift recipient organisations. So to that extent it was correct in so far as that those provisions do not apply to political parties because they are not charities. However, on checking subsequently, and as you go on I confirmed that I would need to check, I found that they did qualify as deductible gift recipient organisations.

Senator COOK —Mitchell comes back, he does not let you go. He says:

So you are telling me that fundraising by political parties will be subject to the GST?

And you reply:

Yeah. Well, I think they are certainly not charities so they do not get any of the entitlements to charities.

And Mitchell goes on; he still does not let you off:

So will they be subject to the GST for fundraising?

And you reply:

I think they will, yeah. I think that that is—I would just like to check the most recent amendments.

And off you go. Do you accept that anyone listening to that would regard you as the authoritative spokesperson for the tax commission—?

Mr Matthews —I hope that they would—

Senator COOK —with a knowledge of the tax act who was in effect saying that political parties cannot make deductions?

Mr Matthews —Cannot make deductions?

Senator COOK —That political parties do not have to pay the GST?

Mr Matthews —As I say, I sought to clarify that they were not charities and—

Senator COOK —But that was not the question. The question that was put to you was, `Will they be able to undergo certain types of fundraising and not be paying a GST?' You answered about charities, not about political parties. And he said to you again:

So you are telling me that fundraising by political parties will be subject to the GST?

Mr Matthews —All of that, to my mind, is consistent with being uncertain on the topic and indicating that, particularly where I say specifically that I would need to check rather than misleading anybody and certainly not seeking to. If I am guilty of anything, it is of being guilty of not recalling that political parties were deductible gift recipient organisations and, therefore, qualified under some of the same provisions as charitable organisations.

Senator COOK —I can go through the legislation, but you have just acknowledged that—

Mr Matthews —Right from the start I indicated—and I indicated during the interview—that I was not sure of the ground and the position there and said that I would need to check.

Senator CONROY —I am not sure that is quite right.

Senator COOK —Earlier when I asked if were you satisfied that you had not made any mistakes in presenting the view of the government, you said you were satisfied.

Mr Matthews —I said I was satisfied that I had done my best not to make any mistakes.

Senator COOK —No, I asked you specifically.

Mr Matthews —And I think I said exactly that.

Senator COOK —It is on the Hansard. We will go back to the Hansard.

Mr Matthews —Indeed it is, Senator, and I think I recall it also.

Senator COOK —No, it is entirely too glib of you now, Mr Matthews.

Senator Kemp —No, it is not.

Senator COOK —Yes, it is.

Mr Matthews —I do not believe so, Senator.

Senator COOK —It is entirely too glib.

Senator Kemp —You may have that view, but the truth of the matter is that I do not think you are here to badger witnesses. If you have questions, Mr Matthews is perfectly happy to answer them. I do not want Mr Matthews or anyone else on this side of the table being attacked.

Senator COOK —I do not want anyone lying to me either.

Senator Kemp —Senator, after dinner you are not good. Let's face it. We have had experiences before on this matter. Mr Chairman, witnesses are not to be badgered by the likes of Senator Cook or anybody else.

ACTING CHAIR —Senator Cook, I think you will have to withdraw that comment.

Senator COOK —What comment?

ACTING CHAIR —That you do not like being lied to.

Senator COOK —I do not like being lied to. It is a matter of fact.

Senator Kemp —Frankly, Senator, we object to the implication of that. If you were referring to anything that was said on this side of the table, I think you should withdraw that remark.

ACTING CHAIR —You have to withdraw it, Senator Cook.

Senator COOK —I withdraw and substitute the words `I don't like being Peter Reithed to'.

ACTING CHAIR —So you withdraw unconditionally?

Senator COOK —I withdraw, Mr Chairman.

ACTING CHAIR —Thank you.

Senator COOK —Mr Matthews, after this interview did you go and check or was it drawn to your attention that your answer was wrong?

Mr Matthews —It was drawn to my attention the next day.

Senator COOK —By the Prime Minister?

Mr Matthews —No.

Senator COOK —He walked into it, didn't he?

Mr Matthews —What I understand happened was that the Prime Minister on the following day also did an interview with Neil Mitchell and he was played part of what I had said. However, he was not played the part where I said I would need to check. The playback of what I had said was cut short before that point. Then I believe a question was put along the lines of `What do you think of that?' I did not hear the interview with the Prime Minister, but I understand that is what happened.

Senator COOK —I think he got it right, or near enough to right, after he did a double take about the tax office's advice. What have you done to correct the record, Mr Matthews?

Mr Matthews —At this stage I believe that certainly the Prime Minister corrected the record. I have not read the transcript, but I believe he made some remarks. I also believe that there was a press release on this issue from the Assistant Treasurer, although I have not seen that. That is just my recollection.

Senator COOK —That is very interesting but I am asking you: what have you done to correct the record?

Mr Matthews —I prepared a statement for the media and our media unit fully outlining what I sought to do, which was to clarify that political parties were not charities. I set out the full position of the arrangements as they apply to political parties in full for distribution by our media unit as there were follow-ups.

Senator COOK —Have you spoken to Neil Mitchell or his producer about this?

Mr Matthews —No, I haven't.

Senator COOK —Why not?

Mr Matthews —I haven't yet seen the opportunity to do that. He took the matter up with the Prime Minister on the day after me.

Senator COOK —I know, but you are the one that said—if I am to follow your explanation—that you were going to check.

Mr Matthews —Correct.

Senator COOK —You are the one who now says that the information provided was wrong, and you have referred to the act and I agree that the information was wrong and the parts in the act that you referred to have been now referred to accurately, which establishes that the information you gave was wrong. And you were the one that said to Mr Mitchell that you would check.

Mr Matthews —Yes.

Senator COOK —Why haven't you been back to Mr Mitchell to correct the record with him?

Mr Matthews —He took it up before I got back to him. Before I had checked he took the matter up further in the media and he did not wait for me to get back to him with the checked information. It subsequently seemed that he had already followed through on the matter.

Senator COOK —Are you unable to distinguish between the Prime Minister's role and your role in this?

Mr Matthews —I am sorry, Senator. I don't follow the question.

Senator Kemp —I do not think that is an appropriate question, Senator. I think we have had a fair run on this.

Senator COOK —We have only just begun.

Senator Kemp —Senator, do what you like, but in that case I will make it clear that we don't expect witnesses to be badgered here. Mr Matthews has been carrying out his duties. If Senator Cook is unhappy with aspects he can raise those. Mr Matthews can respond, but I don't think Senator Cook has to badger Mr Matthews or anyone else in front of this committee.

Senator COOK —Let me put the question another way, Mr Matthews. You make a statement on high rating public affairs radio in Victoria as the voice of the Australian Taxation Office telling people what the case is under the GST. You add a tag to it that you will check. The Prime Minister comes along the next day as the head of government and the political figure and disagrees with what you have said. You feel no obligation on behalf of the tax office to actually correct what you said with the radio station, taking refuge behind the fact that the Prime Minister corrected it. Does that remove the obligation from the tax office to correct it?

Mr Matthews —As I said, Senator, I prepared a statement for our media unit. I was in Brisbane at the time, on the day following that interview, and I was chairing a meeting of retirement villages on the GST and, during the course of that meeting, I prepared a statement for our media unit to clarify that issue should it continue, so I believe I did follow through. Mr Mitchell, on the other hand, had played a truncated version of my interview with him on that day and, in one sense, taken the matter out of my hands. But I had taken action to make sure that our media unit had information that clarified the full and correct position under the GST law—which was only last Friday, I might add, Senator.

Senator CONROY —Did they issue the press statement?

Mr Matthews —I am sure they would have used it as media followed up with them.

Senator COOK —Are you sure that they've contacted Mr Mitchell?

Mr Matthews —No, I am not sure that they would have contacted Mr Mitchell. As I say, Mr Mitchell followed his own path towards seeking clarification of the issue. He didn't wait for me. He didn't even give me 24 hours to do that and, by the time that he had done, I had created a correct statement for our media unit. As I say, this was just last Friday when I was in Brisbane. The interview was last Thursday. I produced the statement during the course of other matters on the Friday and got that to our media unit, and here we are—Monday.

Senator CONROY —Is it on the web site?

Mr Matthews —On the web site?

Senator CONROY —Do you know if it is on the web site?

Mr Matthews —I don't believe it would be. I don't think so.

Senator COOK —It is of concern to me that—

Mr Matthews —There would be other material on our web site that does contain that information.

Senator COOK —It is of concern to me that you promised Mitchell to check and you have still not replied to him. Do you have any system for correcting mistakes that the tax office may make?

Mr Matthews —As I say, Senator, I did follow through with the statement with the correct information. To my mind—

Senator COOK —Not to the relevant authority.

Mr Matthews —Mr Mitchell had followed his own path to seek clarification. In the sense he had not—

Senator COOK —Did he speak for the tax office?

Mr Matthews —I beg your pardon?

Senator COOK —Does he speak for the tax office?

Mr Matthews —No, but he did not wait for me to get back to him before raising the matter again the next morning.

Senator COOK —Let me just see if I have got this right. You speak for the tax office, the Prime Minister speaks for the government and Mr Mitchell is a private radio commentator. The Prime Minister says one thing, Mr Mitchell says one thing and you say another thing—you do not feel compelled to correct your statement? None of them speak for the tax office.

Mr Matthews —Senator, as I have outlined, I have taken steps to ensure—

Senator COOK —Not to Mr Mitchell.

Mr Matthews —I have not yet had the opportunity to get back. Mr Mitchell seems to want us to do some fairly regular appearances on there and when I next get the opportunity to do that I will raise it with him. I will make sure on his radio station, as I have sought to do for any other outlets that required information from the tax office through our media unit, that I have prepared a statement outlining the full correct position. At this stage, two days after the event effectively, that is what I have managed to do so far.

Senator CONROY —The tax office are not paying for any appearances on any commercial radios are they—sort of like advertisements?

Mr Matthews —We do take out and pay clearly for radio time to get messages out through the radio networks. That is certainly not done in the case of my own involvement with the media.

Senator CONROY —I am just intrigued. Can you give any example of where someone has paid for the time to go on?

Mr Matthews —For my time?

Senator CONROY —No. An example of what you just said before the ATO.

Mr Matthews —Mr Taylor may be able to help me, but we make it quite clear that the radio is used as part of our information campaign throughout the country—

Senator CONROY —I do not mean adverts. I am talking about appearances by yourselves or Mr Jordan or anybody else. We are not in the cash for comments situation.

Mr Matthews —Certainly there is nothing that I do in the media that is paid time.

Senator COOK —As a matter of record, are you aware that the Labor Party voted against this proposal that you mistakenly reported to Mr Mitchell?

Mr Matthews —No, Senator, specifically against that particular proposal, no.

Senator SHERRY —Mr Matthews you seem to be blaming Mr Mitchell for not waiting until you got back to him—

Mr Matthews —I just observed that was a fact.

Senator SHERRY —Yes, but did you at any time request him to wait and hold off on the issue until you got back to him?

Mr Matthews —I said that I would need to check.

Senator SHERRY —But did you ask him to wait until you got back to him?

Mr Matthews —No, I did not.

Senator SHERRY —How can you infer that Mr Mitchell is responsible for the mess that you landed yourself into?

Mr Matthews —I do not infer that, Senator.

Senator SHERRY —You did; you named Mr Mitchell.

Mr Matthews —No, I do not, Senator.

Senator Kemp —I do not think that was the case, Senator. I think that Mr Matthews has expressed himself very clearly and I am not sure that we can add anything more to it. I think that Mr Matthews is a distinguished public servant carrying out his job and I think it is a great pity that he is being subjected to this sort of attack.

Senator SHERRY —If you put yourself in the firing line of a political issue you have to be responsible for what you say and the mistakes you make.

Senator Kemp —Senator, this has been very carefully gone through—

Senator CONROY —Why don't you go on the radio more, Senator Kemp?

Senator Kemp —This has been very carefully—

Senator CONROY —The 7.30 Report is available—

Senator Kemp —Yes, it is.

Senator CONROY —You can get your gig on the 7.30 Report.

Senator Kemp —I am happy to debate you any time, Senator.

Senator CONROY —You did not come to Benalla though.

Senator Kemp —I think probably with good reason, as it turned out. Mr Chairman, we have canvassed this issue extensively. Mr Matthews has responded appropriately to the questions which have been asked. It is not appropriate for Mr Matthews to be attacked in the way that, unfortunately, Senator Sherry has now joined in, in my view.

ACTING CHAIR (Senator Chapman) —Do we have any further questions, relevant issues?

Senator COOK —Has your office contacted Mr Mitchell's producer or Mr Mitchell today, Mr Matthews?

Mr Matthews —Not that I am aware of, Senator, no.

Senator COOK —Have you asked them to?

Mr Matthews —Not as yet, no.

Senator COOK —Do you intend to ask them to?

Mr Matthews —I will be following up with Mr Mitchell, yes. As I say, I did take action very promptly to ensure that our media unit was equipped with the correct position.

Senator CONROY —Did you instruct them to contact Mr Mitchell, given that you were following it up on behalf of Mr Mitchell?

Mr Matthews —Not at that juncture Senator, no. As I say, I was in the midst of other duties interstate. It was on Friday that I prepared this statement, the day after the interview.

Senator COOK —When you say you intend to correct it with Mr Mitchell, when do you intend to do that? Do you intend to do it tomorrow?

Senator Kemp —I think Mr Matthews has already responded to that question. There has been a clear response.

Senator COOK —I am not aware that he has, Minister, but if he has already responded to it then he can refer to his answer.

Senator Kemp —He has responded to that. I think we have been through this in quite some detail—

Senator COOK —Are you directing the officer not to answer this question?

Senator Kemp —As far as I am concerned the officer is more than entitled to say what he likes. I am not instructing the officer to do anything. I am just pointing out to the committee we have been over and over this point.

Senator COOK —I am not aware that he has answered this specific question.

Senator Kemp —Can we answer it one more time and then can we put it aside.

Mr Jones —Senator, Mr Matthews has done an awful lot of this sort of work. I think he tried to be clear about where he was and what the situation was. The statement produced by our media unit would normally be acted upon. We will check and see what it has done with that on Friday. Mr Matthews, I think, is clearly intending to speak to the person involved at the first available opportunity.

Senator COOK —That very much worries me, Mr Jones, because if the tax office think that they can go and mislead people—and I do not go the question of whether that is deliberate or inadvertent—and then wait for the next available opportunity to correct the record, then they are happy to leave a misleading out there for as long as it takes them to go and correct the record.

Senator Kemp —Senator,—

Senator COOK —That is not acceptable conduct—

Senator Kemp —It is. Mr Matthews—

Senator COOK —Excuse me, Minister, I am talking to Mr Jones.

Senator Kemp —Would you kindly hurry up and then I will respond.

Senator COOK —That is not acceptable conduct for a parliamentarian in misleading the parliament in which the obligation is to immediately correct the record at the earliest opportunity, and fulsomely. And I put it to the tax office that it is not acceptable conduct for the tax office to leave a misleading explicitly unanswered in the area in which the misleading occurred. It should be answered quickly and thoroughly. On this occasion it has not been and there is no apparent intention to do so until whenever it might be that Mr Matthews might again appear on this program. Now, that is unacceptable.

Senator Kemp —Senator, you are running a political campaign. The tax office is trying to bring in a new tax system. It is your—

Senator COOK —What has that got to do with misleading the public?

Senator Kemp —It is your task, as you see it—I think it is most unfortunate—to attempt to attack people who go out and seek to quite properly implement this system.

Senator COOK —Do you think he told the truth, Minister?

Senator Kemp —The explanation has been given to this committee very clearly. The question has been asked three or four times. This is most unsavoury, in my view. What we are seeing now from Senator Cook and from Senator Conroy is relentless attacks on public servants, and it does this Senate no credit nor does it do any credit to the individuals.

Mr Matthews —If I may make a concluding statement. You started off—

Senator COOK —Let me just reply to the minister first, Mr Matthews.

Mr Matthews —Senator, you have accused me of misleading the public. I would like to record that I take great offence and exception to that. I did not set out—

Senator COOK —As a matter of fact, Mr Matthews—

ACTING CHAIR —Order!

Mr Matthews —I did not set out to mislead. You said at the start of this—you asked me how many media appearances; you recorded that I had been quite extensively in the media. I have done so with the intent of providing accurate information to the public. In this instance it would appear that—and I did say I was uncertain—I got something wrong. For that I apologise, but at no stage did I set out to mislead the public and I do take exception to your comment that I did.

Senator COOK —You may very well take exception but I put it to you, Mr Matthews, that you have not corrected the record with this station.

Mr Matthews —I took steps immediately to ensure that the record was—

Senator COOK —You have not corrected—are you intent on talking over me?

Mr Matthews —the correct information was provided through our media unit.

Senator COOK —But you cannot tell us that it has been provided to this radio station or to the particular talkback host in this radio station, and you cannot tell us that at this stage the place where you made the misleading has received the information that, in fact, it was wrong. That is the point.

Mr Matthews —It is now the second working day since that interview, Senator. I will follow up with them as soon as I can.

Senator COOK —That is a different answer to what you gave me before, Mr Matthews, in which you said you would follow up next time you appeared on the station.

Mr Matthews —I did.

Senator COOK —You did say that?

Mr Matthews —I did.

Senator COOK —And now you are saying `as soon as you can' which I take to be start of business tomorrow?

Mr Matthews —I will follow up. It may be—I am checking to see whether our media unit may, in fact, have already followed through on that with the statement that I prepared, but I will take that on board.

Senator COOK —Do you recall appearing on the commentator Alan Jones's program on 2UE in Sydney on 7 March 2000?

Mr Matthews —Not directly, but I certainly had probably two or three interviews on 2UE with Alan Jones.

Senator COOK —And one would have been on or around 7 March.

Mr Matthews —It could well have been. If you have the record of it, then I assume it was.

Senator COOK —I have a record of a transcript taken of a radio interview of you appearing with Mr Alan Jones on radio 2UE on 7 March this year. Can you recall that in that interview with Mr Jones you were questioned about the GST and stamp duty? Can you recall that?

Mr Matthews —I am not sure that I can. I believe there was a range of questions that Alan Jones wanted to know about fire levies and stamp duties and those sorts of things in some of those interviews, but I do not directly recall the issue.

Senator COOK —But you would agree that this sort of subject was covered.

Mr Matthews —I am sure that if you have the transcript there then—

Senator COOK —I have a transcript in which—

Mr Matthews —Fine. Then I am sure it was covered if you have got the transcript.

Senator COOK —I have a transcript, but I am asking you, independently of what I might have, what your recollection is.

Mr Matthews —Not very much of it.

Senator COOK —I have a transcript which records you as saying, when referring to stamp duties and the GST, that in the insurance area stamp duty will not go on top of the GST.

Mr Matthews —If that is in the transcript, then I assume it is accurate.

Senator COOK —It is in the transcript, let me assure you. I am quite happy to provide you with a copy of the transcript if there is any question about it. That answer is not true though, is it?

Mr Matthews —I think it is. I am just going to take some counsel from my legal expert here. Mr Quigley understands the GST law. I want to check the position on that before I say anything. I am told that the GST does not apply to stamp duty. Is that what I said in the transcript?

Senator COOK —You said that in the insurance area stamp duty will not go on top of the GST.

Mr Matthews —I understand that it would be up to the states to decide that matter.

Senator COOK —And what do the states do?

Mr Matthews —I am not sure that the position is clear in all of the states as yet.

Senator COOK —The stamp duty goes on the GST.

Mr Matthews —I think what I may have understood Mr Jones to be asking was whether the GST applied to the stamp duty itself. I think that was the question I thought I heard and to which I responded.

Senator COOK —Let me give you the full quote:

You know, and whether they adjust there their stamp duties in this area, so certainly the government has ensured in the insurance area that the stamp duty won't go on top of the GST.

The stamp duty does go on top of the GST in the states, doesn't it?

Mr Matthews —If they have now settled that position.

Senator COOK —Are you looking for confirmation from Mr Quigley?

Mr Matthews —My understanding is that certainly some if not all the states have indicated that they will be imposing—

Senator CONROY —Are you aware of any that are not?

Mr Quigley —I am not aware of all that are, and I am not aware of any that are not.

Mr Matthews —What was the position at that date—it was 7 March, wasn't it

Senator COOK —Yes.

Mr Matthews —I am not sure what the position might have been at that stage.

Senator COOK —It was clear then.

Mr Matthews —Was it clear?

Senator CONROY —Absolutely.

Senator COOK —This is a matter of some public debate politically, as well as of community interest, and a widely reported matter. How would it be if you, the professional face of the tax office, giving advice on public radio as to what the facts are, were not aware of that?

Mr Matthews —If I made a mistake there, I made a mistake on it, but it would certainly not have been deliberate. I thought I was responding to a question around the stamp duty and I thought I was responding to the best of my knowledge at that time. If I misread the question, then the transcript would show that.

Mr Quigley —In Mr Matthews' defence, the insurance area is a very complex area. The industry itself is obviously complex and the different arrangements are complex. I would suggest that it would not be all that difficult to make an honest mistake like that to get confused whether the GST goes on stamp duty or stamp duty goes on GST.

Senator COOK —I am not sure if that is a plea in mitigation, Mr Quigley. I do not think Mr Matthews would have thanked you for that explanation.

Mr Matthews —On the contrary.

Senator COOK —But you are the tax office talking to the public about a matter of tax policy or tax law. If you are misleading them—the second time—if it is a matter of complexity then surely you would say, `It is a matter of complexity, I need to check.' You did not say that, you gave the answer.

Mr Matthews —I clearly thought I knew the answer to the question that was being asked.

Senator COOK —Will you correct the record now for Mr Jones as well?

Mr Matthews —Yes, I can certainly do that.

Senator ROBERT RAY —While we are on following up and correcting records, or evidence that was not exactly fulsome, maybe Mr Taylor could also assist you because he answered some of the questions this morning. I note he is not in the room but I know he is about, so that might help.

Mr Matthews —I am happy in his absence to—

Senator ROBERT RAY —I just thought you might both like to address it. We raised earlier in the day the direct mail-out by the tax office. I asked very specific questions of whether there would be a personalised letter in that mail-out. Have you got any fresh news for us on that, because you and Mr Carmody—especially Mr Carmody—said there were decisions pending.

Mr Matthews —I understand that there has been, since that earlier part in the day, some announcements in the media around that mail-out.

Senator ROBERT RAY —You did not give us quite that impression today that it would be resolved so quickly. This must have been a long way down the track for a public announcement on it to be made this evening.

Mr Matthews —It was made clear this morning that it was not the tax office's prerogative to be announcing those matters.

Senator ROBERT RAY —That was not the evidence given this morning at all, because I may have accepted that evidence. You said the matter was not finalised or near finalisation. That was the evidence this morning. Are you saying you did not know that it was being contemplated that the PM was going to put a personal missive in this material that was going out?

Mr Matthews —I am not sure that I answered personally any questions on that matter this morning. I think you addressed most of those to the commissioner, who was responding to them.

Senator ROBERT RAY —Yes, I am asking you now: was it within your knowledge this morning that that was the case, that either you or Mr Taylor have been involved in these issues?

Mr Matthews —We certainly knew the planning and some of the options that were on the table, but the confirmation has come through since we spoke this morning.

Senator ROBERT RAY —You are still not willing to say or identify where that suggestion came from.

Mr Matthews —I think our previous answers would stand to that question.

Senator ROBERT RAY —Do you?

Mr Matthews —Yes.

Senator ROBERT RAY —The Prime Minister explains in his comments tonight that tax commissioners do not propose changes to tax systems—governments do. You are not really suggesting to me that it was the tax office's idea to send out a personalised direct mail letter to every voter in the country?

Mr Matthews —I think our response was that it came from the iterative process involved in—

Senator ROBERT RAY —At the start of every iterative process, there has to be a start, no matter how Hegelian or whatever else you like to be in the way you approach these things. There has to be a starting point. Someone had to suggest it. What I want to know is whether it was initiated out of the tax office or did it come from the Prime Minister's office or the Ministerial Council on Government Communication or from staffers?

Senator Kemp —I think we have been over this. You have asked the question a number of times. I am not sure that—

Senator ROBERT RAY —I have been basically misled this morning—not in a full sense, but conned.

Senator Kemp —That is not the case.

Senator ROBERT RAY —You had the information this morning; you basically knew what the rumpus was and you would not fess up.

Senator Kemp —It is quite clear from what the Prime Minister said tonight. He has now made a statement and that deals with the matter, but it was not up to the tax office or anyone else here to make that statement.

Senator ROBERT RAY —There is a consistent pattern out of the tax office not to give us full knowledge and suddenly—be it the chain ads, be it this—it is announced. You give us the impression, `Oh well, this hasn't been finalised,' hoping to get through today.

Senator Kemp —No, there are certain government processes which the tax office has to go through and the Prime Minister was perfectly entitled to make that statement this evening, which he did. We were not in a position to make that statement this morning.

Senator ROBERT RAY —I find it impossible to understand why officers at the table cannot tell us who suggested a $10 million direct mail campaign, using the Australian Electoral Commission's database where the suggestion came from? Is this a sort of Senator Alston thing that these things happen by osmosis?

Senator Kemp —No, it is not a Senator Alston thing. I think the question has been answered and I do not think—

Senator ROBERT RAY —No, it has not.

Senator Kemp —It has been answered in a way which the tax office feels it is appropriate to answer. This may not suit your purposes.

Senator ROBERT RAY —It doesn't.

Senator Kemp —It doesn't suit your purposes. Okay, we accept that, but the question has been answered.

Senator ROBERT RAY —If we want to know whether the information campaign is being run by an independent office just to provide information to, as the commissioner says, `Deal with a complex tax system and the biggest changes' we had all that this morning. I want to know and I want to be satisfied that there is not political manipulation and input into some of these processes. The most blatantly political thing done is a direct mail-out with the Prime Minister's message because if he wants to send a message to all Australians he can get a copy of the electronic roll himself—he is entitled to under the Electoral Act—and he is entitled to send it out.

The $10 million question is that he does not want to pay for it himself, he does not want to bill the Liberal Party for it, he wants to use the tax office. What I want to know is: on whose suggestion was the $10 million mail-out made? It must have a starting point. Even though you have belted it backwards and forwards, it must have a starting point.

Senator Kemp —This question has been posed three or four times, it has been answered three or four times—

Senator ROBERT RAY —It has not been answered at all; I am still waiting for an answer.

Senator Kemp —If it has not been answered in a way that you are happy with, well that is just tough, but it has been answered in a way in which the tax office is prepared to answer it. Having given that answer, I think we should now move on.

Senator ROBERT RAY —No, I do not think we have been given an honest answer, Minister. I believe there is knowledge at the table about where this suggestion came from. And what you are doing to protect yourselves—that is you—is covering up on it. You are not telling us where the idea came from and you must know. People do not snap out of the middle of the air a $10 million direct mail campaign, it comes from somewhere. I am asserting, in the absence of proper evidence here, that the suspects must be the political wing and not the tax office.

Senator Kemp —Senator, you are making a political statement, so can I make a political statement? What we have seen here tonight is a political attack on the tax office by the Labor Party, which refuses to accept that a new tax system has been brought in. We have seen personal attacks on officers around the table and this political attack—

Senator COOK —There have been no personal attacks on officers at all.

Senator Kemp —Just shut up for a minute, Senator Cook! You just keep quiet!

Senator COOK —Are you tired, Minister?

Senator Kemp —Not quite as tired and emotional as you have been in the past, Senator, let me assure you. Can I make the point—I am going to finish my statement.

Senator COOK —For the record, I just want to say that there has been no attack on any officer.

ACTING CHAIR —Senator Cook! Order!

Senator COOK —There has been no attack on any officer of the tax office. There has been a quite right examination of an officer of the tax office who misled the public—

Senator ROBERT RAY —Twice.

Senator COOK —and who, as far as that radio station is concerned, has not yet corrected the record.

Senator Kemp —I am going to make my statement, seeing that Peter Cook and Robert Ray have made their statements. Let me make it clear: what we have seen is a political attack on the tax office which is an attempt by the Labor Party in 101 directions to derail the implementation of this new tax system. They have indicated they will not repeal this tax system, so it is an exercise also in utter hypocrisy. Senator Cook, I think the Hansard record will show that you indulged in a vicious attack on an officer of the tax office here.

Senator COOK —What rubbish!

Senator Kemp —The Hansard will show this.

Senator COOK —I have an obligation on behalf of the parliament to examine this department, Minister.

Senator Kemp —The Hansard will show your behaviour.

Senator COOK —If you do not want me to examine the department, I am sorry. If it is inconvenient to you, I will, because I do not have an obligation to you, I have an obligation to the parliament. That is what the obligation of this committee is. You can bluster and rave and carry on as much as you like, but we are going to press on.

Senator Kemp —Press on, Senator. You are entitled to press on, but I am entitled to respond. I think we have a statement here. I understand that the ATO media unit tried on Thursday—

Senator ROBERT RAY —Sorry, Senator Kemp, we did not hear what you said there when you used the acronym. Could you just slow down a bit.

Senator Kemp —This is in relation to whether an attempt was made to contact the Mitchell show. The ATO media unit tried once on Thursday and once on Friday to contact Clarke Forbes, the producer of the Neil Mitchell show. She left messages each time and he has not rung her back. So an attempt was made to contact the Mitchell show.

Senator COOK —What was the message that was left?

Senator Kemp —`The purpose of the calls was to clarify the issue and to ask why they did not play the'—I cannot actually read it. It is not clear to me.

Mr Matthews —I am advised that the purpose of the calls from our media unit to the Neil Mitchell show was to clarify the issue and to ask why they did not play my clarifications.

Senator COOK —Not to correct it, Mr Matthews, but to clarify it.

CHAIR —Let the officer finish, Senator Cook.

Mr Matthews —If you wish to say that. I had in the interview indicated uncertainty. If you wish to say `correct', then I will accept your word to correct it. But the clear message is that the office and myself took immediate action to follow through on that uncertainty and to clarify the issue with the radio station in question. I just wanted to get that on the record.

Senator ROBERT RAY —Mr Chairman, I was pursuing a line of inquiry. I do not think it was attacking tax officers at all. Let me continue that line of inquiry. Does anyone represent the tax office when the Ministerial Council on Government Communications meets?

Mr C. Taylor —Yes, I do, Senator.

Senator ROBERT RAY —Was this issue discussed at that level—that is, direct mail?

Mr C. Taylor —Yes, it has been discussed at that forum on several occasions. But to take your point from before, the Ministerial Council on Government Communications has been meeting on the very regular basis of every second day at times and sometimes for five or six hours at a time.

Senator CONROY —The panic is setting in.

Mr C. Taylor —It has been in a workshop environment. It has not been in a committee as such in terms of two sides of the table in alternative views. It has been a workshop situation around a whole host of things including this. I am saying to you honestly now that I do not recall the particular source where this initiative first emanated.

Senator ROBERT RAY —Thank you. That is a lot clearer than anything anyone else has given me. Thank you for that answer. When you say the ministerial committee has been workshopping, does that mean that it has not necessarily had the normal personnel attending? There are three permanent ones: Mr Georgio, Mr Nutt and Minister Ellison? Is it meeting without them when it meets for these four, five or six hours at a time?

Mr C. Taylor —No, they are there, but there are officers from the tax office there. At various times there are people from the advertising agency or the research company.

Senator ROBERT RAY —I am trying to establish what the status is. Is it meeting as a ministerial council with the three voting members plus a representative of the Treasurer's staff present? Or is it working at a subset down—where maybe the minister, the staffer and the backbencher are not there at all times and you work more at a workshop level than at a ministerial council level?

Mr C. Taylor —No, it is the former situation. Those members are present at those meetings.

Senator ROBERT RAY —Are they examining the ads as they come in, as well as all the research?

Mr C. Taylor —Yes.

Senator ROBERT RAY —I do not want to put words in your mouth, but was it at this forum that the direct-mail letter was discussed?

Mr C. Taylor —Yes. That is my recollection. I do not recall the exact point in time or the person or persons who suggested it. I recollect that the idea of a mail-out emanated from that process, but I cannot honestly give you an account of who the idea came from or at what time. All I can say to you categorically is that the initiative or the idea of sending out to the community—

Senator ROBERT RAY —No, let's get the terminology accurate. You are posting to enrolled voters, not to the community, because you are using a particular database. The idea is that you are posting to enrolled voters. That is right. I am not being unfair there, am I?

Mr C. Taylor —We are using the electoral roll.

Senator ROBERT RAY —You are not actually going to non-enrollees, are you?

Mr C. Taylor —No.

Senator ROBERT RAY —So the term I think I am entitled to use is `to enrolled voters', because that is the database. You are not trying to get to every Australian like you might through a householder delivery; it is to enrolled voters. That is why I thought it might have reminded you of who had this idea. From our political experience, we know the effectiveness of direct mail. We do not try to argue against it. We know that on that ministerial council there are one or two practitioners of that art who probably have the same skills as me—maybe better, but I doubt it. That is why I cannot conceive why the tax office would have thought of this idea. I am trying to seek whether it comes from outside. If it comes from outside, we have to ask questions to at least establish whether there is a political tinge to this.

Mr C. Taylor —I understand that, but I stand by my answer.

Senator ROBERT RAY —I cannot challenge your recollection—your recollection is your recollection—but which other tax officers or officials may have been there?

Mr C. Taylor —A couple of members of my staff. Do you want names?

Senator ROBERT RAY —No. I promise you that I did not want to return to this subject, but that announcement made me do so. Could I also ask you, because I have had to ask other public servants this: do you keep diary notes or file notes of these meetings?

Mr C. Taylor —No, I do not.

Senator ROBERT RAY —Why is that? Most public servants do.

Mr C. Taylor —I rely on the Government Communications Unit to record the decisions, et cetera, of these meetings.

Senator ROBERT RAY —I understand the decisions—they would have responsibility—but they do not keep minutes, do they? We have had previous evidence to that effect. They do not keep minutes of these meetings; they just record decisions. That is correct, isn't it?

Mr C. Taylor —That is my understanding.

Senator ROBERT RAY —We have seen the Auditor-General just in recent weeks bring down a report on a completely disparate subject—MRIs. One of the comments he made in that report is that he is constantly trying to get public officials and public servants to keep notations of meetings, because memory fails, especially if they are in pressure jobs. I am just wondering why it did not apply in this case. Is that your normal modus operandi?

Mr C. Taylor —No, it is not my normal modus operandi. As I said, the discussion goes backwards and forwards, and I rely on the decisions to be recorded by the members of the Government Communications Unit, and I liaise with them on a constant basis.

Senator COOK —Just before I conclude, I have heard the explanation that has been read by the minister. I just note that you were not aware of that at the time you answered my questions, Mr Matthews. Secondly, can we have a copy of the press release that the tax office has that was prepared and then sent out?

Mr Matthews —I will get a copy of that statement that we prepared. I believe it was sent out. It was not a press release as such, but a statement of the factual correct position.

Senator COOK —Was it communicated?

Mr Matthews —I believe that that would have been the substance on which our media unit was basing it. I certainly discussed the statement with the media unit. If there were media responses, they would have used that to clarify the position with any subsequent media follow-ups.

Senator COOK —This is the point that I am wanting just to be a little particular on. This was prepared by the media unit and you are going to provide it to us?

Mr Matthews —No, it was not prepared by the media unit. I organised for the statement to be prepared in our legislative unit.

Senator COOK —But it was given to the media unit.

Mr Matthews —Yes.

Senator COOK —And it was given so that, if there were inquiries to the media unit, they could refer to it.

Mr Matthews —Yes. And our media unit was—

Senator COOK —Did you say `yes' to that question? It was given to the media unit and if there were inquiries they could then refer to it?

Mr Matthews —Yes, and they also sought to follow up with Neil Mitchell.

Senator CONROY —But you did not instruct them to do that?

Mr Matthews —I did not instruct them to do that—

Senator COOK —In the light of this later advice you are now confident to say this.

Mr Matthews —I am sorry?

Senator COOK —You were not saying that to us before because I asked you if they had contacted Neil Mitchell and you were not sure.

Mr Matthews —I was not sure. I did mention that we were seeking clarification as to whether they had. They have now come back with that information that indeed they did seek to follow through with Neil Mitchell.

Senator COOK —But it was not a press release; it was what you might call a defensive brief.

Mr Matthews —It was simply a statement of the factual position, of which I will get a copy to you, on the position with political parties and it is as simple as that.

Senator Kemp —Mr Chairman, we have been going for almost two hours. I wonder whether we could have a five-minute break for some coffee or—

Senator COOK —I do not think so, Mr Chairman. I think we should continue.

Senator Kemp —Well, you would.

Senator COOK —We did offer to the government that we would come back at 7.30 and the minister declined the offer. We could have had half an hour longer.

Senator Kemp —What are you talking about?

Senator COOK —Before dinner we offered—

Senator Kemp —The committee put the view that it wanted to come back at eight and I said I am more than happy to come back at eight.

Senator COOK —No, we offered you 7.30.

Senator Kemp —I said I will come back at half past eight if you want me to. This is just pathetic. I think the normal courtesies require us to have a brief break.

ACTING CHAIR —Yes, I think after two hours, we should have a five-minute break.

Senator COOK —Will the minister be available for the rollover on Friday?

Senator Kemp —A rollover, Senator—

Senator COOK —You keep wanting breaks and you—

Senator Kemp —I keep wanting breaks—Senator, I am available on Wednesday night. I am very happy to sit here all Wednesday night.

Senator SHERRY —Could I finish? I have got some more questions—

ACTING CHAIR —We will have a break. We are not breaking from the issue.

Proceedings suspended from 9.53 p.m. to 10.00 p.m.

CHAIR —We will now resume. Are there any further questions? Senator Sherry.

Senator SHERRY —Mr Matthews, you said earlier that you would provide transcripts that you had seen of yourself. We do not believe that is sufficient. What I would ask you, please, is to provide us with a copy of every transcript held by yourself or other officers who made media appearances and explained the GST and related issues. I am sure they are available through the ATO media office or are obtainable by the ATO media office. Are you able to do that please?

Senator Kemp —Senator, we will take that question on notice.

Senator CONROY —Mr Matthews has already agreed.

Senator Kemp —Okay. It is entirely up to Mr Matthews, but I just—

Senator CONROY —They are an independent authority.

Senator Kemp —Indeed they are, and you did not need to remind me of that, Senator. They are an independent authority.

Senator SHERRY —Mr Matthews?

Mr Matthews —The practicalities of that task would be enormous given the range over the last two years of interviews of various ATO officers around the country. There would be literally thousands of interviews.

Senator SHERRY —I am talking about public media appearances—radio and TV.

Mr Matthews —And so am I, Senator.

Senator SHERRY —Okay. We start with you—are you able to do that?

Mr Matthews —And do you want seminars as well?

Senator SHERRY —No, I am not talking about seminars. I am talking about public media appearances.

Mr Matthews —I have already undertaken, where I personally am involved, to draw from our media unit whatever transcripts we have on record.

Senator SHERRY —In respect of yourself—all of them?

Mr Matthews —Yes.

Senator SHERRY —It is a little broader than that. There may be some transcripts that the media unit does not have—but it can obtain through its massive resources—of media appearances by you. The request goes to media appearances, not to seminars. That is understood?

Mr Matthews —I understand.

Senator Kemp —Senator, we have—

Senator CONROY —The Daily Telegraph one could be an interesting media appearance-seminar all in one.

Mr Matthews —Sorry, Senator, I don't—

Senator CONROY —The Daily Telegraph one—that was probably a media appearance-seminar combined.

Mr Matthews —The Daily Telegraph one. You would have to remind me, Senator.

Senator CONROY —I understand you were—

Mr Matthews —Last Monday, okay. I probably was.

Senator SHERRY —And the request also goes to any other tax officer who has spoken in the media on these issues.

Mr Matthews —I am saying that any other officer talking on radio over the last whatever period you put around it would literally amount to thousands of interviews. We have officers out talking on regional radio trying to explain the tax system, answering talkback questions—

Senator SHERRY —If the transcripts are available, please obtain them. I do not believe that is an impossible ask or a difficult ask because surely you must realise, Mr Matthews, you have made two mistakes. We believe you have made some other mistakes, and we would like to verify that. Time does not allow us. We have been, I think, fair and reasonable to you. We believe there are some other mistakes you made. It seems to us in the public interest, if there are mistakes like this being made, then they need to be checked by us and they need to be corrected. I do not think that is an unreasonable approach to take on this matter.

Senator Kemp —All right, Senator, you have made your point.

Senator SHERRY —You will do that for us, Mr Matthews?

Senator Kemp —I think Mr Matthews has responded that—

Senator SHERRY —In the positive?

Senator Kemp —I think you will find that there was a qualification to what Mr Matthews said.

Senator CONROY —Carmody, top four and whatever.

Senator SHERRY —Mr Matthews?

Mr Matthews —I said I will do my best in respect of my own appearances to—

Senator MURPHY —But surely your media unit would have transcripts of all your media appearances where the tax office has received a request for you or other senior tax officers to make media appearances to explain matters related to the GST?

Mr Matthews —I do not believe that the media unit obtains transcripts as a matter of course on every media interview, and it certainly does not where those interviews are conducted on regional or rural radio stations.

Senator SHERRY —If they are currently in the media unit or they are obtainable by the media unit, I do not believe that is an unreasonable request in the context of this issue and the errors—at least two—that have been discussed tonight.

Mr Matthews —I will take the matter up with our media unit and do our best in terms of the practicalities.

Senator SHERRY —We will see what you provide. One last thing: do you have any role in verifying the accuracy of the GST advertisements that are produced for radio, TV or newspapers?

Mr Matthews —I have some role, but the technical clearance on the elements of those are generally performed by part of our technical legislative group.

Senator SHERRY —What does `some role' mean?

Mr Matthews —I am responsible for those units. I do not directly clear the material.

Senator SHERRY —Let us leave the technical clearance aside. Do you sight some or all of those advertisements before they go to publication or to air?

Mr Matthews —Most of them, yes.

Senator SHERRY —We have already uncovered major errors that you have made in the media on vital tax issues. Are you confident that you have not missed any other errors in the material that has come to your attention?

Mr Matthews —In my previous response just a moment ago, I made it clear that the technical legal clearance of those advertisements is not something that I tend to get involved in. That is done by our legislative experts, as is the case with all of our publications and so on.

Senator SHERRY —You have just admitted to me that you do view most but not all of the advertisements that are placed, and you have made two major errors in the media to date. How can we have confidence in the accuracy of these advertisements? How can we have confidence in this campaign? Put aside all the other issues of money, Mr Howard's personal signature and all of those issues, how can we have confidence in this campaign, with you sighting these advertisements, when you have to date made two major errors in your media appearances?

Mr Matthews —In response to your question that the technical clearance of our publications, our advertisements and other materials, I have already said that, while I am responsible for the people who do it, it is done by our legislative experts, including Mr Quigley, Senior Assistant Deputy Commissioner of GST Legislation Interpretation, his team and others. Those are the people who are the experts in the legislative law and who clear all of the publications and advertisements from a technical legal point of view.

Senator SHERRY —But you still see the production?

Mr Matthews —I see many of the publications as they go through, but the technical clearance for legal accuracy is done by our expert legislative team. I do not think I can be any more clear than that.

Senator SHERRY —I understand that, but you have already made two mistakes to date. We believe there are others. I am concerned that you, having made those mistakes, are one who sees these advertisements and the material that is produced.

Mr Matthews —I think I have made it very clear several times as to the technical and legal accuracy and the process for clearing those. Out of the thousands of publications that have been put forward, all of them go through that process.

Senator CONROY —When I asked whether the tax office paid for you to make the appearance on the Neil Mitchell program, you said no, but you indicated that there were some paid appearances.

Mr Matthews —Not mine.

Senator CONROY —No, I accept that. I was wondering whether you could give me an outline of what they are.

Mr Matthews —Mr Taylor might be able to outline the detail of the campaign as it has been conducted in radio.

Senator CONROY —I am not talking about the ads.

Mr C. Taylor —No, that is right. I understand the question.

Senator CONROY —Hopefully I have made myself clear.

Mr C. Taylor —First, let me clarify this bit just in case. No taxation officer is paid by any organisation to appear on any media outlet. There has been a series of three two-hour slots with a company called Radio Wise, which has been syndicated to about 50 commercial radio stations across the country. Taxation officers have appeared in a panel format, if you like. I would liken it to a seminar of sorts. That is intended again to provide information and also to take calls, et cetera . I think there have been two so far and a third one is planned.

Senator CONROY —What is the going rate for buying two hours of commercial radio?

Mr C. Taylor —I have not got that information, but I would be happy to take it on notice.

Senator CONROY —And are you saying that has been taken up by 50 commercial radio stations?

Mr C. Taylor —Yes, the first one was to about 44 or 45 stations. It expanded because it was seen as such a widely popular and well responded to `seminar'.

Senator CONROY —Who guest appeared?

Mr Quigley —I participated in the first one, Senator.

Senator CONROY —Who else?

Mr Quigley —Su McCluskey was the other person. There were also cameo interviews with members of the public prerecorded. When I say `cameo', we just asked so and so what their views were to try to bring out some of the issues.

Senator CONROY —Sorry, could I just go back, Mr Quigley. You conducted interviews?

Mr Quigley —No, I did not.

Senator CONROY —Sorry, the tax office conducted interviews on the street?

Mr Quigley —No, as part of the program, which ran, as Mr Taylor said, for some two hours, there were a number of prerecorded sessions. As part of those prerecorded sessions, the interviewer interviewed some members of the public and representatives of industry groups and professional groups to try to draw out what their particular problems were so that, in response, as part of the prerecorded part of the session—

Senator CONROY —The prerecord was `What is your problem' and that would be played over the air to you and you would then give the answer?

Mr Quigley —That is correct. We would respond to the particular thing.

Senator CONROY —How was that introduced? Was it: `This person had phoned in' or `This person has raised this question?' How was it described to the listener?

Mr Quigley —There were not people phoning in as that part of the program. That part of the program was the interviewer approaching key people in industry representing industry groups and saying, for instance, `What are the issues in the charitable sector?' They would be talking to somebody who is recognised in the charitable sector and other sectors: the property sector, building and construction, the farming sector—a whole host of different things. They were saying, `These are the sorts of issues that we are concerned about.' We tried to then respond to those. That included a number of people. As a final thing there was a phone-in where members of the public phoned in with whatever questions they had and we responded to them. Whilst I was not part of the second session, I understand it was a very similar format.

Senator CONROY —I will come to the second one in a tick. Did the tax office pay any of the people in those cameo appearances? Were they all real people or were some of them actors?

Mr Quigley —No, certainly none of them were actors. The tax office did not pay for any of them. Mr Taylor may know.

Senator CONROY —Mr Taylor?

Mr C. Taylor —As far as I am aware they were not but, again, I would be happy to find out and get back to you.

Senator CONROY —You will take that on notice? The phone-ins, they were all legitimate phone-ins?

Mr Quigley —Yes.

Senator CONROY —There were no tax office individuals involved in the phone-ins? I know the Liberal Party has been engaged in trying to stack talkback radio. I am just hoping the tax office is conducting its own talkback radio.

Mr Quigley —The lines were open and we could view the calls that were getting through. It was just an amazing number of calls.

Senator CONROY —I am sure it was. Is it possible to get a copy?

Mr Quigley —A copy of what?

Senator CONROY —For the committee to get a copy of the transcript of this two-hour format? I do not know if it is a videotape. I guess it is not.

Mr C. Taylor —No.

Senator CONROY —An audiotape of it?

Mr C. Taylor —I am sure we can and I will do my best.

Senator CONROY —Both of them?

Mr C. Taylor —Both of them.

Senator CONROY —Who appeared in the second one?

Mr Quigley —That one was Su McCluskey again. Sue Weston and I think Chris Jordan also participated in that one.

Senator CONROY —Chris Jordan. I was going to come to Mr Jordan. He is an expert on taking talkback, you know. He is very accurate in his description of facts too. Has a third one been taped yet?

Mr C. Taylor —Not to my knowledge.

Mr Quigley —If it has, Senator, I—

Senator CONROY —You have missed out. Mr Quigley, I think there is a message there.

Mr Quigley —I had other commitments at the time.

Senator CONROY —Who is intended to be in the third one?

Mr C. Taylor —I would have to get back to you on that one, Senator. I am sorry I have not got that detail.

Senator CONROY —No decision? The Prime Minister will not announce in the next hour—

Mr C. Taylor —No.

Senator CONROY —Was it the same format?

Mr C. Taylor —My understanding is yes.

Senator CONROY —Prerecord, cameos and then the phone-in. How long does the phone-in component last?

Mr Quigley —I could not tell you off the top, but it was quite a considerable amount of time. Then after that I should have mentioned that there was for another hour what they call a chat line where we responded to questions through the Internet as well.

Senator CONROY —You do not know when the third one is scheduled?

Mr C. Taylor —No, I don't. I am pretty sure it is soon but—

Senator CONROY —I am pretty sure it is soon.

Mr C. Taylor —I have not got that detail at the moment.

Senator CONROY —I was just wondering while I was on the question of paid advertisements—this is jumping fractionally—if I could ask a question about Mr Jordan's appearances. Have any of Mr Jordan's appearances been paid for? I guess I am asking for the start-up officers to come to the table temporarily.

ACTING CHAIR —Is this a tax office issue?

Senator CONROY —I did not want to let the tax office go just yet. Has Mr Jordan been engaged in any paid appearances, other than the one that has been mentioned?

Dr Hagan —I am aware that he has made some appearances but any of the arrangements for that have been made through the ATO.

Senator CONROY —Can you tell me from which funding component the payment of these commercial spots has been made?

Mr C. Taylor —Out of the GST component. Buckets we called them before—one of those four.

Senator CONROY —Buckets, yes.

Mr C. Taylor —We talked about GST, PAYG, ABN et cetera.

Senator FAULKNER —Which in particular?

Mr C. Taylor —The GST one.

Senator FAULKNER —Out of the $54 million?

Mr C. Taylor —Yes.

Senator FAULKNER —Have you been able to provide Senator Conroy with a disaggregated amount for this particular—

Mr C. Taylor —No, I have taken that on notice.

Senator FAULKNER —What do we call this particular program?

Mr C. Taylor —We refer to it as Radio Wise. I understand Radio Wise is a company that packages these sorts of programs. I have not been close to—

Senator FAULKNER —Are they engaged as consultants or engaged by the ATO?

Mr C. Taylor —My understanding is yes, but I have not been close to this initiative.

Senator FAULKNER —Someone must know if you engaged them.

Mr C. Taylor —I am sure they do, Senator.

Senator CONROY —I am sure they do too.

Senator FAULKNER —But directly engaged by the ATO or through an advertising agency?

Mr C. Taylor —No, we directly engaged them, Senator.

Senator FAULKNER —Who would have done that?

Mr C. Taylor —Members of my staff.

Senator FAULKNER —What sort of tender process was involved in engaging Radio Wise?

Mr C. Taylor —I will have to take that on notice. I am sorry, Senator, but I do not have that detail with me.

Senator CONROY —There is nobody here from your office?

Mr C. Taylor —There is nobody here from my office who could answer that.

Senator FAULKNER —Are these particular commercials authorised?

Mr C. Taylor —We do not see them as commercials. We view them as seminars making available ATO experts to provide details of the proposed measures.

Senator FAULKNER —Do the listeners know that the ATO is funding it?

Mr Quigley —There was a quite clear statement made to that effect at the end of the program.

Senator CONROY —Not at the beginning?

Mr Quigley —No, at the end.

Senator FAULKNER —And who made that statement?

Senator CONROY —Was it you or Ms McCluskey?

Mr Quigley —No, it was not. It was made by one of the interviewers. I am not sure what his technical title would be—but `producer' would be the closest title I could think of for the person that made that statement.

Senator COOK —Do you have a transcript of those programs?

Senator CONROY —They have said they would get them for us.

Senator COOK —Was any part of the transcript scripted?

Mr C. Taylor —My understanding is no, Senator, but I will get the transcript for you.

Mr Quigley —I could add a bit, given that I was part of it. There was a script we were given which gave a bit of an outline of the way it went. I must say from my experience that it did not go anything like that and it was basically up to the compere to—

Senator CONROY —Were you able to listen to the cameos before you sat down to make the production?

Mr Quigley —No, the prerecorded part was played to us and we responded.

Senator GEORGE CAMPBELL —Who are the principals?

Mr Quigley —I have no idea, Senator.

Mr C. Taylor —The only name I know is Paul Clitheroe. I do not know what his position is with that company and whether he was asked to front it, or whether he is a—

Senator CONROY —Was he the interviewer?

Mr Quigley —Yes, I want to clarify that a bit. My understanding is that Mr Clitheroe was only engaged by Radio Wise to be the interviewer.

Senator GEORGE CAMPBELL —Where is the company based?

Mr Quigley —On the North Shore of Sydney. I suppose Artarmon would be the address.

Senator COOK —Were there any ads during the course of this two-hour paid advertising by you?

Mr Quigley —I do not think so, Senator.

Senator COOK —Apart from what you were doing, it was an otherwise commercial-free period?

Mr Quigley —That is my recollection. It was a while ago. The transcripts will show that but I am not quite sure.

Senator COOK —Was the public reminded during the course of it that these were tax office officials speaking?

Mr Quigley —Absolutely.

Senator COOK —At regular intervals?

Mr Quigley —Yes.

Senator COOK —Was any part of this program authorised in case there was political comment involved?

Mr Quigley —There were no political comments involved and that will be very clear from the transcript. I am only speaking there on the first one, because it was the only one I participated in. I did not hear the second one. But in the first one certainly there was absolutely nothing political.

Senator COOK —Was there any authorisation on behalf of the tax office as to who took final responsibility for the accuracy of the comments in the program?

Mr Quigley —That would have rested with me and Su McCluskey, the two people that were actually—

Senator COOK —So, in terms of accuracy of comments, you and Ms McCluskey would be the ones that take responsibility?

Mr Quigley —Absolutely.

Senator FAULKNER —Can you provide the list of the 50 commercial stations please?

Mr C. Taylor —Yes, I will take that on notice. It is 50-odd; I have not got the list.

Senator FAULKNER —If you could provide the names of the stations, I would appreciate that.

Mr C. Taylor —Sure.

Senator FAULKNER —Is the cost disaggregated to a cost to each radio station—do we know that?—or is it just a package that is organised by Radio Wise?

Mr C. Taylor —I do not know. I will find out what the costs are and how far down, in terms of level, they go, and I will give you as much detail as I can on that.

Senator FAULKNER —But it is live, I gather?

Mr Quigley —No, there was a prerecorded part and then the calls from the public.

Senator FAULKNER —I understand that, thank you, Mr Quigley, but it is playing on the radio stations then at the same time, in the same two-hour time slot.

Mr Quigley —I am not sure of that.

Senator FAULKNER —There is a live component, or do you just record that?

Mr Quigley —No, there will have to be, sorry, of course.

Senator FAULKNER —Not necessarily, who would know what on earth was being organised. That is why I am asking. I would like to know.

Mr Quigley —I am not sure how they organise that.

Senator FAULKNER —Do you know when the first one went to air?

Mr Quigley —I think it was in March, but I could not give you an exact date. It will not be a problem getting that to you.

Senator FAULKNER —What about the other two-hour slots?

Mr Quigley —There has only been one so far.

Senator FAULKNER —Yes, I know. I appreciate that there has only been one. Are there one or two more planned to go to air?

Mr Quigley —We have had two and there is one more that I understand is planned.

Senator FAULKNER —Do you know the timing of the first two?

Mr C. Taylor —We can get that for you.

Senator FAULKNER —When is the third one planned to go to air?

Mr Quigley —As we said before, some time in June is what we understand.

Senator FAULKNER —At the end of these two hours, there is what—a short authorisation or a short acknowledgment that this is paid advertising for the Australian Taxation Office?

Mr Quigley —There is a statement to the effect that the session, if you want to call it a session, was funded by the Australian Taxation Office, yes.

Senator FAULKNER —Do you know the form of words that is used in that provision?

Mr Quigley —I do not know the form of words off the top of my head. I am sorry.

Senator FAULKNER —Could you find those out for us?

Mr Quigley —They will be in the transcript, which we have said we will provide.

Senator FAULKNER —I might have missed what you said. I thought you said you would provide a transcript for one of the—

Mr Quigley —No.

Senator FAULKNER —You are going to provide it for both?

Mr Quigley —Oh, yes.

Senator CONROY —Is there any other paid advertising?

Mr C. Taylor —Not that I am aware of, Senator.

Senator CONROY —Mr Jordan is remarkably successful at getting material in the local newspapers. I spend my life as a senator trying to get the local newspapers to print my press releases and I am remarkably unsuccessful. But Mr Jordan is remarkably successful at getting his material into local newspapers.

Dr Hagan —Would you like me to pass the compliment on?

Senator CONROY —I would like to do it to his face, but that is a different issue I will come to. Is Mr Jordan just dead lucky or is he paying to get his material into the local newspapers?

Senator Kemp —Just talent, Senator, that is what it is.

Senator CONROY —He is so talented that you will not let him come? I would like Mr Jordan to come—

Senator Kemp —After this very high praise, Senator, I think I may rethink this issue.

Senator CONROY —I would like Mr Jordan to actually come but, as you would be aware, you would not allow Mr Jordan to come.

Senator Kemp —I would not assume that, but if you keep this praise up to Mr Jordan, who knows what will happen, Senator?

Senator CONROY —Is Mr Jordan just dead lucky or is he paying to have material inserted into the local newspapers? I have seen newspapers from all around the country where he has been just incredibly successful?

Dr Hagan —Mr Jordan is the chair of the New Tax System Advisory Board. The secretariat for that is housed within the ATO. I can only speak in the terms that I have drafted press releases for Mr Jordan.

Senator CONROY —These are not even press releases. I just assumed naturally that, because Mr Jordan's name was on it, it was actually coordinated by yourself, so I apologise. Mr Taylor, you heard me say that he is remarkably successful. I am remarkably unsuccessful.

Senator Kemp —Maybe he is a man of substance.

Senator CONROY —I should take the hint?

Senator Kemp —Maybe what he is saying is actually worth reading.

Senator CONROY —Is it just coincidence?

Mr C. Taylor —No, it is not. The staff in my area contact newspapers around the country and ask if they will take columns and the like. There is no payment involved. Regional newspapers especially are very pleased to get that sort of material.

Senator CONROY —So it is not linked to advertising in any way—that there is a certain amount of advertising done and they say `We will give you a column to go with X amount of advertising'?

Mr C. Taylor —It is not linked to advertising at all.

Senator CONROY —It is a distasteful practice that goes on with some newspapers, I understand.

Mr C. Taylor —Distasteful?

Senator CONROY —Yes.

Mr C. Taylor —I would not have called it distasteful.

Senator CONROY —You are not engaged in it, so you do not have to worry. I am just saying that some newspapers will offer you column inches for the amount of advertising that you put in. You are not involved in anything like that?

Mr C. Taylor —Not that I am aware of.

Senator CONROY —They are just happy to take a weekly article from Mr Jordan—all around the country, all the newspapers?

Mr C. Taylor —Yes.

Senator CONROY —I have to get his job. Minister, Mr Jordan was asked to appear before this committee and he politely declined. Do you think he should have attended?

Senator Kemp —I doubt whether anyone should have attended! If Mr Jordan has been able to avoid coming, I can only congratulate him. Frankly, I would have to say that I am not aware of the particular reason why he is not coming. I will make inquiries if you like.

Senator CONROY —He felt he did not have anything of value to add. I think I am quoting him straight.

Senator Kemp —In that case, you have posed the question and you have the answer. I am not sure if I can add any more to it.

Senator CONROY —He is responsible for advising on the expenditure of large sums of public money, isn't he?

Mr C. Taylor —He does not advise us.

Senator CONROY —He does not advise anybody on expenditure? I thought that is what the committee did.

Dr Hagan —The New Tax System Advisory Board has an oversighting role of the new tax system initiatives. As part of my work, for example, I have consulted with Mr Jordan and the board on a number of occasions, as I think I have explained at previous hearings, about where we have gone out to contract and have been discussing tenders, or where we are discussing what the strategy is for organisation delivered assistance or adviser education. I have consulted with Mr Jordan and the board on that basis.

Senator CONROY —He does not advise on expenditure of public moneys? You have never consulted him about expenditure of public moneys?

Dr Hagan —As I have explained, I have consulted with him in terms of the delivery of the program that I am responsible for administering. To that extent, I guess he does but there is not a formal role in the way that I suspect you mean.

Senator CONROY —Do you believe Mr Jordan should be here tonight?

Senator Kemp —I do not know whether it is appropriate for—

Senator CONROY —He is this mystical figure. He is up there and no-one wants to claim him.

Senator Kemp —You have praised him so highly and you have indicated that he is a man of considerable substance.

Senator CONROY —No-one wants to claim ownership. I am struggling.

Senator Kemp —Like you, we think he is doing a very good job. According to you, he does not feel he has anything more that he could add to this committee.

Senator CONROY —He did not think he could contribute anything of value. I would probably agree with him on that but I still would have liked him to have been here.

Senator Kemp —He may have read the Hansard and seen the way that these committees go on and decided this was an evening he could easily avoid.

Senator COOK —Do you mean feel like he is not accountable to the parliament?

Senator Kemp —Senator—

Senator CONROY —The letter he sent to the committee advising of his non-attendance and signed on his behalf by Mr Gardiner states that the board oversees the work of the ATO in the GST Startup Assistance Office and provides advice where appropriate. Can you define for the committee the extent of the work Mr Jordan oversees and the advice he provides where appropriate?

Dr Hagan —Senator, I think I have outlined it in my previous comments, to the extent that I deal with Mr Jordan and the board.

Senator CONROY —This overseeing work and the provision of the appropriate advice also includes numerous public appearances and interviews by Mr Jordan, doesn't it?

Dr Hagan —He has made quite a few public appearances, yes.

Senator CONROY —A famous one recently. How much is Mr Jordan being paid by the public to oversee and provide advice?

Dr Hagan —I understand that approximately $150,000 for his work will be paid to KPMG.

Senator CONROY —To KPMG for his services?

Dr Hagan —For a nominal three days a week.

Senator CONROY —And how long is this for?

Dr Hagan —It operates till the end of this calendar year, the end of December.

Senator CONROY —That terminates when you terminate?

Dr Hagan —Yes.

Senator COOK —Does the payment that you make to KPMG for Mr Jordan's time cover the real cost of his time, or is it subsidised to some extent by KPMG?

Dr Hagan —The way I would put it is that, if I were to calculate a charge-out rate that would probably be applicable to someone of his standing and we were hiring him in a private capacity for the hours he actually works, we would probably be looking at closer to $400,000 or $500,000 for the year.

Senator COOK —So he is subsidised by KPMG.

Senator CONROY —They get to put their letterhead on it.

Senator COOK —You do not pay his true market value. That is what you are saying. His true market value is much higher, which means he is lent to you at a subsidised rate, doesn't it?

Dr Hagan —He is being provided at less than it would cost us to hire him if we paid him on a normal commercial basis.

Senator CONROY —Does that fee include Mr Jordan's cost of travel and accommodation?

Dr Hagan —From memory, I think there is a travel allowance. He is reimbursed for travel costs and I think he is also reimbursed for accommodation.

Senator CONROY —He travels on GST start-up related business?

Dr Hagan —It would be on board business. We are getting into territory where it is more the operation of the secretariat. I am seeking to help you as much as I can.

Senator CONROY —Does he travel business class or economy class?

Dr Hagan —That I do not know, I am sorry.

Senator CONROY —You will take it on notice, though, for us?

Dr Hagan —Sure.

Senator GEORGE CAMPBELL —At what level is he remunerated?

Dr Hagan —What reimbursement level do we set that at? I think I would have to take that on notice. I do not think I know the answer to that. Senator, is that a question of whether we are setting the SES benchmark? Is that the sort of question you are asking?

Senator GEORGE CAMPBELL —Is he paid at the same level as a backbencher or as a public servant or as a minister or as a prime minister?

Dr Hagan —I can find that out.

Senator CONROY —That was the TA you were asking about, or the general—

Senator GEORGE CAMPBELL —Yes.

Mr Smith —We usually set them at public standard.

Dr Hagan —It would be a public service rate. I am just not sure which one.

Senator CONROY —How much is his travel allowance? What is the rate?

Dr Hagan —That is what I have to check.

Senator Kemp —That was the question.

Senator CONROY —Actually, Senator Campbell was mainly asking about remuneration. I just wanted to clarify that we also want to know—

Senator GEORGE CAMPBELL —I meant remuneration for his accommodation.

Senator CONROY —Could we find out how much travel allowance has been paid so far?

Dr Hagan —Sure. I will take it on notice.

Senator CONROY —How much has been spent on Mr Jordan for travel so far, including air fares, accommodation and ground transport?

Dr Hagan —I will take it on notice, yes.

Senator CONROY —Does anybody travel with Mr Jordan when he is on GST start-up office related business? If so, who travels with him?

Dr Hagan —Are we talking about Mr Jordan coming from Sydney to Canberra for board meetings? Is that the sort of question you mean?

Senator CONROY —He did a launch last week. Does someone travel with him? That was not a board meeting, I presume.

Dr Hagan —If that was a launch in Canberra, I assume he would have been accompanied to the launch by officials from whatever agencies were concerned. So there would be that sort of an arrangement. If it was in Canberra, they would probably be Canberra based officials too.

Senator CONROY —So no-one would have travelled up from Sydney with him?

Dr Hagan —I am not—

Senator CONROY —You can just take it on notice. That is probably the easiest way.

Dr Hagan —There is no regular arrangement that I am aware of.

Senator GEORGE CAMPBELL —Is he provided with secretarial assistance through Treasury or does he provide his own through KPMG?

Dr Hagan —The secretariat provides support—

Mr C. Taylor —That is not just to him, though, Senator.

Dr Hagan —It is to him and to the board. That is based in the ATO. And the remuneration that is paid to KPMG is meant to cover the provision of some secretarial services within KPMG as well.

Senator GEORGE CAMPBELL —Is that separated? Is there a figure in the package for Mr Jordan and a component of the package for secretarial assistance?

Dr Hagan —As I understand it, it is a lump sum. There is no distinction between the secretary and the—

Senator GEORGE CAMPBELL —So it is a lump sum for Mr Jordan's services, plus—

Mr C. Taylor —We do not know. I would be the one who could find out that information and get it to you. I would have to take that on notice.

Senator GEORGE CAMPBELL —Would you take that on notice?

Mr C. Taylor —Yes.

Senator CONROY —How many other board members are there?

Dr Hagan —Six. It totals seven.

Senator CONROY —Are they all paid a fee?

Mr C. Taylor —Yes, they are.

Senator CONROY —Could we get details of how much each is paid?

Mr C. Taylor —I will take that on notice. They are paid an appearance fee.

Senator CONROY —Do they travel at all or do they just come for board meetings? When do they travel separately, like Mr Jordan?

Mr C. Taylor —They just come to board meetings, is my understanding, but I can get details of that for you.

Senator CONROY —I presume they get the same fee arrangements for travel and accommodation? Could we get the breakdown of each of those, whether they have been travelling to a board meeting or, in the odd case, other than Mr Jordan, where they have travelled other than to a board meeting?

Mr C. Taylor —Yes, I will get that for you.

Senator CONROY —Minister, are you aware of the case of the Wheaton family in rural Victoria who are closing their business after 97 years of operating because of the GST? Did you see that?

Senator Kemp —I am searching my memory, Senator. Could you just refresh my memory?

Senator CONROY —They are closing down their family business, selling up. Survived famine, flood, wars, everything; could not survive the GST. Remember that family?

Senator Kemp —If you have got some information on it I will look at it.

Senator CONROY —Are you aware that Mr Jordan personally tried to convince them to keep the store open, but they said no?

Senator Kemp —I will have to check that, Senator.

Senator CONROY —The Courier-Mail, 29 April, is the quickest place to look. Minister, why did Mr Jordan personally get involved in this case if his role is purely one of overseeing and providing advice, as claimed in his letter of refusal to attend the committee hearing?

Senator Kemp —I can only speculate because, on the particular case in the questions you have asked me, I will have to get some information. I suspect he was providing them with some advice that might have been of help to them. If they did not find that advice helpful, that is a matter for regret.

Senator CONROY —I will read from the Courier-Mail of Saturday 29 April:

After the ABC broadcast its initial report, the chairman of the New Tax System Advisory Board, Chris Jordan, stepped in and tried to persuade Wheaton to keep his store open.

"We've offered particular help to them and they've decided they don't want any more help," Jordan says. "They've made their decision."

Why did Mr Jordan get involved in this?

Senator Kemp —As I said, I will inquire for you, Senator. If you tell me that they were worried about the GST, which I guess is what you are telling me, he may have heard about the case and thought that he might be able to assist them.

Senator CONROY —That is very generous. I am very worried about the GST and I would like Mr Jordan to come and answer my questions and my concerns.

Senator Kemp —Well, as I said, he may well hear your requests, Senator. I do not know whether he will seek to respond to them or not. It is a matter for him.

Senator COOK —Does he regard himself as accountable to the—

Senator Kemp —I do not know.

Senator CONROY —Do you consider the board accountable?

Senator Kemp —He is a member of the private sector. He is employed under contract by the tax office—sorry, by the government.

Senator CONROY —One of his three nominal days could be today, perhaps. Do you consider the board is accountable to this—

Senator Kemp —Let me make the point: if you have got any questions on the board, we are happy to respond to them. There have been a whole host of questions on the board asked this evening and all have either been responded to or been taken on notice, in which case consideration will be given to responding to them. I do not think there is any lack of accountability there. I am not sure whether the particular status of Mr Jordan is such that he would come before this committee. I shall make inquiries.

Senator CONROY —He is expending public money, though, isn't he?

Senator Kemp —He has been employed under contract. I do not know whether this committee—

Senator CONROY —Do you—

Senator Kemp —Let me just raise the issue. I do not know whether this committee feels it has the capacity to request the appearance of any person under contract by the government. Does it?

CHAIR —The committee wrote to several people, including Mr Jordan, requesting appearance. The committee received a response from Robert Gardner, director of the board secretariat.

Senator CONROY —Do you think it is appropriate that somebody is expending hundreds of thousands of taxpayers' dollars to not be accountable to the parliament?

Senator Kemp —If you are talking about coming before this committee and being subjected to the sort of abuse I have seen in the course of the evening, frankly I can only commend Mr Jordan on his judgment.

Senator CONROY —I asked if you think it was—

Senator COOK —You can't agree with people not appearing?

Senator Kemp —Let me make the point, Senator: your behaviour tonight has been quite extraordinary, in my view. I do not think—

Senator CONROY —You have got to get out more, Senator Kemp.

Senator Kemp —If you want me to answer the question I will answer it, but—

Senator COOK —You do not believe in accountability, do you?

Senator Kemp —I do, but if you think—

Senator COOK —If you think covering up is accountability, you have got a long way to go.

Senator Kemp —If you think bringing people before this committee to insult them in the way that you make a practice of doing, Senator, I do not call that accountability.

Senator COOK —If inquiring as to what they did is insulting, then—

Senator Kemp —No, you conduct political campaigns against the Public Service.

Senator COOK —I have not made a campaign against anything.

CHAIR —Order!

Senator COOK —I have been properly conducting myself, Minister.

Senator Kemp —You have been conducting a political campaign.

Senator CONROY —This committee is entitled to ask Mr Jordan to appear.

Senator Kemp —You are absolutely entitled to ask Mr Jordan to appear, and Mr Jordan is absolutely entitled to decide whether he wishes to appear or not.

Senator COOK —No, he is not.

CHAIR —Could I just interrupt for a minute. We are nearing the end of this evening's proceedings. Earlier today this committee had a meeting with the clerk, who has submitted his written advice to the committee. That has now been distributed to members of the committee and I request the committee's approval to table that advice, which means it is then made public. Is that in order? There being no objection, it is so resolved. Are there any further questions?

Senator CONROY —I was just asking the minister whether he believed it was appropriate for this committee to be able to question Mr Jordan on his expenditure of taxpayers' money.

Senator Kemp —There may be hundreds of thousands of people employed under contract by government in various departments. I am not sure. Frankly, I would have to refresh my memory of whether, under the rules, this committee can expect them to attend these hearings. I suspect that the answer to that is no, the committee cannot expect them to attend these hearings. Frankly, Senator, given the performance of this committee that we have seen this evening, the political attacks which have been launched by the Labor Party on public servants, I do not accept that that is being accountable. I think this is just part of a political campaign.

Senator COOK —You would rather cover up, would you?

Senator Kemp —No-one is covering up. We are all here, Senator. We are all here and you can ask all the questions you like.

Senator CONROY —Except Mr Jordan.

Senator Kemp —You can ask all the questions you like. You can ask about Mr Jordan. You tell me, Senator: is it appropriate that this committee can expect people who are under contract to come before it? What is your answer to that?

Senator CONROY —No, I am asking you if you believe we are entitled to—

Senator Kemp —My answer to that is that I do not think that is the case. What is your answer to it?

Senator CONROY —Minister, was Mr Jordan asked by either the Treasurer's office, your office or the government's GST implementation unit headed by Mr Phil Gaetjens to contact the Wheatons after their plight became public?

Senator Kemp —I would have to inquire into that.

Senator CONROY —Will you take it on notice?

Senator Kemp —Yes, I will take that one on notice.

Senator CONROY —Dr Hagan or Mr Taylor, why did Mr Jordan deem it necessary to make personal contact with the Wheatons?

Senator Kemp —I think I have answered that question.

Senator CONROY —I do not think so.

Senator Kemp —You have posed that question to me and I have responded to it. If you feel you have any more to add, please do so.

Mr C. Taylor —I am not familiar with the case, Senator.

Dr Hagan —It is not something I have discussed with Mr Jordan. Could I correct a record from earlier on? I think I said that the board totals seven; it actually totals eight. There is the chairman, Mr Chris Jordan, and seven members of the board as well.

Senator CONROY —Does anyone know how many other businesses Mr Jordan has personally contacted with regard to GST issues?

Dr Hagan —I do not.

Senator CONROY —Do you know what Mr Jordan does? He is on contract. Is this part of his contract or is he just being a good-spirited citizen or drumming up business for KPMG, perhaps? In what role is he contacting Mr Wheaton and potentially other businesses?

Senator Kemp —You have posed this question and I have responded to it to the extent that I am able. If there is any more information we can supply, we will supply it. You have put a number of related questions on notice.

Senator CONROY —There was a report in the Financial Review last Friday, 26 May about the Castlereagh regional abattoir in Coonamble, New South Wales. It said that it will be closing, putting 50 people out of work due to the GST, because they cannot find the $200,000 per month they will need to meet the new tax system requirements. Will Mr Jordan be personally contacting them?

Senator Kemp —I will draw Mr Jordan's attention to your question. Are you proposing that he should? What is your view on it?

Senator CONROY —We are not the government; we are just seeking the government's views on these issues.

Senator Kemp —I am not sure whether you are worried that he is not going to contact them or you are worried that he is going to contact them.

Senator CONROY —I am just trying to find out the criteria—

Senator Kemp —Can you give us some guidance on what you would prefer?

Senator CONROY —I am seeking to establish what the criteria are, and I just want to know whether or not you have to receive wide publicity that is negative about the GST before Mr Jordan will leap into action. That is all I am trying to ascertain.

Senator Kemp —Mr Jordan's role is to provide advice and, if people want that advice, I think that is—

Senator CONROY —I understand that. Mr Jordan seems to have gone from advising the government and the tax office to advising individual clients he hears about in the media. I am just trying to find out whether it is pro bono, so to speak, or he is working—

Senator Kemp —You are not interested in the slightest; you are just trying to fill in time until 11 o'clock, let us face it.

Senator CONROY —Tragically not.

Senator Kemp —Surely better questions than that have been drafted for you.

Senator CONROY —On a long day your repetitive repertoire does seem to get us down, Minister. If you could just let me get on with my questions, we will get to 11 o'clock more quickly. In regard to Mr Jordan, you would have seen his remarks that there will be `mass hysteria all over the place when the GST starts on 1 July'. What did Mr Jordan mean by those comments?

Senator Kemp —I think Mr Jordan has effectively answered that. Someone may have some information here.

Senator CONROY —Does anyone want to contribute to the mass hysteria?

Mr Matthews —I believe Mr Jordan himself put out a clarifying statement of which we can get a copy for you, Senator.

Senator CONROY —No, I have seen the tongue in cheek. I was just wondering whether anyone else had—

Mr Matthews —I do not think we have anything more to add to his own response to your question.

Senator CONROY —Minister, if the government's own adviser believes there will be mass hysteria—

Senator Kemp —He did not, Senator.

Senator CONROY —why shouldn't Australian small business people believe there will be mass hysteria?

Senator Kemp —The short answer to your question is that he did not believe that, and a clarifying statement was put out. The very premise on which your question is based is wrong.

Senator COOK —I have a few questions on Mr Jordan as well and his role as the chairman of the New Tax System Advisory Board and the responsibilities of that board, et cetera. But going back to Radio Wise, if I may, one of the people who authorised the program or, to put it another way, who takes responsibility for the accuracy of the content of the program, along with you, Mr Quigley, is, I understand, Ms McCluskey. You are nodding your head in the affirmative.

Mr Quigley —What I said was that it is the second part. It was Mr Taylor's area that organised and, I suppose, authorised the program. We were, to use the words that they used, the talent—whether that is good or bad talent—

Senator COOK —That is the words they used.

Mr Quigley —that actually provided the legal responses to the questions that were asked.

Senator COOK —She is now no longer employed by the tax office, is she?

Mr Quigley —That is correct.

Senator COOK —Is it true that she now works for the National Farmers Federation as their tax adviser?

Mr Quigley —I understand that she has taken up the position with the National Farmers Federation, and I would assume that that would be as a tax adviser or something similar.

Senator COOK —When a senior officer of the tax office departs the service, do they have to sign an exit confidentiality clause not to reveal internal matters of the tax office?

Mr Quigley —There is a process. Having been in the tax office 28[half ] years and not left, I am not sure exactly what that process is, but there is a process. But, beyond that, we all sign a declaration of secrecy on entering the tax office, and I do remember that very distinctly from 28[half ] years ago because it is very much part of our culture that we understand that we are not to divulge anything that we learn, even after we leave the tax office.

Mr Jones —My understanding is that it continues to apply after you leave the tax office in relation to taxation—

Senator COOK —Indefinitely or for a time-limited period?

Mr Jones —Forever in relation to matters that you learnt in the tax office—if that is the right language to use—that I am aware of.

Senator COOK —I see, thank you very much, Mr Jones. When she left the tax office, did she leave of her own volition or was she asked to leave?

Mr C. Taylor —She left of her own volition.

Senator COOK —Did she receive a redundancy package?

Mr C. Taylor —No, she didn't.

Senator COOK —She did not. Thank you very much.

CHAIR —Any further questions?

Senator COOK —If I might go back to Mr Jordan, but I do not want to cut across Senator Conroy at this stage—

Senator CONROY —I will refer over to you.

CHAIR —You have got two minutes.

Senator COOK —Who actually employed Mr Jordan? He is employed not by the tax office but by the government. Who actually employed him?

Mr C. Taylor —The secretariat is located within the ATO. The management of the contract would be the responsibility of the ATO. I am not quite sure how to answer the question as to who employed him, and I could find that out, indeed, though as to what that process was.

Senator COOK —I understood—correct me if I am wrong—that Mr Jones indicated earlier, when the minister was inferring that Mr Jordan was employed by the tax office, that he wasn't—that he was in fact employed by the government.

Senator Kemp —No, I corrected that, Senator.

Senator COOK —I know you corrected that, which goes to my point: it is true he is not employed by the tax office, albeit he is located in the confines of the tax office. My question is: if he is not employed by you, although he is located there, who did employ him?

Mr C. Taylor —Unless someone else can answer that, I would have to take that on notice. It was certainly before my time there, but I could get you details of what the process was as to how that occurred.

Senator COOK —Was he engaged by the minister?

Senator Kemp —Not by me, Senator.

Senator COOK —That must mean Mr Costello then?

Senator Kemp —We will take note of your request.

Senator COOK —We are drawing close to time, but you have offered us Wednesday night: can you be in a position to answer that question when we resume?

Mr C. Taylor —Sure.

Senator COOK —And I will take the questioning from there if you wish to close now, Mr Chairman.

Senator MURPHY —If it is the case that we come back on Wednesday night, that will not—

CHAIR —We are going to close now, and I think we should discuss in the morning the arrangements about continuation.

Senator CONROY —It is just a question of not wanting the officers here to feel that they have been released in the sense that we may want them back either on Wednesday night or on a Friday soon—

CHAIR —As a committee, we should consider that in the morning, may I suggest, and we will advise and confer with the minister about the arrangements.

Senator Kemp —Yes, I think that is very important—confer with the minister.

CHAIR —Thank you, the committee is now adjourned. We will resume tomorrow morning at 9 o'clock with the Australian Securities Investment Commission.

Committee adjourned at 10.59 p.m.