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September 2013

Time-consuming talking to various media today - but enlightening

The Press Gallery is on the move trying to find new things to say about George Brandis's travel claim. 

I've had a dozen or so journalists get in touch to interview me today - it really amazed me that not one had the actual parliamentary guidelines for travel expenses, nor the actual expense statements for Senators Brandis or Joyce.

I can see clearly that getting work to pay for your trip to a wedding will never pass the pub test.   But if a journal of record like the SMH makes that claim that that's where the money went (ie all to pay for the wedding trip), it would want to be on rock solid ground.

Here's some background that might put the Sun-Herald story Sunday into a bit of historical context - and maybe show up some areas of expense guidelines that should be fixed.

Every six months the Federal Department of Finance releases a comprehensive report called 

Parliamentarians' Expenditure on Entitlements Paid by the Department of Finance and Deregulation -

Here's a link to the report for the second half of 2011.   It's been available on the department's website since early 2012.

Here's the detailed report for Senator the Honourable George Brandis QC for that period.

Here's then Senator Barnaby Joyce's.   This report seems to be the basis for the SMH claims about the Joyce/Brandis expenses.

I'd caution about relying on the airline ticket data in particular in those reports.   Without further details as to what was written on individual invoices/travel proposals and the like, it would be an educated guess to marry up an airline flight with a confirmed date of travel.  The ticketed/charged dates often don't marry up with the flight date and tickets are sometimes issued, not used on the first recorded date then used at a future date.

Have a look at the format in the reports above - very sparse on details.   Compare that with the detailed information on a full-on FOI release of complete documentation on travel details like this.

The Travel Allowance bit (ie the money they get for accommodation etc if they stay overnight) looks more reliable dates wise.   But in the case of Senator Brandis the entries in his folio raise some questions.

Senator Brandis's entry for the 4th of December starts with the words, "Office Holder".

Ministers of the Crown, the Prime Minister, the Opposition Leader and shadow ministers (Office Holders) have slightly different travel entitlements from backbenchers.

The salary and entitlements for Opposition Office Holders are set out here.

The travel bit that relates to opposition office holders like Senator Brandis, the then Shadow Attorney General is here:

George brandis office holder

So the taxpayer will pay for parliamentary business, electorate business or "official" business.

Of the 3 categories of travel, only "Official Business" is defined in the Remuneration Tribunal Determinal 2012/04.

Here's a link to Determination 2012/04.   Parliamentary business and Electorate business appear to have broad and generally accepted common usage definitions.

Here's the definition of Official Business:

3.2       For the purpose of clause 3.1 official business means attendance at:

(a)    properly constituted meetings of a Government advisory committee or task force provided that the senator or member is a member of the committee or task force;

(b)    functions representing a Minister or a Presiding Officer on official business as a Minister or Presiding Officer, provided that the Minister or Presiding Officer nominates the function in advance in a written request to the senator or member to represent him or her.

When I read the Herald's report it struck me as silly that the purposes for which a shadow minister of the crown could travel and charge the expense to the Commonwealth would be so limited.

Here's what the Sun-Herald said in its report about George and Barnaby:

The federal Department of Finance's guidelines state MPs are allowed to claim travel and accommodation expenses for official business including ''meetings of a government advisory committee or taskforce'' or ''functions representing a minister or presiding officer''. Meeting with journalists is not a purpose sanctioned by the guidelines.



That is an unworkably restrictive list of purposes for which members or shadow office holders in particular can travel.

The fact that Members of Parliament do travel for purposes which exceed the limits described in the Sun Herald's selective and limited report is reflected in the legislation - here is Section 3.18 of the Remuneration Tribunal Determination referred to above, the effect of this section is to authorise a senator or member to send a spouse instead of themself to the following occasions.   Ipso facto the member or Senator must have an entitlement to taxpayer funded travel in the circumstances set out below.

Representational travel

I think that the Sun-Herald article that set the hounds baying about George and Barnaby was a pretty poor and sloppy piece of writing.

The first par is terribly misleading:

Two of Prime Minister Tony Abbott's most high-profile ministers claimed thousands of dollars in taxpayer entitlements for attending the wedding of close friend and Sydney shock jock Michael Smith.

The Sun-Herald could not have known what other purposes either Joyce or Brandis were travelling for on that weekend.   The journalist did not contact the Senators' offices during working hours, he phoned each of Joyce and Brandis on the Saturday before publication.  He phoned me too on the Saturday while I was driving back from Wagga.  That meant that neither Senator had access to their staff, diaries or office files to be able to sensibly and confidently answser questions about what other business they might have had.   As we know, in the case of Barnaby Joyce there was quite a bit, but the Sun-Herald reported this;

Mr Joyce claimed a flight to Moree the next day and about $500 worth of charges for the use of a Commonwealth car on the day of the wedding. He said he could not recall whether he had other meetings that day but defended the use of public resources to attend the wedding.

''There were, no doubt, lots of people there involved in politics,'' he said. ''It was one of these things where you're noted more by your absence than by your participation.''

In the last Parliament, Senator Brandis made the case for prosecutions of Mr Thomson and Peter Slipper.

I'm not surprised that Barnaby could not recall what he did on 4 December 2011 when he was phoned on Saturday, 28 November 2013.   I have to admit to having doubts about the reliability of my recall as to the actual date of my wedding anniversary.

Given that the expense reports had been published since early 2012 it's hard to understand why the SMH made no effort to contact the office staff of the two senators to determine as a matter of fact what if any other business each of them had.   There may have been none - but it's a dangerous claim to make in a journal of record that two ministers of the crown claimed thousands of dollars to attend a private wedding when as we have now seen other things took place on that weekend too.

Why the hurry to publish?   And whey publish without elaboration the statement that Barnaby Joyce made while driving last Saturday that he couldn't recall any other business meetings that weekend.

Here's the poem Barnaby Joyce read at Katarina and my wedding.

I love this poem.   Barnaby read it like he'd written every word.



Fair dinkum love isn’t about bringing in a dozen red roses
It’s about bringing in the washing.
It’s not about standing next to your partner 
because they look good on your arm
It’s about standing by them even when they look foolish.
Fair dinkum love isn’t about stiff posture and smart clothes
It’s about wrestling on the couch in your tracksuit.
It’s not about oysters and candle-lit dinners
It’s about bringing home Chinese when your partner’s had a busy day.
Fair dinkum love isn’t about exciting getaways and fancy resorts
It’s about being totally content sleeping-in together at home.
It’s not about gym memberships and facelifts
It’s about growing old and fat together.
Fair dinkum love is not about romance or image or success.
Fair dinkum love is about two average people adoring and accepting each other for who they are.

Kim Cockerell

Outlaw Motor Cycle Gangs - OMCG, law and order and the murder of Gold Coast dad Omega Ruston in 2009`

Michael McKenna writes in today's The Australian about Queensland's entrenched problems with outlaw motorcycle gangs.   On the weekend bikie hoodlums stormed the Southport Watchhouse.   Drug manufacture and distribution is pretty much monopolised on the Gold Coast by OMCGs, particularly methyl-amphetamine.   And the violence that attends the gangs and their members is deadly.

The Beattie/Bligh Labor governments went soft on gangs for years.   A big part of their softly softly approach was an official refusal to use the word "gang".   For years we had the ridiculous spectacle of police officially referring to gangs as "groups of like minded individuals."

First up The Australian story from today - then some unbelievable details on the murder of Aussie dad Omega Ruston on the Gold Coast on Australia Day, 2009 by persons who are thought to be associated with OMCG and Middle Eastern Crime Gangs.

Call for US-style mob laws to bring bikies to their knees

THE Queensland government is considering American-style anti-racketeering laws to crack down on bikie gangs after a series of brawls on the Gold Coast on the weekend.

More than 20 people were arrested after a fight erupted involving the Bandidos and Finks gangs at a Broadbeach restaurant, with bikies later laying siege to the Southport police station to demand the release of fellow members.

Police admitted to being caught out by the violence and called for back-up from neighbouring stations when gang members confronted officers at the station, injuring four of them.

The brazen display by the bikies, as the Liberal National Party government returns to the Supreme Court today to continue its test case to outlaw the Finks, drew a warning from Premier Campbell Newman that the government and police were planning a "never before seen" crackdown on outlaw motorcycle gangs.

The weekend brawls follow a rise in bikie-related violence and Gold Coast drug trafficking.

Mr Newman, who is on a trade mission to Japan, said bikies would face the full force of the law and police would "reclaim the streets".

"We're going to meet the bikies with an equal response in terms of force," he told The Sunday Mail.

"Life is about to get very difficult for them. Every gang member will be assumed to be a criminal and treated as such until this is over."


Here's an article I wrote in 2009 about the murder of Omega Ruston.   Four years later and no one has been charged with taking that family's dad.`    

Bringing Omega Ruston's killer(s) to justice

Posted by: Michael Smith | Michael Smith 26 August, 2009 - 11:45 AM

Justice Peter Dutney has released his decisions in the matter of the CMC (Crime and Misconduct Commission) versus Paul Younan, Jason Khalil, Toni Elbayeh and Mariane Kazzi.  View article here

Younan, Khalil, Elbayeh and Kazzi don’t want to co-operate with either the police or the CMC.

They are persons of interest in the investigation into the murder of the late Omega Ruston.   But they’re not about to tell anyone what they know.

His Honour heard evidence from the CMC and police that Omega Ruston was shot as a result of a road rage incident involving a vehicle with 3 “Lebanese” people inside.

Queensland police have received criminal intelligence reports from NSW police – that information gives rise to suspicions concerning the involvement of the people identified in the NSW police intelligence.

Queensland police believe that the persons of interest won’t cooperate with investigators – police also believe that they may try to leave the country or intimidate other witnesses.

So police went to the CMC to ask the CMC to summons the 4 to appear before a CMC hearing.   At the hearing, the CMC would be able to ask the 4 persons questions on oath and they would be compelled to answer or face charges for not answering.

And the 4 persons have applied to the Supreme Court to have the CMC proceedings discontinued.

They lost.

Paul Younan, Jason Khalil, Toni Elbayeh and Mariane Kazzi will now be summonsed to appear before a CMC hearing in which they will be compelled to answer questions on oath.

At the heart of this is an investigation into the murder of a young father of two.   Dead as a result of a road rage incident on Australia Day.

The late Omega Ruston and his family deserve every bit of the force of law that could bring his murderer(s) to justice.

One of Australia's pre-eminent taxation law experts on work-related expense claims arising from a wedding (not GST questions from a Wedding Cake)

Here's one for the true-believers, prepared to wade through the minutiea of work-related expense claims potentially arising from attending a wedding.


Hi Michael

I started to write the attached for Brandis and Joyce and thought I’d send it to you.

Also attached are some extracts from two tax office rulings.

You can look at the full documents on their website.

There is one other thing I want to raise.

How did Fairfax link these dates and expenses to your wedding?

I think you may have invited one or two rats who happen to call themselves journalists.





According to the letter from George Brandis he is entitled to have expenses paid which are incurred in the course of attendance at a function primarily for work related purposes.

This appears to have much in common with the requirements under the general deduction provision of our tax law.

It might be thought a strange result if something which could generate a tax deduction was ineligible for claim as a Parliamentary expense.

That tax provision carries within it a requirement for an outgoing to be incurred in the course of gaining and producing assessable income and an exclusion for private expenses.

For practical purposes the requirements set out above may be thought of as different aspects of the same question.

Common sense would dictate that the nature of the duties attached to a particular position would affect the distinction between private/business expenses.

See for example; Bentley Stokes and Lowless v Benson 33 TC 491 entertainment expenses of Solicitors ; 12 TBRD Case M3 entertainment expenses of an eye specialist; Case D44 72ATC 252 entertainment expenses of a senior public servant and Taylor v Provan travelling expenses of the Canadian director of an English Brewery. See also the list of expenses claimable by politicians in TR 99/10

To be regarded as an expense of the requisite character it should result from an obligation arising from the nature of the relevant office/employment and not from the circumstances of the particular person employed.

Normally purpose is determined on an objective basis, however subjective motives can be examined in certain circumstances eg a great disparity between the outgoing and any proximate production of income. Fletcher v FCT 91 ATC 4950.

In relation to apportionment the Tax Office takes the view that, where the main purpose is the production of income, related expenses are fully deductible notwithstanding the existence of an incidental private purpose.

This can be seen as equivalent to the requirement for the expense to be primarily for work related purposes.

Apportionment for tax purposes on a time basis is inappropriate.

The correct approach is to determine the degree of predominance to be attached to the relevant business/private aspects. See TR 98/9.

A wedding would normally be a clear example of a private function.

Was Brandis primarily at that function because of the requirements of his office or because of his personal relationships; even though those relationships arose out of matters concerning his office.

That is something he would have to answer but any extended history of social interactions between he and you would, on an objective basis, be contrary to an assertion that his attendance arose primarily from the duties of his office.

It would also be necessary to fully examine the advantages he saw as arising from his attendance and their connection to those present.

Presumably the attendance of Barnaby Joyce was something that had been planned for some time.

If this is the case it is not some incidental activity which has occurred as a pleasant addition to the primary reason for his presence in Sydney.

I am assuming he was going to the wedding in any case and the Bolt interview was an opportunity to kill two birds with one stone.

However it is difficult to identify any expenses claimed that relate to your wedding.

There may of course have been other reasons for Joyce’s presence in Sydney or nearby and the expenses claimed can only have related to Comcar.

Against this you appear to have paid for his car expenses associated with the wedding so it appears the comcar expenses have no relation that.

The flight from Sydney to Moree would appear to be an entirely appropriate subject for claim.

For tax purposes an apportionment would be required if any expense was involved in getting Joyce to Sydney for the wedding and the interview but it is difficult to describe these expenses as primarily for work related purposes unless Brandis was also able to do so.

In my opinion it is probably appropriate that Brandis has made a repayment.

As you say we have to wait for Joyce to disclose more details.


TR 1999/10

Entertainment expenses


174. A deduction is not allowable under the general deduction provisions of section 8-1 for the provision of entertainment (see section 32-5). Of the exceptions to this general rule that are set out in Subdivision 32B, only section 32-35 relating to seminar expenses is relevant to Members (see paragraph 138).

175. Broadly, the 'provision of entertainment' means entertainment by way of food, drink, recreation, accommodation or travel. Entertainment includes business lunches and social functions, but excludes meals purchased during overnight work-related travel (subsection 32-10(2)).

176. A deduction is not allowable for 'donations' made under an arrangement for the specific purpose of enabling the recipient to provide entertainment, or to compensate or reimburse the recipient for the cost of providing entertainment, whether made for fund raising purposes or otherwise (see section 32-75).

177. In Case Y11 91 ATC 184; AAT Case 6641 (1991) 22 ATR 3063, the Tribunal denied a senior officer in the Australian Defence Force, who was involved in negotiations to buy defence equipment, a deduction for expenditure incurred in attending a range of lunches, cocktail parties, dinners and other forms of social contact relevant to the performance of his duties. The officer did direct business on many of those occasions. The Tribunal held that the entertainment provisions (subsection 51AE(4) of the ITAA 1936) operated to deny the claim. It did not matter that the expenditure was directly relevant to business transactions.

178. In Frankcom v. FC of T (1982) 65 FLR 25; 82 ATC 4599; (1982) 13 ATR 636, a magistrate was denied a deduction under the general deduction provisions for the costs of attending a cocktail party hosted by the Bar Association and Law Society and dinners given by the Queensland Stipendiary Magistrates' Association. The taxpayer's duties as a magistrate did not necessitate his attendance at social functions. Hence, the expenditure was not incidental and relevant to the taxpayer's income-producing activities and was of a private nature. It should be noted, however, that this case was decided prior to the enactment of the entertainment provisions.

179. Example: A Member provides light refreshments such as tea, coffee, fruit drinks, cakes and biscuits to constituents when they visit her electorate office. A deduction is allowable for the cost of providing these refreshments to the constituents because we do not consider that this amounts to the provision of entertainment, and the expenditure satisfies the general deduction tests.

180. Example: When entertaining constituents and overseas visitors, a Member often invites guests to join him for a meal, at his expense, in the Parliamentary dining room. The provision of these meals amounts to entertainment and the cost is not an allowable deduction.

181. Example: A Member hosts a barbecue at which proposals for government funding programs are debated and voted on by invited members of his local business community. The cost of this function is not an allowable deduction because it represents the provision of entertainment


Functions and presentations

185. A deduction is allowable for the cost of attending functions where a Member's attendance is for work-related purposes. A deduction is not allowable if a Member is attending a purely social function, such as a football match or family get-together. These expenses are private in nature and may also relate to the provision of entertainment (see Entertainment expenses, paragraphs 174 to 181).

186. A deduction is allowable for the cost of attending a function, such as a gathering of parents and citizens who are representing schools within a Member's electorate, where a 'meal' comprising finger food, such as sandwiches, cakes, party pies, sausage rolls and the like is served. That is, the 'meal' is incidental to the main purpose of the gathering. The principle is not altered if refreshments such as tea, coffee, cool drinks and a glass of wine are also served - the function would not constitute entertainment.

187. A deduction is allowable for the cost of attending a fund raising function if the circumstances are similar to those outlined at paragraph 186, that is, the 'meal' is incidental to the main purpose of the gathering

188. A deduction is not allowable for the cost of attending functions, such as those outlined at paragraphs 186 and 187, if a more substantial meal, perhaps in the form of a sit-down dinner, is provided. This is because the 'meal' is not merely incidental to the main purpose of the gathering - it is entertainment.

189. A deduction is not allowable for the cost of attending a function, such as a charity ball or cocktail party, whether it is held for fund raising or other purposes. This is because the main reason for gatherings of this type is for entertainment.

190. We have based the views outlined at paragraphs 185 to 189 on principles that we have considered in Taxation Rulings TR 97/17, IT 2675 and Taxation Determination 94/55. See also Entertainment expenses, paragraphs 174 to 181.

191. A deduction is not allowable for the cost of goods, such as food and clothing, purchased at fetes and fairs. These expenses are considered to be of a private or domestic nature.

191A. Where a Member pays a premium on an insurance policy that provides coverage for public liability insurance for a function or meeting that is not held in Commonwealth funded electorate offices, a deduction is allowable to the extent the premium relates to his or her work-related activities. A premium paid in relation to a purely social function or event is not allowable.


TR 98/9

(e) The intention or purpose in incurring the expense may be an element in determining whether the expense is allowable

63. An expense is deductible under section 8-1 when the essential character is that of an income producing expense. The essential character is to be determined by an objective analysis of all the surrounding circumstances (see Fletcher & Ors (199 ) 173 CLR 1 at 17; 91 ATC 4950 at 4957 and 4958; (1991) 22 ATR 613 at 622).

64. If the purpose of a study tour or attendance at a work-related conference or seminar is the gaining or producing of income, the existence of an incidental private purpose does not affect the characterisation of the related expenses as wholly incurred in gaining assessable income.

65. Both Ronpibon Tin NL (78 CLR at 59; 8 ATD at 437) and Fletcher & Ors (173 CLR at 16; 91 ATC at 4957; 22 ATR at 621) recognise there are at least two kinds of expenditure that require apportionment under section 8-1. The first is expenditure in respect of a matter where distinct and severable parts are devoted to gaining income and other parts are devoted to some other end. If a study tour or work-related conference or seminar was mainly devoted to a private purpose, such as having a holiday, and the gaining or producing of income was merely incidental to the private purpose, only those expenses directly attributable to the income-earning purpose would be allowable.

66. The second kind of apportionable expenditure is a single outlay that serves both an income-earning purpose and some other purpose indifferently. While the High Court recognised that there can be no precise arithmetical division in such cases, it said there must be some fair and reasonable division on the facts of each case. For example, if a study tour or work-related conference or seminar is undertaken equally for income-earning purposes and private purposes, it would be appropriate to apportion the expenses equally between the purposes.

67. Example: Glenn, a qualified architect, attends an eight-day work-related conference in Hawaii on trends in modern architecture. One day of the conference involves a sight-seeing tour of the island and a game of golf is held on the final afternoon of the conference. As the main purpose of attending the conference is the gaining or producing of income, the total cost of the conference (air fares, accommodation and meals) is allowable.

68. The existence of private pursuits, such as the island tour and the game of golf, is purely incidental to the main purpose and does not affect the characterisation of the conference expenses as wholly incurred in gaining assessable income.

69. Example: Jenny, a doctor, was holidaying in Cairns when she became aware of a work-related seminar on the current treatment of cancer patients. The cost of the half-day seminar was $200. Jenny is able to claim a deduction for the cost of the seminar because it is directly attributable to an income-earning purpose. However, no part of her air fare to Cairns or her holiday accommodation is an allowable deduction.

70. Example: Francesco, a paediatrician, has 2 equal purposes when he decides to attend a five-day international conference on paediatrics in Singapore to be followed by a seven-day holiday in Thailand. The conference package is $2,500 ($1,000 return air fare, $500 for the cost of the conference and $1,000 for accommodation and meals at the conference venue). Francesco paid another $2,000 for accommodation, meals and car hire for the 7 day holiday in Thailand. Francesco is allowed a deduction of $1,500 for the conference cost and the accommodation and meals expenses at the conference. Only half of the return air fare ($500) is allowed as the expense was incurred for two equal purposes, one income-earning and the other private. The other expenditure of $2,000 relating to the holiday in Thailand is private in nature and not allowable as a deduction.

I was not sacked. I resigned. I would not be gagged in the way Fairfax wanted to gag me.


Talkback host Michael Smith told to sign gag order

2ue abbott


BROADCASTER Michael Smith must make an undertaking not to broadcast material from an interview with Bob Kernohan, former president of the Australian Workers Union, before he returns to air on Sydney's 2UE.

Smith was suspended on Tuesday as Fairfax Media and 2UE management investigated material to be aired in Smith's interview with Mr Kernohan, including allegations of misappropriated union funds.

Yesterday, 2UE management issued Smith with a document requiring his undertaking not to broadcast material from the interview unless the station has evidence to support any claims that will be made.

"If he signs the document, he'll be back on air tomorrow (Friday)," said Fairfax's head of radio, Graham Mott. "If he doesn't we'll have to reconsider our positions."

Fairfax Media chief executive Greg Hywood had no qualms over the suspension. "That was Graham Mott's decision, which I fully support."

The afternoon host remains indignant about the neutering of his questioning of alleged misallocation of union funds by Bruce Wilson, with whom Julia Gillard had a personal relationship before she entered politics.

"This country's pretty screwed up if decent, working people can't turn to a free and open media to have their say," Smith said last night.

- See more at: The Australian

Barnaby Joyce expenses

My wedding was on the 4th of December, 2011.

Here is a link to Barnaby Joyce's expense statements for the period.

Here's his Travel Allowance - no claim for that weekend - he paid his own bills.

Barnaby joyce travelling allowance

Here's his air fares - no claim to get down to Sydney - the taxpayer didn't pay.

Barnaby joyce air fares

You know he did Andrew Bolt's TV show that day in Sydney, then went north to Bells.


Here are the Comcar expenses around that time. 

Barnaby joyce comcar

Do you know what he had on?   Did the Fairfax journo?   He rang him up yesterday and asked Barnaby to go by memory.