Two weeks ago, in ‘The FIGJAM philanthropist’, Independent Australia discussed Prime Minister Malcolm Turnbull’s claim, reported in the Daily Telegraph, that he donates his entire prime ministerial salary to “charity”.
This claim was used, of course, by the Government to counter television commercials run by Labor that Turnbull is so rich he is “out of touch” with how ordinary people live and the financial pressures they're under.
By “charity”, though, Turnbull didn’t mean the Red Cross, the Heart Foundation or St Vincent de Paul. No, he meant his own Turnbull Foundation, a private ancillary fund (PAF) set up in 2001 under Howard Government legislation, which has all the tax benefits of an actual charity, but only needs to donate 5% of its value each year to real charities doing good works.
As reported in ‘FIGJAM philanthropist’, donations into PAF’s are entirely tax deductible and these private foundations have been flagged by the Tax Office as at a high risk of tax evasion.
You can read FIGJAM (Part One) in full HERE.
Now it might be that Turnbull’s PAF donates a lot more of than the statutory minimum 5% each year to good causes, despite the long-term historical average donation per annum from these funds being only 8% of value. It is impossible to tell, because the Foundation’s reports have been withheld from public view since Turnbull became Prime Minister in 2015.
"there is no strict regulation on the way donations to charities are spent....of more than A$95 billion spent by charities in 2014, A$51 billion was spent on employee expenses, a bit over A$4 billion on grants and donations and remainder on “oher”. https://t.co/NY5b72L0vW pic.twitter.com/0GsikqpbGP— Dave Donovan (@davrosz) July 12, 2018
But don’t just believe us, because on the same day as our editorial, behind The Australian’s (usually merciful) paywall, Christine Lacy, within her Margin Call column, provided a similar summary of Turnbull’s so-called “charitable” endeavours, but with a few tantalising extra details.
Lacy began the article, ‘A veil has been drawn over Turnbull foundation largesse’, in accordance with the News Corp’s style-guide, utilising the essential “Shorten class warfare” trope [IA emphasis] before moving on to the substance:
In hitting back at Opposition Leader Bill Shorten’s attempt to fire up class warfare on the election battleground, Malcolm Turnbull wants you to know that he gives away the equivalent of every cent he earns to charity.
Our multi-millionaire leader does it via his and wife Lucy Turnbull’s appropriately named Turnbull Foundation….
The Turnbulls’ foundation is a registered charity and all gifts it makes are tax deductible — a nice offset to the top personal tax rate that our PM surely pays on his circa $550,000-a-year salary.
But the Turnbulls, who debuted on the nation’s Rich 200 List in 2009 (before it hit the big time as the Stensholt Index) with a stash of $187 million (but who have since dropped off, since the most recent cut-off is $387m), want voters to know just enough about their personal giving to make the right electoral impression.
There are two important points to note in the above.
Firstly, it is Turnbull himself who wants us to know he donates his salary to charity. In the IA article, we speculated that Turnbull was the source of the leak; now Lacy appears to have confirmed that assumption. Given the initial story was reported in The Australian's News Corp stablemate, the Daily Telegraph, we can be pretty confident Lacy would know.
This makes sense, because as Malcolm said when announcing the establishment of the fund to much fanfare 17 years ago:
“I’ve always been a philanthropic person…. [Lucy and I have] always been very generous.”
Now that the details of the Foundation’s alleged philanthropy are being suppressed, it is obvious he would need to find other ways to trumpet his generosity — it is simply the FIGJAM way.
Secondly, Lacy states that Turnbull only donates the “equivalent” of his salary to charity (AKA private fund). But what does “equivalent” mean? Does it mean his full $527,852 prime ministerial salary (which just went up again on July 1 just as more penalty rates for Australia’s lowest paid workers were abolished) is salary sacrificed and direct debited into the Foundation? Does it mean his after-tax salary is donated at the end of the financial year? Does it mean he donates his salary plus his generous MP allowances? Or does “every cent” mean something else entirely — maybe some sort of “horizontal fiscal equivalence”?
Even the Liberal Party’s enthusiatic cheer squad at The Australian have no idea, as Lacy’s article makes plain [IA emphasis]:
Historically, before the Turnbulls became the first family, the foundation’s accounts were accessible on the public record.
The Australian Charities and Not-for-Profits Commission holds a registry of charitable organisations in the interests of transparency and good governance.
But — would you believe — despite the PM wanting The Daily Telegraph readers to know that he’s a good guy with more dimensions than just Mr Harbourside Mansion, we can no longer find any record of filings that would reveal much about the charity’s latest financial ins and outs.
The last records we could find (way back in 2015) showed the Turnbull Foundation in the black with $6.2m cash in the bank, plus $4.2m invested in bonds and international stocks.
Recipients of donations have included the Biennale of Sydney, which has been given $25,000 (Lucy was a director), the Australian Chamber Orchestra ($20,000), Rhodes scholarships in Australia ($200,000), Sydney’s Scots College ($10,000) and the Australian National University ($70,000).
So when the PM says he now gives the equivalent of his salary to his foundation, we guess we’ll just have to take his word for it.
Take Malcolm’s “word for it”, implores The Australian.
The Turnbull Foundation ABN 72 750 851 308 is run as an "Other Trust" according to ASIC It is not registered on the ACNC website. Is this a clever way of avoiding transparency & public scrutiny of financial records?#LibsLieAlways https://t.co/SpNUHytU63 pic.twitter.com/maMov8hYVa pic.twitter.com/in9sFYCnu3— Nart Man (@Nartster) June 28, 2018
Some might find it rather difficult to take much of what Malcolm says at face value. Especially given what we know about his financial history.
For instance, in 2015, Turnbull was outed as having major investments in the tax haven of the Cayman Islands. The two hedge funds the PM had invested in were registered at an address then U.S. President Barack Obama described as the "the biggest tax scam on record".
The following year, the PM was named in the Panama Papers as a director in a company set-up and administered by Mossack Fonseca — the Panamanian law firm that ran an notorious worldwide tax avoidance industry through a network of offshore tax havens, before closing down this year in utter disgrace.
Moreover, it is hard to reconcile Turnbull donating his “every cent” to charity when his previous actions appear to reveal a man determined to screw “every cent” he can out of the Australian taxpayer.
In 2007, for example, six years after establishing the Turnbull Foundation, Turnbull was revealed to be using his travel allowance to claim $175 a night to cover rent to stay at a Canberra house owned by his wife (and fellow Turnbull Foundation director), Lucy Turnbull.
In responding to these reports, Turnbull was unapologetic, telling the ABC he was "entitled" [IA emphasis]:
I am entitled to an amount for every night I spend in Canberra.
Where I stay, whether I stay in expensive accommodation, or in cheap accommodation, in my own apartment or an apartment belonging to my wife, in a hotel or a serviced flat is immaterial, you get the same amount and where you stay is of no concern to the Government.
And, as these things are wont to do, it gets even worse. In 2015, it was revealed that Turnbull had claimed the princely sum of $60 in six different claims for Lucy to stay with him in Canberra.
From the Daily Mail, 17 September 2015:
Despite an estimated wealth of $150 million, the Prime Minister claimed a $10 travel allowance for his wife Lucy to join him at his $2 million waterfront penthouse in Kingston.
In the reporting period from July to December 2014, the then Communications Minister found time to submit five individual claims totalling a meagre $60 for his wife to join him.
Yet this Scrooge McDuck says he is donating “every cent” of his salary to charity? Are we really meant to take this claim seriously? Here at IA, we’ll believe it as soon as we see some hard evidence to that effect.
And likewise, we would like to think the Turnbull Foundation is not a giant slush fund and tax lurk, but until we see some actual proof it ain't, we will reserve our judgement.
In summary, it is time for Turnbull to release his financials.
Subscribe to Independent Australia HERE.
The Turnbull Foundation pic.twitter.com/wbIHWOqqdg— jonnybpoodump (@jonnybpoodump) June 28, 2018