Is Tony Abbott ‘in serious contempt of the House of Representatives’ by not declaring his daughter’s scholarship? Tax specialist Bill Mavropoulos analyses the facts and legislation to conclude he probably is.
Most journalists covering this story have stated that the rules may allow the non-disclosure of this scholarship but ethically it should have still been declared.
These journalists’ rely upon a statement the Prime Minister made as follows:
‘The clerk of the House has further advised that there are no obvious provisions in the Members’ interests that would require the declaration of such a scholarship nor is there any reference in the more detailed notes provided to members for their guidance in making declarations that such scholarships need to be declared.’
If I was this clerk’s boss I would fire him/her for that comment, along with the journalists covering this story and I’ll tell you why.
The issue concerns a Tony Abbott, not his daughter so much.
The Chairman of the Design College is Les Taylor who has admitted to providing a personal recommendation on behalf of Frances Abbott. Les Taylor, a prominent barrister, was a donor to the Liberal Party at the relevant time. The Whitehouse Institute of Design purports to not ordinarily offer scholarships to gain a place into the bachelor of design.
Measures within the 2014-15 Budget impact upon this institution.
Whitehouse Institute of Design press release announcing Tony Abbott attending a function, with Frances. (Image screenshot via whitehouse-design.edu.au)
The parliamentary rule
Standing Order 216 establishes a ‘Committee of Privileges and Members’ Interest’ at the commencement of each Parliament. Members are required to declare ‘Registrable interests’ to it in accordance with a Resolution of the House made on 9 October 1984 as amended, which is included as an appendix to the Standing Orders of the House of Representatives. Relevantly, a member is required under the resolution to make the following disclosures:
1.Registration of Members’ interests
a.within 28 days of making and subscribing an oath or affirmation as a Member of the House of Representatives each Member shall provide to the Registrar of Members’ Interests, a statement of:
ii. the registrable interests of which the Member is aware (a) of the Member’s spouse and (b) of any children who are wholly or mainly dependent on the Member for support, in accordance with resolutions adopted by the House and in a form determined by the Committee of Members' Interests or by the Committee of Privileges and Members’ Interests from time to time, and shall also notify any alteration of those interests to the Registrar within 28 days of that alteration occurring...
The definition of a ‘Registrable interests’ includes the following:
- Registrable interests
That the statement of a Member’s registrable interests to be provided by a Member shall include the registrable interests of which the Member is aware (l) of the Member’s spouse and (2) of any children who are wholly or mainly dependent on the Member for support, and shall cover the following matters:
- the nature of any other assets (excluding household and personal effects) each valued at over $7,500;
- any other interests where a conflict of interest with a Member’s public duties could
foreseeably arise or be seen to arise.
Analysis of whether a breach of the rule has occurred
The Prime Minister has made public statements through a spokesperson to the media that:
Mr Abbott confirmed through a spokeswoman on Wednesday that his daughter had received the scholarship, but said he was not required to disclose it as it did not constitute a gift.
She said Frances Abbott was awarded a scholarship from the institute in 2011 ‘‘based on her application and art portfolio’’.
‘‘Under the Statement of Registrable Interests, a scholarship is not a gift, it is an award based on merit and disclosure is not required,’’ the spokeswoman said in a statement.
‘‘If alternative advice is provided, Mr Abbott will meet the amended requirements.’’
The Spokesperson for the Tony Abbott is referring to the following item that is also a ‘Registrable interests’ under the Resolution:
(k) gifts valued at more than $750 received from official sources, or at more than $300 where received from other than official sources provided that a gift received by a Member, the Member’s spouse or dependent children from family members or personal friends in a purely personal capacity need not be registered unless the Member judges that an appearance of conflict of interest may be seen to exist...
However, with respect, the spokesperson is incorrect, because this is not the only definition of a ‘registrable interest’ provided under the relevant resolution or the disclosure form Parliamentarians fill out. This fact would be well known to members of parliament, but not so well known to the average man on the street — unless, of course, they wade through the rules of Parliament on the APH website.
A scholarship is an award that waives a student’s liability for tuition fees charged for attending an educational institution by that institution or another party not otherwise affiliated with the student. This award leads to the student not having to make the payment in question from another source.
In other words, a scholarship is the provision of a future economic benefit because of the past event of granting that award. The definition of an asset from the ‘Framework for the Preparation and Presentation of Financial Statements’ issued by the Australian Accounting Standards Board is as follows:
‘An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.’
This means that on the grant of the scholarship of over $7,500 by Whitehouse Institute of Design to Frances Abbott is a ‘registrable interest’ fitting the description under 2.i., which was quoted from the Resolution as follows:
‘… any other assets (excluding household and personal effects) each valued at over $7,500.’
Clearly, a scholarship is not a household item or personal effect. It is also presumably not in dispute that Frances Abbott was, at the relevant time, a dependent of Tony Abbott — as acknowledged by the Tony Abbott through other disclosures he has made on his register of ‘registrable interests’.
The only other question to ask when deciding if the rules have been breached is whether Tony Abbott had knowledge at the time the scholarship was awarded (or the intervening period) that it had indeed been awarded.
Of course, Tony Abbott must have known about the scholarship awarded to his daughter. He would easily have deduced from Frances Abbott studying a bachelor of design that because no FEE-HELP liability was being incurred (as disclosed on his ‘Register of Members’ Interests’) some other type of ‘registrable interest’ would necessarily have arisen in respect of her tuition fees.
In other words, he should have known that, in Australia, there is no such thing as a free lunch.
I will therefore leave it to the reader as to whether a breach of these rules has occurred because the scholarship was not disclosed. But be aware that in all the statements being made by the Prime Minister, an independent check should always be performed on the statements made and the rules being breached or adhered to.
The other significant fact in this case is the government’s policy outlined in their most recent budget, which will directly impact organisations such as the Whitehouse Institute of Design. This institution offers only FEE-HELP loans to pay tuition (from their website). This means that the probability of another item satisfying the definition of paragraph 2.n is also high because the interest even were it not an asset could come into conflict with Tony Abbott’s public duties. The relevant Budget measure is reproduced below:
Expanding Opportunity — FEE‑HELP and VET FEE‑HELP loan fee — cessation
The Government will remove the 25 per cent loan fee applied to FEE‑HELP (Higher Education Loan Programme) loans for fee‑paying undergraduate courses and 20 per cent loan fee applied to VET FEE‑HELP loans for eligible full fee‑paying students in higher level vocational education and training courses. Removing the FEE‑HELP and VET FEE‑HELP loan fees will improve equity in the provision of loans to students attending higher education providers as the majority of students who take out HELP loans are not required to pay loan fees. This measure is estimated to reduce revenue by $723.2 million over three years and increase expenses by $22.4 million over the same period.
Penalty on breach
Page 148 of the ‘House of Representatives Practice’ states that any member who:
- knowingly fails to provide a statement of registrable interests to the Registrar of Members’ Interests by the due date;
- knowingly fails to notify any alteration of those interests to the Registrar of Members’ Interests within 28 days of the change occurring; or
- knowingly provides false or misleading information to the Registrar of Members’ Interests—
… shall be guilty of a serious contempt of the House of Representatives and shall be dealt with by the House accordingly.’
The Parliamentary Privileges Act 1987 (Cth) at section 7 details penalties that can be imposed by the House including imprisonment and fine.
Section 4 makes it essential for the offence to be:
'Conduct (including the use of words) does not constitute an offence against a House unless it amounts, or is intended or likely to amount, to an improper interference with the free exercise by a House or committee of its authority or functions, or with the free performance by a member of the member’s duties as a member.'
Tony Abbott is legislating within the education sector and implementing his budget with direct impact upon this particular institution, therefore I will leave it to the reader as to whether this conduct amounts, or is intended or likely to amount, to an improper interference with the free exercise or the free performance by a member of the member’s duties.
What does it all mean?
This essentially means that the likelihood of a breach is not being addressed. I have written an email to the relevant clerk as well as members of Parliament. I have not, at the time of writing, received any response other than read receipts confirming they have read my correspondence.
That is why I have written this article, because the Australian public are not fools and we deserve a considered and rational explanation as to why Parliament feels no breach has occurred and why this person will not be punished in light of the evidence at hand.
Whether a person is the Prime Minister of Australia, a tax specialist or a garbage collector, our countries rules and laws should be administered fairly without fear or favour. It is not clear this has happened in this case.
You can follow Bill Mavropoulos on Twitter @VMavropoulos.
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