The Claim
“Chose not to mention a $882 million payout to News Corp. when outlining a $16.8 billion budget black hole. The payout was the single biggest item in the black hole.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The $882 million payout is factually accurate. Rupert Murdoch's News Corporation received approximately $882 million from the Australian Taxation Office (ATO) in December 2013 and January 2014 following a long-running legal dispute over tax deductions dating back to 1989 [1][2].
The payout was indeed substantial relative to the budget deterioration. According to the Australian Financial Review, "The single largest factor in the underlying deterioration of the federal budget announced by Treasurer Joe Hockey in December was a cash payout of almost $900 million to Rupert Murdoch's News Corporation" [2]. The Sydney Morning Herald reported that the payout "all but wipes out $1.1 billion in savings announced by Mr Hockey when he unveiled the mid-year economic and fiscal outlook on December 17" [1].
The $16.8 billion figure is accurate. The December 2013 Mid-Year Economic and Fiscal Outlook (MYEFO) showed a $16.8 billion deterioration in the underlying cash balance for 2013-14 compared to the Pre-Election Fiscal Outlook [3].
Joe Hockey did not mention the News Corp payout when announcing the MYEFO figures. Instead, he attributed the budget deterioration to "a softer economic outlook, downgraded exports forecasts and the previous Labor government" [1].
Missing Context
The tax dispute originated in 1989 - well before the Coalition government. The case related to a complex internal restructure of News Corporation's corporate structure during the 1980s, when the company was dealing with debt from its global expansion. The Federal Court decision in News Corp's favor was handed down on July 25, 2013 - during the election campaign and before the Coalition took office [1][2].
The ATO chose not to appeal the decision. The ATO had a 28-day window to appeal to the High Court following the July 25, 2013 Federal Court decision, but chose not to pursue further legal action. This decision was made during the caretaker period of the federal election campaign [1][2].
Tax settlements are standard practice. The ATO regularly settles tax disputes with large corporate entities. According to the ATO, settlements are a standard part of dispute resolution, with public and multinational businesses accounting for around 92% of tax revenue secured through settlements in recent years [4].
The News Corp settlement was not discretionary spending but rather the resolution of a legal obligation. The government was bound by the court decision; it could not simply refuse to pay.
Source Credibility Assessment
The Sydney Morning Herald and Australian Financial Review are both mainstream, reputable Australian business news sources with established editorial standards. Both Fairfax publications (now Nine) have center-left to centrist editorial positions but maintain separation between news reporting and opinion. Neither is considered overtly partisan in their business coverage.
The reporting was factual and based on publicly available company filings showing the payment. The claim that this was "the single biggest item" in the budget deterioration comes from the AFR's analysis of the MYEFO documents, not from Hockey's explicit acknowledgment.
Labor Comparison
Did Labor governments have similar large tax settlements?
Yes. Large tax settlements occur across governments of all persuasions:
2022 Rio Tinto settlement: The Albanese Labor government announced a $1 billion settlement with Rio Tinto in 2022 - one of the largest tax settlements in Australian history [5]. This was significantly larger than the News Corp settlement.
Historical pattern: The ATO has consistently settled disputes with large corporate taxpayers regardless of which party is in government. Settlements are a standard part of tax administration and reflect legal realities rather than political preferences.
ATO independence: The ATO operates independently of government in litigation decisions. The decision not to appeal the News Corp case was made by the ATO Commissioner during the election campaign period.
Balanced Perspective
The claim contains factual accuracy but misleading framing.
While it is true that Hockey did not mention the News Corp payout when announcing the MYEFO, this omission is somewhat understandable from a political communications perspective - highlighting a massive payout to a media organization that had been critical of your political opponents would have been politically awkward, especially given the timing during the transition to government.
However, the framing that this represents "corruption" (as implied by the category label "abc corruption tax") is misleading. The payout resulted from a court decision on a dispute dating back to 1989. The government had no discretion to avoid paying once the court ruled and the ATO chose not to appeal. This was not a discretionary grant or handout but rather the settlement of a long-running legal dispute.
The claim also omits that the ATO operates independently in litigation matters. The Coalition government did not "choose" to give News Corp this money - they inherited a situation where the courts had ruled in News Corp's favor and the ATO (during the election campaign) decided not to appeal.
When compared to Labor's record, large tax settlements are a normal part of tax administration. The 2022 Rio Tinto $1 billion settlement under Labor was even larger than the News Corp case, demonstrating that such outcomes are not unique to any particular government.
PARTIALLY TRUE
6.0
out of 10
The factual claims are accurate - the $882 million payout occurred, it was a significant factor in the budget deterioration, and Hockey did not mention it when outlining the budget position. However, the framing implies wrongdoing or favoritism that is not supported by the evidence. The payout resulted from a court decision on a dispute predating the Coalition government, not from any discretionary decision by the Coalition to benefit News Corp. The ATO's decision not to appeal occurred during the election campaign, before the Coalition took office. This was a legal settlement, not corruption or partisan favoritism.
Final Score
6.0
OUT OF 10
PARTIALLY TRUE
The factual claims are accurate - the $882 million payout occurred, it was a significant factor in the budget deterioration, and Hockey did not mention it when outlining the budget position. However, the framing implies wrongdoing or favoritism that is not supported by the evidence. The payout resulted from a court decision on a dispute predating the Coalition government, not from any discretionary decision by the Coalition to benefit News Corp. The ATO's decision not to appeal occurred during the election campaign, before the Coalition took office. This was a legal settlement, not corruption or partisan favoritism.
📚 SOURCES & CITATIONS (5)
-
1
Rupert Murdoch tax win blows $880m hole in federal budget
Rupert Murdoch's News Corporation has blown an $880 million hole in the federal budget after winning a long-running battle with the Australian Tax Office over deductions.
The Sydney Morning Herald -
2
News Corp's $882m blew the budget
In the opening days of the federal election campaign last year the ATO found itself in an awkward situation: it had 28 days to decide whether to fight a monster tax win for Rupert Murdoch’s News Corporation.
Australian Financial Review -
3
MYEFO: Devil in the detail as Joe Hockey's budget numbers hit 666.66
Is Joe Hockey overstating the case for economic catastrophe to set the stage for a turnaround in the May budget?
Abc Net -
4
Managing disputes with large corporate groups
Ato Gov
-
5
$1 billion ATO settlement shows the importance of ensuring multinationals pay their fair share
The Australian Government welcomes the settlement reached between the Australian Tax Office and Rio Tinto, which will pay approximately $1 billion in one of the largest tax settlements in Australia’s tax history.
Ministers Treasury Gov
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.