Clive Palmer
THE flagship investment companies controlled by self-proclaimed
billionaire Clive Palmer have not paid company income tax to the
Australian Taxation Office over the past six financial years.
Analysis by The Weekend Australian of cashflow statements
and other filings from the statutory accounts of Mr Palmer’s
Mineralogy Group, QNI Resources and QNI Metals, which are ultimately
owned by the leader of the Palmer United Party, reveal that the tax
office has financially propped up the resources tycoon’s companies in
recent years.The tax office has paid Mr Palmer’s companies a total of $1.66 million since 2008, according to the audited cashflow statements.
The $1.66m does not include a separate windfall payment of $45m that the tax office gave Mineralogy last September after Mr Palmer successfully argued that his company had paid too much capital gains tax on a Chinese iron ore deal in 2007. Mr Palmer’s senator-elect from Tasmania, Jacquie Lambie, has called for Australia’s banks to pay more tax. Australia’s big four banks, some of the most profitable in the world, paid a combined $36.7 billion in tax in the past four years. Commonwealth Bank, the nation’s largest, paid $3bn in the financial year to June 30 and about $10.6bn in the past four years.
The Weekend Australian did not receive a response to requests for comment from Ms Lambie about Mr Palmer’s companies not having paid the tax for six years.
Senior sources have told The Weekend Australian that the ATO’s $45m payment to Mr Palmer came at a crucial time, as his companies were in significant financial stress and shedding staff due to mounting losses and escalating expenses, including those run up by his costly PUP campaign before the federal election.
The Federal Court in Perth was told by senior lawyers for the Chinese government-owned company Citic Pacific two weeks ago that Mineralogy wrongfully siphoned more than $12m from his Chinese business partners last August and early September, with some of the funds allegedly used to cover political expenses for PUP’s campaign.
The matters are likely to be referred to police. Mr Palmer has denied any wrongdoing.
Statutory filings by the three major companies controlled by Mr Palmer, who wants to be prime minister and intends to use PUP’s senators-elect to block key parts of the federal budget, include consolidated results of numerous entities and businesses such as a loss-making nickel refinery in Townsville and a golf resort and dinosaur park, formerly the Hyatt Coolum.
Mr Palmer’s companies have not paid company tax because their business operations have not been profitable overall, according to the cashflow statements, profit-and-loss statements and balance-sheet positions since 2008 for Mineralogy, and since 2009 for QNI Resources and QNI Metals.
The resources tycoon’s company losses have been so significant that they have accumulated “deferred tax assets” amounting to almost $130m ($89m in QNI Resources and about $41m in QNI Metals), which can be used to avoid paying tax if there are actual profits in coming years.
The cashflow statements show that the last time Mr Palmer’s companies paid any significant company tax was 2010 — when about $6m went to the tax office. But almost all of it was returned by the ATO two years later.
Separate to company income tax, Mr Palmer’s nickel group was forced to pay $6.8m in carbon tax and penalty interest to the federal government’s Clean Energy Regulator earlier this year after he had refused to pay and missed payment deadlines.
Mr Palmer has Treasury to thank for one of his largest cash windfalls, which he received from the tax office in early September, shortly before the federal election.
Mineralogy’s most recent set of accounts, audited by Mr Palmer’s accountants Ernst & Young in Brisbane and released on December 20, show the tax office paid the company $35.1m in a tax refund and an additional $9.8m in interest in September.
The $44.9m total payment came after Mr Palmer’s company launched a Federal Court appeal to the Commissioner of Taxation in May last year, in which he argued that he paid too much tax in 2006 and 2007.
The ATO had rejected Mineralogy’s claims that it had overpaid.
The Federal Court dispute revolved around the most significant tax that Mineralogy has ever paid — a whopping $63m in May 2007 and $3.5m in late 2008 — as a result of an assessment of a $260m capital gain from an iron ore deal with Chinese giant Citic Pacific.
Mr Palmer’s legal-financial advisers, PricewaterhouseCoopers, persuaded the tax office last year that Mineralogy’s capital gain seven years ago should have been assessed at a much lower amount.
The legal row was formally discontinued in the Federal Court on September 9 with a deed of settlement.
Citic Pacific and Mr Palmer’s companies are now locked in numerous legal battles over royalties and control of the port of Cape Preston.
Mr Palmer did not respond to questions yesterday.
Queensland Deputy Premier Jeff Seeney, who described Mr Palmer as a “crook’’ in state parliament a fortnight ago, said yesterday: “It’s strange for Clive Palmer to be offering advice on the country’s finances when he can’t even make his own businesses profitably enough to pay taxes.
“If he was in power, he’d do to the tourism industry what he’s done to his own tourist resort on the Sunshine Coast — run it into the ground — and he’d do the same thing to our resources sector.’’
The losses and legal fallout arising from China’s largest investment in Australia have resulted in top-level political briefings of China’s political leaders and efforts by Tony Abbott to placate Citic Pacific.
However, the relationship between Citic Pacific and Mr Palmer is worsening and deteriorated further with the allegations in the Federal Court two weeks ago that Mineralogy wrongfully spent millions of dollars belonging to the Chinese last year.
Financial records indicate that on August 8, a month before the federal election, an amount of $10m, which had been deposited by the Chinese to be used for maintenance on their iron ore port, was taken from an account controlled by Mineralogy, and a further $2,167,065 was withdrawn on September 2.
The second withdrawal occurred seven days before the notice of discontinuance was filed in the Federal Court in relation to Mineralogy’s appeal to the tax office, suggesting that at the time of the withdrawal of the $2,167,065 Mr Palmer was yet to receive the large refund of almost $45m from the tax office.
In the Federal Court a fortnight ago, Citic Pacific’s lawyer, Andrew Bell SC, raised the need for a “searching inquiry’’ and a “forensic accounting exercise’’ to track down the allegedly missing money.
Mr Palmer told the ABC’s Lateline that there was no substance to the concerns of the Chinese and that the story was a beat-up by the “Murdoch press’’, which includes The Weekend Australian.
Mineralogy’s most recent audited accounts from December record a net group loss after tax of about $104m.
The Mineralogy annual report stated: “The company and the group recorded significant losses for the 2013 financial year. This is largely due to the derecognition of the minimum royalties receivable from (Citic Pacific) as a result of the ongoing legal dispute with these entities.’’
Mr Palmer has previously estimated his wealth in the billions of dollars and falsely claimed last year that he was being paid $500m a year in royalties by Citic Pacific.
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