The drama over the payout, one of the largest cash payments made by the Tax Office, played out behind the scenes during the federal election.
On July 25 the Federal Court of Appeal ruled against the Tax Office to allow News Corp to claim a $2 billion deduction from a series of paper shuffles between subsidiaries.
At the time, The Australian Financial Review speculated the win would be worth up to $600 million in future tax benefits, but interest charges had pushed the payout far higher.
The Tax Office was deciding whether to appeal against the judgment as News Corp newspapers launched a ferocious attack on the government, kicking off with the Daily Telegraph’s headline on August 5, 11 days after the court judgement: “Kick this mob out.” In the following days, Labor leader Kevin Rudd would claim that News Corp was running a virulent anti-government campaign in exchange for concessions from the Coalition.
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