$1 billion Australian tax payout for Murdoch firm: reports

SYDNEY - Rupert Murdoch's Australian operations pocketed an Aus$882 million (S$1000 million) tax rebate from the new conservative government, reports said Monday, blowing a major hole in the country's budget.

The massive payout to News Corp. - one of the largest ever made by the Australian Taxation Office (ATO) - related to complex shuffling of assets through local and overseas businesses in 1989 that netted the company a Aus$2 billion tax deduction, according to The Australian Financial Review.

According to the AFR, the payout was a significant element of the Aus$17 billion spending blowout unveiled by the new government in December.

In July 2013 Australia's Federal Court ruled that News Corp ought to be allowed to claim the deduction and the ATO had 28 days to decide to appeal.

The business daily said the ATO decided against such a move, as Murdoch's Australian newspapers waged a concerted campaign against the then-Labor government, openly urging voters to remove them from office with a series of scathing headlines.

Then-prime minister Kevin Rudd claimed Murdoch was agitating against Labor in exchange for concessions from the conservatives, who went on to win power in September 2013, the AFR said.

Prime Minister Tony Abbott refused to comment on the allegations Monday, saying the payout "is something which is news to me and I'll have to take that one on notice".

The ATO would not speak about the News Corp case but said it followed strict procedures when deciding whether to lodge an appeal and sought "external legal counsel opinion on the prospects of success".

"Careful consideration is given to a range of factors, including the costs to all parties of proceeding and the importance of the particular case to clarifying the law for the benefit of the wider community," an ATO spokesman told AFP.

Other major spending included an Aus$8.8 billion cash injection to the central bank and Aus$1.2 billion for a government's military-led crackdown on people-smugglers.

Murdoch's News Corp is the dominant media player in his native Australia, controlling 70 per cent of capital city newspaper circulation. The firm also has significant online and television assets.