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14 February 2014

Fiona Nash accused of misleading Senate again over food rating scheme

Fiona Nash has been accused of delaying the food labelling scheme until after the Tasmanian and South Australian elections

Assistant health minister's claim of 'unanimous decision' to perform cost-benefit analysis before launch is disputed.

The assistant health minister, Fiona Nash, stands accused of misleading the Senate for a second time over her controversial intervention to remove a website for the new 'healthy star' food labelling system, a move that has embroiled the minister and her chief of staff in allegations of conflict of interest.

Nash told the Senate one reason she and her chief of staff, Alastair Furnival, had intervened to pull down the website was that a federal and state ministerial forum in December had taken 'a unanimous decision to do an extensive cost-benefit analysis' and it was therefore 'premature to have the website live until this report was completed'.

But the minutes from that forum meeting confirm that Nash unsuccessfully demanded a new regulatory impact statement be undertaken before the new labelling system took effect and then unilaterally informed the meeting she would be asking her department to undertake a cost-benefit analysis.

Minutes of the meeting state the forum considered motions relating to conducting a RIS which was not agreed and that Nash then informed the forum she would direct her department to do a cost-benefit analysis.

Five states are understood to have opposed the minister's proposal on the grounds an RIS would inevitably delay the scheme's implementation. Nash lost a vote on the proposal 5-4. She was backed by Victoria, New South Wales and the Northern Territory. Among those successfully opposing her were the Labor governments in Tasmania and South Australia that are about to face elections.

The leader of the opposition in the Senate, Penny Wong, said the minutes clearly suggested Nash had misled the Senate.

In a statement issued late on Thursday, Nash continued to insist the forum had unanimously agreed to a cost-benefit analysis but conceded her proposal for an RIS was not agreed.

The bitter fight over the minister's intervention to take down the website is fuelled by a belief among state governments and consumer groups that she is deliberately delaying the healthy star food labelling - opposed by sections of the food industry - until after the Tasmanian and South Australian elections, when conservative victories could give her the numbers to defeat it on the council.

The Tasmanian health minister, Michelle O'Byrne, told Guardian Australia Nash had no right to take down the website and was clearly hoping if she delays long enough she will get a different outcome.

South Australia's health minister, Jack Snelling, has written an angry please explain letter to Nash, about her controversial intervention.

Nash has already been forced to correct her original statement to the Senate, that Furnival had no connection whatsoever with the lobbying company Australian Public Affairs (APA).

Nash later conceded Furnival, who intervened to pull down the website, was a shareholder in the lobbying firm owned by his wife, Tracey Cain.

APA has acted for Cadbury's parent company, the snack food giant Mondelez, as well as soft drink industry group the Australian Beverages Council. Furnival was once chairman of APA and chief economist for Cadbury, but Nash insists there is no conflict of interest because he receives no income from a shareholding in his wife's lobbying firm and the firm has promised not to lobby her or the health minister, Peter Dutton. It has been established he remains a director of one of the firms that makes up the APA partnership.

Targeted for a second day during Senate question time on Thursday, Nash refused to say when she had learned of her staffer's shareholding in the firm, or when she told the prime minister's office about it.

All information around my chief of staff was given to the prime minister's office in accordance with appropriate timing, she said, but would not be drawn on when that appropriate time was. She said it was now up to industry whether the June 2014 start date for the new system was met.

The food and grocery industry has criticised the scheme for being too expensive and confusing, but has also worked with governments and consumer groups on the implementation of the new system.

Just hours after the website went live last week, as scheduled and widely anticipated by groups involved, Furnival rang the department to have it taken down. When staff refused, on the grounds that they were under orders from the ministerial forum rather than the minister, Furnival went to the department's senior executive ranks to intervene.

On Wednesday responsibility for the labelling scheme was moved from the public servants who have dealt with it for several years, and who refused to pull down the website, to the Health Department's first assistant secretary, Nathan Smyth.

In his letter, sent on Wednesday, Snelling expresses concern that the minister took down the site without reference to the state ministers who are jointly responsible for it, and argues that, since the system is voluntary, and since it had been agreed by the ministerial council I would appreciate your urgent response as to why the website has been taken down, and I ask that it be quickly reinstated.

The Public Health Association chief executive, Michael Moore, said he believed Nash was engaging in delaying tactics to wait until after state elections that might mean the ministerial council takes a new form.

That would fit with an industry agenda to prevent or delay the uptake of a system that will allow parents to know how healthy the food is that they are putting in their children's lunchboxes. The food industry doesn't want to mount the direct argument against a system consumers want, but they are trying to undermine it quietly, he said.

Research by Choice showed 62% of consumers want the current daily intake guides replaced with the health star rating, and the consumer group says its research also shows the existing daily intake scheme is ineffective.

Choice campaigner Angela Cartwright said her organisation was not convinced by the government's explanations for pulling down the website, and we know the food and grocery council is reluctant to implement this scheme.

A spokesman for the food and grocery council said the council believed the new system was not yet ready to be implemented, that a cost benefit analysis was needed before it started and that the evidence that this system will change consumer behaviour is not yet settled.

Tracey Cain, Furnival's wife and APA owner, said in a statement on Wednesday that since his resignation and appointment as a chief of staff with a commonwealth minister [Furnival] has drawn no salary, dividend or profit share from this company. Following his appointment, the process began to transfer Alastair's shareholding to me as his former co-director. Since last September, Australian Public Affairs has not made representations to either health minister, their offices, or the Health Department; and has made no representations to any other minister of the commonwealth in relation to the health portfolio.

The government's standards for ministerial staff require that staff divest themselves, or relinquish control, of interests in any private company or business and/or direct interest in any public company involved in the area of their ministers' portfolio responsibilities.

Nash also conceded that Furnival had not declared any conflict of interest at the meeting of federal, state and New Zealand ministers on 13 December, which Nash chaired and Furnival attended.

Yes, I can confirm it was an item on the agenda. Yes, I can confirm that I was chairing the meeting. Yes, I can confirm that my chief of staff did not declare an interest.

I was fully aware of the relationship between my chief of staff, APA and his previous role within Cadbury and the confectionery industry, my chief of staff complies with proper internal standards under the statement of standards for ministerial staff, Nash said on Wednesday.

The rules for the ministerial council state that members and supporting staff have a responsibility to disclose and take reasonable steps to avoid any conflict of interest, real or apparent, in connection with their membership or support of the Forum or its subordinate bodies.

Nash, who said she had consulted the prime minister's office on the matter, insisted Furnival's APA connections did not represent a conflict of interest.

APA is a partnership registered with NSW Fair Trading. NSW Fair Trading records show APA's partners are three companies, APA Pty Ltd, Strategic Issues Management Pty Ltd and Centre for Litigation Communications Pty Ltd.

Australian Securities and Investment Commission documents show that Furnival is a director of Strategic Issues Management Pty Ltd along with Tracey Cain, who is also secretary.

The prime minister, Tony Abbott, took 'on notice' questions about the affair on Thursday.

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