The art of financially milking pearls of wisdom that’s an ATO irritation
By any fair telling, John Menadue has had an extraordinary career.
He was once Gough Whitlam’s private secretary. After Whitlam became PM, he was appointed secretary of the Department of Prime Minister and Cabinet, the head of the federal public service.
Then when Malcolm Fraser toppled Whitlam, the new Liberal PM sent Menadue to Tokyo to be Australia’s ambassador to Japan.
In between all that, he was for a while one of Rupert Murdoch’s top executives in Australia. Later in the 1980s he was the chief executive of Qantas.
The 91 year old’s most recent project has been nurturing the online media outfit, Pearls and Irritations, which he founded in 2013. It is the kind of left-wing publication loved by American linguist Noam Chomsky (he’s a reader, according to Menadue) and the Chinese Communist Party (it got repeated shout-outs from the Chinese foreign ministry while we were posted in Beijing).
However, it is currently operating under a tax cloud, as was confirmed late on Tuesday evening during Senate Estimates in Parliament House.
The hostility of Pearls and Irritations’ coverage of Israel since October 7, 2023 has earned it a number of new critics. There are now more pieces on Israel-Palestine (the subject of 1728 archived articles, including an odious piece by convicted sex offender Scott Ritter) than boosterish pieces on China (the subject of 1359 pieces, including one scorning report of the persecution of Uighurs in Xinjiang written by a hypnotherapist from the fringes of Newcastle).
And its coverage of the arts? All up, there are 188 pieces in its archives.
It’s an imbalance that has drawn attention to its curious – and financially useful – status as an “artist” by the federal government’s Australian Cultural Fund. Its artistic status has allowed Menadue’s website to offer tax-deductible status to its donors.
It has been a cute workaround for Pearls and Irritations, a not-for-profit that has been unsuccessful in its attempts to get “deductible gift recipient” status from the Australian Taxation Office.
That status would allow all donations of $2 and above to be tax deductible (instead, the website has only been able to use the Australian Cultural Fund workaround). Creative Australia chief executive Adrian Collette – whose government-funded outfit administers the fund and whose staff coached Menadue on how to make his website seem more artsy – was asked about that status at Senate Estimates on Tuesday evening. His answers sounded a lot like: The jig is up.
“We have sufficient reasons now to question Pearls and Irritations about how the money raised was invested,” Colette said.
He said Creative Australia had sought advice from commissioner Rob Heferen’s Australian Taxation Office, but declined to comment further on any future outcome.
So how important is its tax-deductible status?
The newish editor and CEO of Pearls and Irritations, Catriona Jackson – who earlier this month was in China for a Belt and Road-branded conference – declined to comment.
Happily, the media outfit lodged its latest financial accounts with the corporate regulator this week, so Margin Call can do more than guess.
It shows the 2025-26 financial year was a good one for Pearls and Irritations, with total income of $972,018 which was up from $751,805 in the previous financial year.
Much of that income – $416,954 – was from tax-free donations through Creative Australia. Reported high-profile donors included Kooyong teal Monique Ryan, Climate 200 convener and the teal movement’s chief fundraiser, Simon Holmes a Court, and his mother, businesswoman Janet Holmes a Court.
Expenses were also up this past financial year as staff were hired to replace Menadue and his late wife, Susie Menadue.
Among them was Jackson – previously a staff member to now exiled Labor left stalwart Kim Carr and more recently heading up the higher-education lobby, Universities Australia – who was paid $142,747.
Even with the increasing staff costs, the Canberra-based media outfit was comfortably in the black, making a net profit of $170,391.
This current financial year could be more challenging if the tax-deductible status is permanently revoked.
While the Creative Australia dispute wasn’t mentioned in the financial lodging, the opening section on the media company’s strategies to “achieve objectives” includes “additional arts cultural content”. Don’t dream it’s over!
Judging by its homepage on Thursday, the whole arts thing is still very much a work in progress.
The front of its website has multiple reports on Palestine and Israel, a smattering of Aukus denunciations, a note from Jackson on her recent trip to Nanjing (which opens: “I’m not naive…”) and, curiously, the republishing of a column by the Sydney Morning Herald’s economics editor, Ross Gittins.
And the number of pieces on the homepage about the arts? Zero.
