States and consumer groups say coming state elections could give opponents of the scheme the numbers to defeat it

State governments and consumer groups are accusing the Coalition of deliberately delaying “healthy star” food labelling until two state elections are held that could give opponents of the scheme the numbers to defeat it on the federal and state ministerial council responsible for its development.



South Australian health minister Jack Snelling has written an angry “please explain” letter to the federal assistant health minister, Fiona Nash, about her controversial intervention to remove a website for the new food labelling system – an action that has embroiled the minister and her chief of staff in allegations of conflict of interest.



Having originally said the chief of staff, Alastair Furnival, had “no connection whatsoever” with the lobbying company Australian Public Affairs (APA), Nash has conceded that Furnival, who intervened to pull down the website for the health star scheme, that has been opposed by parts of the powerful food industry, 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 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 health minister Peter Dutton. Guardian Australia has 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 “up to industry” whether the June 2014 start date for the new system was met.

The leader of the opposition in the Senate, Penny Wong, accused Nash of “desperately ducking and weaving and hiding” and said “the prime minister was not prepared to back his minister in”.



In House of Representatives question time on Thursday, Tony Abbott took questions on the issue on notice.

Some states, and consumer groups, believe the Coalition is deliberately delaying the introduction of the scheme until after state elections in Tasmania and South Australia on 15 March that could change the narrow vote in support of the scheme on the federal and state ministerial council that is responsible for its development, and allow it to be scrapped or watered down.



Guardian Australia understands that at the last meeting of the state, federal and New Zealand ministers responsible for the new system, at which Nash has conceded Furnival did not declare a conflict of interest, Nash argued that the scheme should be subject to a full regulatory impact statement (RIS).



Five states are understood to have argued against that idea on the grounds that the scheme was voluntary, and that an RIS would inevitably delay its implementation. Nash lost a vote on the proposal 5-4. She was backed by Victoria, NSW 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 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.



Guardian Australia understands 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.



Guardian Australia further understands that on Wednesday responsibility for the labelling scheme was moved from the public servants who have dealt with it for several years to the Health Department’s first assistant secretary, Nathan Smyth.

In his letter, sent on Wednesday, Snelling “expresses concern” that the minister took the site down 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”.

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”



Tracy 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.



But veteran Labor senator John Faulkner said the revelations represented “serious negligence in her conduct of her ministerial responsibilities” and a “very serious breach”.



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.

