The Australian Greens Leader, Senator Christine Milne, addresses the senate on the Treasurer's failure to generate revenue by tackling corporate tax evasion.
Senator MILNE: I move:
That, in the opinion of the Senate, the following is a matter of urgency:
The Treasurer's failure to tackle corporate tax evasion.
Australia has a revenue problem. It is not a budget emergency; it is a revenue problem. The biggest contributor to the revenue problem is the failure of corporations in Australia and multinational corporations to pay an appropriate amount of tax. The Treasury secretary, Mr Parkinson, in a speech just in the last few days, hit the nail on the head. He strongly put to Australian business that there had been a complete and utter lack of leadership on taxation reform from business. He said that the ethos was 'take from the citizenry at large and give it to us'. That is very much exactly what we see from multinational corporations operating in Australia and big business in Australia. Frankly, the Abbott government facilitates big business in going about this ethos of 'take from the citizenry at large and give it to us'.
The classic case we have seen in the lack of leadership on corporate tax was, of course, the Abbott government's decision to abolish the carbon price. This is a case of 'take from the citizenry and give it back to us' the big polluters in Australia. But there was also the mining tax-get rid of the mining tax but take out of the pockets of the citizenry all of those measures that the mining tax was to fund and that have, of course, been kept. It is Prime Minister Abbott's choice to spend more than $5 billion in the next two years partly to support the war in Iraq and partly to facilitate the deal that the Prime Minister's office has done with Mr Palmer from the Palmer United Party to abolish the mining tax. So do not come in here and tell us that there is a problem caused by anyone other than the big end of town saying 'take from the citizenry at large and give it to us.'
Tax evasion absolutely comes into this. Tax minimisation, in terms of the loopholes, is one thing; then there is outright tax evasion. Globally, everybody knows that multinational corporations are essentially just moving their taxable income around the world so as to avoid paying tax. We have seen it in absolutely blatant terms from companies like Google, for example and Apple. In fact, there are billions of dollars that they have not been paid tax on, because they have been able to move their income around the world.
The G20 was supposed to deal with this. At the G20 there was an agreement that exchange of information automatically between G20 countries would occur by 2017. What did Australia do? Australia pushed for having us be subject to completing the necessary legislative procedures by 2018-to push it out by a year. Why did we do that? Why weren't we one of the early movers? It is no use the Treasurer standing up and talking about tax evasion and then getting himself along to the G20 and pushing out Australia's obligation in order to give business another year. When asked why he had pushed it out and why Australian could not be one of the early movers, he said that it was because big business in Australia was not prepared to agree to it and get ready in the time frame. That is exactly what we have going on.
What do we need to do? We need to require large corporations to provide more public disclosure and transparency. That is the first thing, because nobody is aware of the extent to which they are hiding their capacity to pay tax, of where they are hiding their money or, in fact, of how they are minimising their tax. We need to increase the fines for tax evasion and extend laws to effectively cover the full range of corporate tax avoidance strategies. We need to eliminate or restrict the use of stapled securities for tax arbitrage according to the global norms. We need to ensure that the Australian Taxation Office is adequately funded and staffed. The Treasurer stands up and says that he wants to make a focus on tax evasion but then sacks from a tax office the very people who might actually be able to do the work. And where do they go? They get picked up by KPMG, PricewaterhouseCoopers, Ernst & Young and Deloitte. And what do they do over there? They advise their corporate clients how to minimise and avoid tax. You cannot tell me that a government that was serious about cracking down on tax evasion and tax minimisation and about ending the loopholes would sack the very people in the tax office whose job it was to do that work, only to see them go across to those corporations that are making a fortune out of assisting those very same companies in avoiding their tax obligations.
If the government were serious about this, it would also have been leading the G20 to adopt tough and effective global rules to combat corporate tax dodging. But instead of that we have just had that huge dump of information about what has being going on in Luxembourg, for example, with corporations from around the world putting their money into the procedures overseen in Luxembourg. Now we are expected to believe that these companies are in any way serious.
There have been many stories written lately as to ways in which this could be done, but I have in the Senate here a 'publish what you pay' piece of legislation. I am glad to say that a delegated committee has just passed this legislation in the House of Commons and I would like to get support for it here in Australia. It is a legally binding requirement for large companies involved in natural resource extraction to provide in their annual reports details of the payments they have made to governments across the world on a project-by-project basis. We need to know what deals have been done with these governments and how they have been paid off, because we know that when that money goes into those poorer countries it goes into the pockets of the officials to give them especially good rates on everything and to avoid their responsibilities. In the absence of strong democratic institutions and stronger governance the people of those countries are unable to hold corrupt officials to account and those officials siphon off the money. We are going to see exactly that when the Australian government pays Cambodia. Ministers in the Hun Sen government will have that in their back pockets. There is no way that it will go to help refugees on the ground there.
But the first thing you could do-a really obvious fix for tax dodging-is to make it mandatory for all foreign subsidiaries to be disclosed in financial statements. The Tax Justice Network, for example, noted in 2013:
BHP had 462 subsidiaries in 49 countries; tax payments were disclosed in 12 countries, but not in the other 37 countries with 128 subsidiaries. Rio Tinto had 926 subsidiaries in 71 countries; tax payments were disclosed in 28 countries, but not in the other 43 countries with 111 subsidiaries.
So why wouldn't you require these corporations based here to actually nominate their subsidiaries so you can see where they are transferring their taxable income in order to avoid tax?
We are also told that there is going to be a crackdown on tax havens, but we have yet to see that. Of course, we saw at last year's federal election in the caretaker period when the tax office chose not to challenge the court ruling on the $880 million rebate being paid the from the tax office to Rupert Murdoch's corporations. To this day I have not been able to find out who authorised the tax office to decide not to challenge that in court. Why should Rupert Murdoch's companies be able to get away with what they have managed to get away with, and that is all money coming out of the budget. If we want to fix things in Australia we need to raise revenue and that means a serious effort to crack down on tax evasion; not take it out of the pockets of the poor, the sick and the unemployed. The big end of town is taking from the citizenry and they intend to keep on doing it. We will stand up against it.