Steve Irons (Swan, Liberal Party) Share this | Hansard source

I too rise to speak on the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 and the amendment to the second reading moved by Dr Leigh. I congratulate those on this side of the House who have spoken in support of the bill as we put it to the House. As we know, the previous government legislated, in June 2013, to require the Australian tax office to publish certain taxpayer information of corporate tax entities with an income of $100 million or more.

I was just listening to the previous speaker. He is not a bad bloke, but listen to the arguments he puts forward. He just has a total misunderstanding of corporations and finance and how to run a business. He wants to put all this regulation and all this exposure and transparency into the corporate sector, but is he prepared to do it for the unions? No. They do not want the unions to pay any tax. They do not want the unions to be transparent. But they want to go after those who build the wealth and those who contribute to the wealth of this country and say, 'We're going to take it to you.'

He came up with an estimate of $1.9 billion over four years. Now, if you have an estimate from anyone on that side of the House, you cannot believe it. Currently we are paying nearly a billion dollars a month in interest purely because of their reckless governing of the economy in the six years that they were in government. They stand up here, and they get on their soapboxes and take the moral high ground, but they are not prepared to make the unions pay tax or make them transparent. Let us get back to the point of this discussion, anyway. We might as well get back there; I have had the crack there!

The information that was legislated to be published included an entity's name, the entity's Australian business number and the entity's total income, taxable income and tax payable. The purpose of this government's amendment bill is to ensure that the release of information by the Commissioner of Taxation, as I described earlier, does not jeopardise the privacy, personal security and market environments of Australian-owned private companies. I do not know whether those on that side of the House understand the difference between private and public, but in the first instance, for corporate private entities, market security and corporate security would be paramount.

Mr Deputy Speaker Goodenough, I know that you ran a successful business, as I did too. Part of running a successful business is also the privacy and security; the intellectual property; and the information that your business makes its daily decisions on, called the profit-and-loss sheet and the balance sheet. That is private information. That is private information that you have earned, and you should decide what happens with that information. Obviously, it has to go to the ATO, but private companies are not required under the current law to show or publish that sort of information—intellectual property information and profit—and they should not have to, either, because it is their information, which their opposition will use and public companies will use to destroy their market share and destroy their profitability.

As the Assistant Treasurer and the Treasurer have said before, this government is committed to combating tax avoidance and is on the way to implementing well-considered and balanced measures, which I must say would provide those private companies in that group of companies targeted by the previous government with a sense of relief about the welfare and the profitability of their companies. The coalition government have several concerns—well-founded concerns—about Labor's legislation, which is why we have moved to introduce legislation to exempt Australian-owned private companies.

As I said before, this government is committed to combating tax avoidance. Australia was the G20 president in 2014. We led the global response to tax avoidance by multinational companies and ensured that it not only was on the agenda but remained at the top of the agenda. The Assistant Treasurer has stated:

Under Australia's leadership, the first of the OECD/G20's base erosion and profit-shifting recommendations were delivered last year.

The budget continued the government's strong international leadership by actioning the 2014 OECD/G20 base erosion and profit-shifting recommendations on country-by-country reporting, anti-hybrid rules, harmful tax practices, and treaty abuse rules.

Australia will implement the OECD's country-by-country reporting from 1 January 2016. We are one of the first countries to commit to implementing it.

Country-by-country reporting to tax administrations will require large multinationals to report annually for each jurisdiction in which they do business the amount of revenue, profit, income tax and economic activity. For the first time tax administrations will get a global picture of multinationals' operations. This is a significant step in improving transparency for tax administrations.

Earlier I spoke about the government's concerns about the Labor government's laws, and confidentiality was and is one of the big risks. Labor's legislation has the potential to undermine the confidentiality of taxpayer information, a fundamental tenet of Australia's taxation system.

As noted by the coalition in its Senate Economics Legislation Committee dissenting report in June 2013:

Confidentiality of taxpayer information is fundamental to the administration of taxation law.

Confidentiality is protected because ensuring the privacy of sensitive information, including commercial information, goes to public confidence in the administration of taxation law.

That confidence is vital for companies, as I stated before. The confidentiality, the intellectual property, the competitiveness in the market—the confidence in the administration of the tax law is vital.

This is an issue that several Labor members have highlighted previously themselves yet failed to apply in these circumstances. In the Hansard of Wednesday, 29 September 2010, Bill Shorten said:

The inconsistencies and ambiguities associated with the existing law have the potential to undermine its primary purpose—that is, to provide clear protection for taxpayer information. The taxation law has long recognised that such protection is fundamental to ensuring that taxpayers maintain their confidence in the operation of the tax system.

Also there was Chris Bowen, who did a media release on 13 March 2009. In that media release, he stated:

The Government affirms the importance of maintaining a high level of protection of information provided by taxpayers …

Then there was Wayne Swan, who did a doorstop interview in Brisbane on 24 January 2013. He said:

… I would have thought that everyone out there that was concerned about good public administration would see the common sense in observing what the Tax Office says about confidentiality provisions because they are important to every Australian and it's not a decision of the Government, it's the decision of the Tax Office.

The importance of taxpayer confidentiality is reinforced by Keeping it safe: the OECD guide on the protection of confidentiality of information exchanged for tax purposes, which says:

… taxpayers need to have confidence that the often sensitive financial information is not disclosed inappropriately …

There is also the commercial risk factor. It has the potential to provide competitors, suppliers and upstream purchasers of goods or services of private companies with sensitive commercial information. As you know from your private company, Deputy Speaker, in my private company, when I ran it, the last thing I wanted my competitors, my suppliers and my clients to know was the profit margins I was making. That was highly sensitive information and, obviously, would be used in commercial negotiations with all of those stakeholders in the running of my company and the handling of my market environment. Again, the commercial risk in the Labor proposal was enormous.

In the words of one of Australia's best known food manufacturers, details such as their total income and tax payable are:

… not otherwise available to our competitive suppliers which has the potential to be used in a manner that will cause real financial damage to our business.

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