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

I am sure it did not, but we were not discussing the issue of the arbitrary figure that Labor came up with as a legislation point. What is the difference between a $99 million company and a $101 million company? Probably a good accountant. I say to the member for Fraser that I appreciate him asking that question.

I move on to personal and reputational safety concerns. Particularly during Labor's consultations in 2013, business stakeholders expressed concern that the measure posed a risk of compliant taxpayers being unfairly targeted by activists and having their reputation tarnished. Of course, we have seen that before. If the winners of lotto all get rung up and asked to make donations, then the same thing would apply to companies who are actively pursued by professional fundraising companies when they see what sort of turnover and what sorts of margins and profits they make.

Godfrey Hirst Australia made a submission to the Treasury discussion paper Improving the transparency of Australia's business tax system on 24 April 2013. As the chairman and CEO of Godfrey Hirst Australia pointed out, Australia's largest carpet manufacturer noted that:

By publishing extremely limited information selected specifically to put the targeted taxpayers in the worst possible light, it invites (incites) public action against the target taxpayers and potentially those associated with them. There are national and international examples of such actions against companies involving physical damage, reputational damage and commercial boycotts. Publication of the data will give information that could be detrimental to their shareholders, including to their safety.

A similar disclosure regime was also abandoned in Japan in 2005 after a recommendation from the Japanese tax advisory commission, which found that there were 'various reports of the disclosure being a factor in causing crimes and harassment'. While the Labor Party points to the publications of the BRW rich list as a comparison, a magazine's best estimate of someone's wealth cannot be compared to the release of detailed official taxpayer information by the ATO.

Regarding the effectiveness of the law, the government also has concerns regarding the incomplete nature of the information. It ignores the fact that personal income tax is payable on the company's after-tax profits by its shareholders, who are often on the top marginal rate of 49 per cent. The information published is incomplete and misleading as it omits any other reference to other taxes that private companies must pay, including the array of state taxes, fees and charges from payroll tax, stamp duties and land tax, local rates and charges, as well as federal fuel tax and levies. The legislation does not apply to entities that are not set up as companies, such as private equity and hedge funds that are not widely held trusts—and, as I said before, it does not apply to unions either. The publication of this information to a wider audience will not in any way enhance the ability of Australia's tax authorities to collect additional revenue.

Further to what I have said, the Assistant Treasurer has also said:

Australia has no harmful tax practices, but the ATO has already commenced exchanging information with other tax administrations on preferential tax regimes. This will help the ATO identify secret tax deals provided to multinationals by other countries that may contribute tax avoidance in Australia.

On treaty abuse, the government is acting now to incorporate the OECD's recommendations into Australia's treaty practice so that the multinationals do not exploit treaties to avoid tax. The government is also going further and faster than these BEPS recommendations. The government released exposure draft legislation for the new multinational anti-avoidance law to stop multinationals artificially avoiding a taxable presence in Australia and force them to pay tax in Australia on profits from the economic activities undertaken here. The legislation will be introduced shortly.

The government will also double penalties for large companies that use tax avoidance and profit shifting schemes. The Assistant Treasurer went on to say:

We will close the tax loophole that currently means digital products and services imported by the consumers are not subject to GST. Foreign providers will now be required to charge GST in the same way as domestic providers. The government has asked the Board of Taxation to work with businesses to develop a voluntary code for greater disclosure by companies of their tax information. I expect that the Board of Taxation will look at ways to provide more information to help inform the public about companies' tax information.

In conclusion, I say that I support this legislation introduced by the Assistant Treasurer. The fact is that private companies in Australia need to be protected from all the elements that will come out of releasing their information, which is private and should be confidential because they are not public companies. As we know, under current legislation in Australia, public companies have to disclose because they have public shareholders and they promote their products and promote their share sales through the stock exchange, which private companies cannot afford to do. I commend this bill to the House.

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