Melissa Price (Durack, Liberal Party) Share this | Hansard source

I am very pleased to rise today to speak on the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015. The Turnbull government is building an innovative and sustainable economy for a safe and secure Australia, and this bill is an important element of that. The bill implements three 2015-16 budget measures delivered by the former Treasurer, Joe Hockey: multinational anti-avoidance law, country-by-country reporting and new transfer pricing documentation standards, and stronger penalties to combat tax avoidance and profit shifting.

If there is one thing the people of Durack loathe it is unfairness, and I would like to note the comments by the member for Makin that perhaps we should be using words like 'thieves' and crooks'. I happen to agree with him, because, as we know, currently there are some multinationals operating in Australia who are not paying their fair share of tax, and I think 'thieves and crooks' is indeed a better description for them. These measures are part of a package of domestic measures announced in the 2015-16 budget to strengthen Australia's existing laws to ensure that active multinationals in Australia pay their fair share of tax. This bill is consistent with the government's, the Liberal Party's and my values of making a fairer tax system. With multinationals avoiding paying their fair share, it has created an unfair playing field for local businesses, who, unfortunately, lack the reach of these much larger organisations. Families and small businesses in Durack are therefore forced to shoulder more of the tax burden, which undermines confidence in the tax system. I personally would like to see tax rate cuts across the board, and I look forward to seeing recommendations from the tax white paper.

The bill we are debating will allow the Commissioner of Taxation to treat these large multinationals as though they have a taxable presence in Australia and make them subject to Australian law. It applies to large multinationals with annual global revenue of $1 billion or more. This bill is expected to claw in billions of tax dollars, and the Australian Taxation Office has about 30 companies in mind that it will target under this law once it is passed. We are targeting the largest multinationals not only because it is fair but because it is these companies that have the greatest opportunities to avoid tax through offshore activities and represent the highest risk to Australia's tax base.

This bill goes to the heart of a key Liberal core value, and that is strong financial management. Despite the iron ore price more than halving and the weakening of other international economies, Australia remains on a credible path to surplus. As a new government we inherited a $48 billion deficit, but the good news is that we are set to reduce this deficit by $10 billion this year. Directly as a result of our actions, gross debt in a decade will be $110 billion lower than what we inherited two years ago.

I would like to take this opportunity to congratulate the Minister for Trade, Andrew Robb, on negotiating Australia's participation in the Trans-Pacific Partnership Agreement. The TPP, as we call it, is the largest global trade deal in the past 20 years. It will improve Australian trade across 12 different nations which together make up 40 per cent of the global economy. It will be of enormous benefit to my electorate of Durack in many industries but particularly in the cattle industry. This will be on top of the free trade agreements Minister Robb has signed with Korea and Japan since coming to office.

Additionally, if we can get the Labor Party to drop the politics and follow the advice of former Labor icons such as Bob Hawke, Kevin Rudd and Martin Ferguson, the China free trade agreement will also be passed by the end of this year, growing the important industry of agriculture, as one example—an incredibly important industry in my electorate of Durack—by an estimated $300 million. It is these deals that have led the way to the creation of 12,500 new jobs in Durack since I was elected and, very pleasingly, over 335,000 new jobs throughout Australia since this government was elected to office back in September 2013.

As I said earlier, the people of Durack loathe unfairness. There are more than 13,000 hardworking small businesses in Durack. It is simply not fair: these hardworking local small businesses do the right thing and pay their fair share of tax, unlike the large multinationals that we are discussing today, which have enjoyed an unfair advantage.

I am particularly proud that Australia has led on this global issue. As president of the G20 last year, Australia led the way on the OECD's BEPS action plan to ensure that multinational entities pay the right amount of tax. Under our country's leadership the G20 delivered the first level of an action plan to address multinational tax avoidance. Following this work, this government announced a package of domestic measures in the 2015-16 budget.

I would like to take this opportunity to put on record and fully acknowledge Joe Hockey's work with this particular matter. Mr Hockey worked hard to ensure that these multinationals operating in Australia start, at last, to pay their fair share. Pleasingly, the Turnbull government is going beyond the OECD recommendations. We are planning a voluntary transparency code by May next year. This code will enhance public confidence in the tax system and the community's understanding of the tax affairs of large companies. I am pleased to say that this government is ensuring that the ATO has unprecedented resources to deal with international tax avoidance. We are providing an additional $87.6 million to the ATO over three years to investigate international tax avoidance.

To date it is estimated that the program will raise over $1 billion in total, and I am pleased to say that this is $1 billion that is going to help to start to pay down the debt we inherited from those on the other side. Under this bill, the government will prevent multinationals from using complex schemes to avoid paying tax in the country by booking their revenue overseas. The stronger penalties measure of the tax laws amendment will double the penalties applying to large companies that are engaging in tax avoidance or profit shifting. Businesses in Durack and indeed throughout Australia will not be impacted, but for those who are operating illegally: be aware; we are coming for you. And just remember, if you are not doing anything wrong, you will have nothing to fear from this new legislation.

The government has been working closely with the business community as well as tax professionals and academics for the last two years on the OECD's profit-shifting agenda. We have consulted with stakeholders, including business, practitioners and the ATO, to develop the legislation to ensure the law will not have unintended consequences.

To those opposite, I would be surprised if you do not support this bill as I know that you too would like to crack down on multinational tax avoidance case. Let's be clear: it is this government which has an effective policy for direct action in this area.

Only the Turnbull government can cut down on large foreign multinationals not paying tax in Australia. What we have heard today during this debate is that this bill will further minimise the tax burden, already decreased by this government, especially for the hardworking businesspeople of Durack and for the rest of Australia. It will end the unfair advantage that large multinationals, who are avoiding tax, have over local businesses and create a standard of fairness not seen when the others were in charge.

As I outlined earlier, we are targeting the largest multinationals, because it is these companies that have the greatest opportunities to avoid tax and represent the highest risk to Australia's tax base. This is a very fair piece of legislation, and I commend the bill to the House.

See this speech in context