Terri Butler (Griffith, Australian Labor Party) Share this | Hansard source

In fact, I do not know if you have ever tried to take an asterisk or any other punctuation mark to the bank, Assistant Minister, but I do not think that one of the banks is going to give you much in return for the punctuation marks that you truck down to the teller at the local branch, and why would they? It is ridiculous. Fancy turning up with a federal budget and saying, 'We've got a revenue measure here. We've got no idea what it's going to raise, but this is the centrepiece of our multinational tax evasion policy.' It is just embarrassing. We were the president of the G20 in 2014.

Mr McCormack interjecting—

The G20 agenda was about cracking down on base erosion and profit shifting, as the assistant minister is well aware. As the president, you would think that we would have been at the forefront, at the vanguard of multinational tax evasion policy, cracking down on base erosion and profit shifting—

Mr McCormack interjecting—

but, as the assistant minister knows, we were not even amongst the early adopter countries for the common reporting standard. How embarrassing for Australia that so many countries around the world signed up as early adopters of the CRS and what were we doing? We were saying, 'We're not sure about that,' dragging the chain and kicking the can down the road, just as this government likes to do on all sorts of difficult policy issues. Just look at what they are doing on marriage equality. That is all a bit too hard for this term, isn't it? We are not going to have a free vote on that, are we? 'We're not going to have a free vote on marriage equality. We're not going to bother getting that done now,' and so it was with the common reporting standard in the year that we were the president of the G20, when one of the major parts of its agenda was dealing with base erosion and profit shifting. One of the major parts of the G20's agenda was cracking down on multinational tax evasion, not just for the benefit of the developed countries and the G20 but for the benefit of the entire world. Those developing countries are missing out on their entitlement, their fair share of taxation revenue, and as a consequence they are relying more on aid than they ought to.

The idea that you are just going to raise some asterisks as revenue is ridiculous and it stands in stark contrast to Labor's multinational tax evasion policy. As the assistant minister is well aware, in March this year we announced a PBO costed, carefully considered $7.2 billion package of measures to stop multinational companies shifting their profits out of Australia and avoiding paying their fair share of tax. I have never said our policy was the last word on tackling multinational tax—of course not. We know that work is being done across the world, in the G20, in the OECD, to tackle what is a global phenomenon of base erosion and profit shifting. We have regularly called on the government to adopt our measures alongside their own.

The bill before us focuses on companies that artificially avoid booking revenue in Australia so that they do not have to pay tax on the profits. That is an important issue to tackle and we hope that this bill will force companies to restructure their operations so that profits made here stay here.

Mr McCormack interjecting—

I don't think it is funny. The assistant minister at the table seems to think it is a funny bill. I don't think it is a funny bill. I think it is important.

Mr McCormack interjecting—

Dr Chalmers interjecting—

The assistant minister is very fortunate that my friend the shadow minister for superannuation is leaping to his defence. The shadow minister is a kind man and certainly very kind to the assistant minister.

We do need to make sure that companies are paying their fair share of tax. It should not be left to Australian companies and Australian households to bear a burden because multinationals are shifting their profits elsewhere. So this is an important bill. We do hope this bill will force companies to restructure their operations so that profits made here will stay here.

But this bill does nothing to stop companies using debt deductions to send money offshore, unlike our policy. Companies can easily transfer money between their subsidiaries and holding companies and dress it up as a loan, even though it is just a transfer of money from one pocket to another. Just like other business expenses, interest costs on loans are tax deductible. These artificial loans become a way for companies to shift their profits into tax havens at the expense of the bottom line here in Australia. This is a loophole that we need to close.

We are not going to stand in the way of this attempt by the government to tighten Australia's tax net, no matter how small or insufficient or unknown it may be, in terms of revenue to be raised. We are taking a positive and bipartisan approach to this important issue. In that same spirit, the government should adopt our $7.2 billion tax package and tackle all the loopholes that let companies send their profits offshore.

If this government is committed to ensuring that major corporations pay their fair share of tax, they also need to drop their push to gut Australia's tax transparency laws. Transparency is one of the most effective tools we have available to combat profit shifting and tax avoidance. In 2013 we passed laws requiring the Australian Taxation Office to publish information about the income and tax paid by companies earning more than $100 million. Unfortunately, this government has mounted an attack on those laws.

Having said that, we are supporting this multinational tax bill through the parliament, because we believe tackling tax avoidance and protecting Australia's revenue base should be above politics. Under the former Prime Minister, the member for Warringah, and the former Treasurer, the member for North Sydney, there was just a blunt rejection of our package. It was very negative. It was typical, unfortunately, of this coalition's track record. It was just a political refusal. They did not want to talk about our idea, just because it was our idea. I hope that this government will take a different approach. I have to say that it would be beneficial and in the national interest if, instead of just rejecting things out of hand, the government actually considered the policies and ideas that we raise, and I look forward to a much more constructive and fruitful set of discussions on this and all other issues into the future.

See this speech in context