Michael McCormack (Riverina, National Party, Assistant Minister to the Deputy Prime Minister) Share this | Hansard source

I did go, actually, Member for McMahon. I did go. I attended that. You were not yet in the chamber when I was speaking earlier about the excellent reputation that the member for North Sydney forged as far as our G20 presidency was concerned and the high elevation that he gave Australia's G20 presidency.

The Turkish G20 presidency priority for 2015 included a section on international tax that stated:

We will be monitoring the implementation of the 2014 deliverables of the Base Erosion and Profit Shifting (BEPS) Project. We will also work to ensure a smooth transition to the 2015 deliverables of the BEPS project to secure progress in this field. To enhance inclusiveness of the international tax system improvements, we will continue to incorporate the developing country perspective to the G20 tax agenda, with an increased emphasis on bilateral and multilateral cooperation between tax authorities.

As I said, Australia's reputation at G20 was highly regarded and certainly Turkey was continuing on the good work started by the member for North Sydney and that is now being adopted by the member for Cook, the now Treasurer. That is because this is important.

We have heard during this debate Labor talking about how much this would make. If we look at the second reading amendment that Labor has put forward, it says:

… "while not declining to give the bill a second reading, the House notes that its revenue impact is unquantified, and calls on the Government to adopt Labor’s fully-costed multinational tax package to raise $7.2 billion over the next decade".

We know about Labor's ability to get it so wrong when it comes to estimating how much money might be raised by a particular project. We know that under the Labor government when it was in power the original resource superprofits tax announced by Kevin Rudd and the member for Lilley was estimated to raise $49.5 billion from 2012-13 to 2016-17. The revised mining tax announced by the former member for Lalor, Julia Gillard, and the member for Lilley was originally estimated to raise $26.5 billion over the same period.

Net revenue from the mining tax in the 2014-15 budget was expected to raise over $300 million in total, but we know how wrong Labor got it. The fact is that Labor then spent the money they did not have in typical ALP fashion. They spent it on a whole range of projects and drove our good economic situation that they inherited in 2007 into something that just went from bad to worse. I admit that we did have a global financial crisis. I admit that that knocked our expected revenues about. But we did not need Labor to then run around and spend money that we never had a hope of raising. That was just typical of Labor, spending money it did not have, spending money we never had a hope of raising and tearing the forward estimates asunder.

This is an important piece of legislation. It is good that Labor is actually getting on board with us, despite the amendment. These measures are part of a package of domestic measures announced in the 2015-16 budget to bolster Australia's existing laws to ensure that multinationals pay their fair share of tax. We know that a fairer tax system is one in which all taxpayers meet their tax obligations, and that is why we are committed to addressing tax avoidance by multinationals. If a company makes a profit in Australia, it needs to pay tax in Australia. We do not want individuals and small businesses unfairly carrying the tax burden, for all the reasons that I spoke about earlier. We need to ensure that regional Australia maximises its opportunities. We need to ensure that we are able to roll out and can continue to roll out the infrastructure plans and policies of this government, because we are a road and rail government. We are a government that is investing in ports. We are a government that is investing in valuable infrastructure, ensuring that we protect, preserve and support regional Australia.

In the 2015 budget, the government announced a package of actions to further strengthen Australia's tax laws and level the playing field for domestic business. We are introducing a multinational anti-avoidance law right here tonight to stop multinationals using complex schemes to avoid paying tax in this country by booking revenue overseas. We are also closing the digital tax loophole to ensure that the goods and services tax applies to digital products and services that are downloaded in Australia, and that is important as well. We are also introducing new OECD country-by-country reporting requirements to strengthen the Australian Taxation Office's capabilities to identify profit shifting. Country-by-country reporting will ensure that multinational companies with global revenue exceeding $1 billion need to annually report to tax authorities the amount of revenue, profit, income tax and economic activity that they are generating for each jurisdiction in which they do business.

We need to make sure that there are suitable penalties for large companies engaging in tax avoidance and profit shifting. We need to make sure that there is deterrence for those companies to make sure that they do not try to risk it. This is important legislation. It is good that Labor is getting on board with this legislation, because it is important that we get that revenue base and that we ensure that our base is not continually eroded by those tax avoiders who should be paying their fair share. I commend the legislation to the House.

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