Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

Last year the Australian Commissioner of Taxation published the tax details of 1,500 large corporate taxpayers which showed a staggering one-third of these companies paid no tax in 2014. This transparency measure was part of a wider package of ground-breaking legislation contained in the Labor budget of 2013 which was aimed at stopping corporate tax minimisation and evasion. At that time, all of those measures were opposed in total by the Liberal Party. Over our six years in government, the Liberals opposed every measure introduced by Labor to close corporate tax loopholes which had in themselves been opened up by previous Liberal governments.

Remarkably, we saw in the House yesterday the Treasurer boasting about his government's success in cracking down on multinational tax evasion. This is a joke. There is no success and no crackdown from this government. Firstly, we had the Treasurer talking about audits conducted by the ATO. These are audits which would not have been possible without Labor's legislation or the funding that we provided for the audits to occur in the first place. The audits have so far returned over $500 million in revenue to Australia. They were launched by the Labor Party and only made possible by $109 million provided in the 2013 budget.

Secondly, we saw the Treasurer yesterday laughably claim that Labor had voted against action on multinational tax evasion. Nothing could be further from the truth. What we did vote against was a last-minute deal between the Greens and the Liberals to water down tax transparency which we had introduced in the first place. Our record is very substantial in this area. We have consistently supported action against multinational tax evasion and gone further now with a very big proposal to raise a further $7.2 billion by closing down additional tax loopholes.

Our decision to oppose the Liberal-Green deal was vindicated last year, when the ATO reported that one in four public companies earning more than $100 million paid no tax and—get this—nearly half of all foreign companies with total revenues of $21 billion paid no tax. The UN and OECD conservatively estimate that globally this sort of tax evasion is costing $240 billion annually. Gabriel Zucman noted in a recent book called The Scourge of Tax Havensthat 55 per cent of all the foreign profits of US firms are now kept in tax havens. The cost to that country is US$130 billion from US firms alone.

One of the most disappointing revelations that we have seen from Senator Dastyari's tax inquiry has been the extent to which two of Australia's largest and oldest mining companies, BHP Billiton and Rio Tinto, were exposed for using aggressive transfer pricing activities, costing the public billions of dollars in revenue. The full impact of their activities is yet to be fully realised, but they are part of a scourge which has seen billions of dollars smuggled out of Australia in recent years. Assuming conservatively that 10 per cent of corporate tax revenue over the forward estimates is lost to aggressive minimisation and evasion, a minimum cumulative cost to the budget will be $26 billion over four years.

At the core of these activities is the use of tax havens such as the Cayman Islands and tax shields such as Singapore. When global companies seemingly as respected and as large as BHP and Rio operate in this cavalier way, through tax havens, it compromises the integrity of our social contract and gives the green light to everybody else in the community to go about minimising, avoiding or evading their tax. I say to the directors of these companies and to their chief executives, to all of the major accounting firms that advise them in these practices: you have become part of a scheme and a culture which is diverting essential funding away from the country that nurtured and educated you. Is that the sort of legacy you wish to leave to your country?

The government's tax agenda is about making the overall personal tax system much more regressive through a higher GST. It is a pea and thimble trick: whack low and middle income earners with a 15 per cent GST and pretend that they can be compensated by personal income tax cuts and that there is going to be all this money left health and education—not true. The end result will be low- and middle-income earners shouldering a higher tax burden and high-income earners getting a tax cut, and no money for health and education.

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