Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

As much as I like the member for Rankin—and he's my electoral neighbour in Queensland—I have to say that there's not much in his contribution that I could agree with. But I'm sure he won't find that surprising. We've had a litany of complaints, as usual, from those opposite and nothing of substance. I find it interesting that he talked about impacts on the economy. Well, he failed to acknowledge that, in the recent election, those opposite proposed to hit our economy with a sledgehammer of $387 billion of new taxes. So his arguments in his contribution for the last 10 or so minutes ring rather hollow given the policy suite and platform those opposite took to the last election.

It's worth reminding the House that it was this government in 2016 that passed the first tranche of multinational tax legislation, and the result of that has been at least $7 billion—I believe the figure's actually a bit higher now at about $13.1 billion—of additional revenue that this government and, importantly, the Australian taxpayer have received. But what the member for Rankin failed to tell the House is that that side over there voted against it. They voted against it. So he can come in here and speak all he likes about multinationals' tax avoidance, but the end result, as it always is in this place, is that you look at what Labor does, not what they say, because there's always a vast difference between the two. And this piece of legislation and the litany of excuses that the member for Rankin just trotted out are no different.

I recognise, as I walk around my electorate and talk to businesspeople and the community more generally, that there are, very rightly, questions asked about whether large multinationals pay their fair share of tax. I think that is a very valid question. Just like ordinary everyday Australians who pay their fair share of tax, multinationals should do exactly the same. We've heard various reports and evidence during committee hearings and in the press about how companies structure their affairs to minimise their tax liabilities. It is a barbecue stopper for many people. The foreign multinationals structure themselves to minimise those liabilities, and, rightly, people are disappointed.

As all good governments do, we've listened and we've acted, and our tax integrity laws are some of the strongest in the world. As I've already touched on, since 2016, we have raised close to $13.1 billion in additional revenue through closing loopholes and ensuring that the tax on profits generated here in Australia is paid here in Australia. Why is this important? It's important for this simple fact: the more money we receive as a government as a result of multinationals paying the tax that they are due to pay here, the more money we have to invest in education, health, defence and infrastructure. We can see from the recent budget that that's exactly what this government is doing. It is delivering record funding for education, health and infrastructure, and it is delivering record funding for community projects across my electorate and every electorate in this place. It is ensuring we have the funds to defend our country, and, most importantly, it is ensuring that everyone is paying their fair share of tax.

When companies arrange themselves to avoid tax, it places an unfair burden on the rest of the Australian taxpayers, other companies and small and family businesses in this country that do the right thing. Whether it's setting up a shell company in Singapore, running services on a hire basis or just directing profits offshore to avoid tax, the government is cracking down on these practices. Let me run through some of what the government has already done in this area. We introduced a multinational anti-avoidance law, the diverted profits tax and country-by-country reporting. We have implemented all of these measures, and we'll continue to further refine measures to clamp down on multinational tax avoidance. We've also created the Tax Avoidance Taskforce within the ATO to focus on tax avoidance by these same multinationals. We've increased the resources of the ATO to go after multinationals and ensure their fair share of tax is paid. A strong cop on the beat will go a long way to ensuring that big multinationals will be made to do the right thing and pay their fair share.

The principle is simple: the profit is earned here and it should be taxed appropriately here. We're closing loopholes that companies like Google and Apple use to minimise the tax they pay. We're working with our international partners to define tax avoidance and ensure the agreed definition is applied globally. Most recently in the 2018-19 budget, the government announced further measures to strengthen our tax system. We will limit the interest deductibility to stop companies shifting profits offshore and broaden the scope for large multinationals to be subject to the multinational anti-avoidance law and the diverted profits tax. Australian taxpayers quite rightly expect all taxpayers in this country to comply with the law because the quiet Australians and the mum-and-dad small-business owners across the country do exactly that each and every day. It is the law of the land and therefore it is the appropriate thing to do. After all, these tax receipts fund the essential services that people demand and expect.

Let me deal briefly with some of the specifics of this bill. The bill amends a number of tax measures, to close loopholes that multinationals use to reduce their tax burden, such as the R&D tax incentive, with it being better targeted to gain the most from the R&D dollar. And there is the use of thin capitalisation as a way of devaluing assets for tax purposes. This bill will also ensure that multinationals cannot structure themselves to avoid our tax integrity rules.

The proposed reforms respond to the 2016 review of the R&D tax incentive. It found that the program was poorly targeted, failing to meet its objectives and leaving Australian businesses unable to spend as much as they would like on R&D and, in doing so, stay competitive. This bill will address the underinvestment in R&D by the private sector. Larger companies will get higher incentives the more intensively they undertake R&D, while smaller companies will continue to receive the refundable incentives of up to a yearly cap of $4 million.

With more than 15,000 small and medium businesses in my electorate of Forde, I believe this amendment will guarantee equal opportunity and provide sustainable research and development capabilities to all Australian businesses, creating jobs and economic opportunity not only in my electorate of Forde but across the entire country. These reforms will apply from the 2018-19 financial year and are expected to have a net gain to the budget over the forward estimates of some $2 billion to 2021-22.

Schedule 4 of the bill deals with thin capitalisation. The changes will mean that companies must use the asset pool reported in their financial statements rather than a different value when undertaking thin capitalisation tests, which are being abused to increase debt and to shift profits overseas to avoid tax. There are a number of tests available to determine whether the entity has a thin capitalisation exposure. These rules vary, depending on the thin capitalisation classification of the entity. This schedule will result in approximately $240 million in revenue over the forward estimates period.

Schedule 5 of the bill deals with online hotel bookings. Currently, rules exempt offshore sellers from including sales of hotel accommodation in their GST turnover calculation. This means that they are often not required to register for GST or charge GST on their mark-up over the wholesale price. Announced in the 2018-19 budget, this bill will remove a carve-out in GST law so that online hotel bookings made through offshore companies for hotel stays in Australia will attract GST and increase revenue. This schedule levels the playing field for Australian hotel bookings by ensuring that offshore sellers of Australian hotel accommodation calculate their GST turnover in the same way as local sellers. This will apply from 1 July 2019 and will see $15 million in revenue and an increase in GST payments to the states and territories over the forward estimates period. For my electorate, which represents the northern part of the Gold Coast, I'm sure the tourism operators will be very pleased to hear of these increased schedules that we're putting in place to ensure that GST is collected appropriately from overseas sellers. And importantly, again, the increased GST payments to the states provide the states with greater capacity to provide the services that they need to provide.

Schedule 6 removes the luxury car tax on cars reimported into Australia following refurbishment overseas, effective from 1 January 2019. And schedule 7 of the bill will ensure that the rules addressing multinational tax avoidance, such as the diverted profits tax and the multinational anti-avoidance law, apply to all relevant entities. This will prevent multinationals from manipulating the values of their assets to increase their debt deductions and reduce their tax payable in Australia.

As I said earlier, the ATO has now raised over $13 billion in additional tax liabilities through our suite of multinational anti-avoidance laws since July 2016. This bill further demonstrates that the government is continuing to identify loopholes and, importantly, to close them, and that it's making sure multinationals pay their fair share of tax. Around the electorate I've heard complaints of, 'Why are you letting big multinationals avoid paying tax?' I'm glad to say we are not letting them off; we are ensuring the people of Australia receive tax from entities whose profits are earned in Australia when it is due. Integrity measures are an important part of preserving our tax structure. While we definitely have strong anti-avoidance laws, we still will continue to build on those to ensure the integrity of our tax system. Importantly, as part of this we're also working with our international partners. It's important that everybody pays their fair share. The old adage that there are two certainties in life—death and taxes—is still true.

The coalition government is proud of its commitment to the Australian economy, to Australian businesses and to the Australian people through this package of measures. We are a government that is creating a plan for a stronger Australian economy with more jobs and guaranteeing the essential services that we rely on. The foundation for that is ensuring everybody pays the appropriate level of tax. In my electorate of Forde, small and medium sized businesses provide thousands of jobs for people in my community and are the essential building blocks and foundation of our local economy. However, to ensure government is able to fund infrastructure like the upgrades to a number of roads, intersections and sporting clubs across my electorate, as I've discussed many times in this place, we need to ensure Australian companies and multinationals pay their fair share of tax.

In closing I say that this government is doing exactly what it said it would do—that is, making sure multinationals pay the tax they owe. As always, this side of the House is delivering on its commitments and promises to the Australian people. All those on the other side do is talk and all they want to do is tax you out of existence. On this side of the House, through ensuring multinationals pay their taxes, we can ensure low- to middle-income Australians have their taxes lowered and their education and health services guaranteed for the future of this country. We will continue to focus on delivering for Australians now and into the future.

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