Zali Steggall (Warringah, Independent) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019. This government is constantly repeating that it is on the side of hardworking Australians. It would seem that it is also on the side of big multinationals if it does not do more than what this bill proposes.

I too am on the side of hardworking Australians and small businesses. I fully agree with the broad principle, at explicitly stated in the title of this bill, that multinational companies trading in Australia need to pay their fair share of tax here. After all, the many small businesses in my electorate of Warringah have to pay their fair share.

The government should be commended that additional transparency measures targeting multinational corporations introduced in the previous legislation are working. The ATO is collecting billions more in revenue that is going back to essential government services for the Australian public and the people of Warringah. I also agree with the bipartisan findings of the Senate Standing Committee on Economics. It reviewed the earlier version of this bill in the last parliament and found that ensuring the integrity of Australia's taxation laws is critical to ensuring an equitable society. I support 'programs delivered through the tax system', which result in substantial returns for taxpayers, and which demonstrate 'the government's commitment to continually strengthening our tax system'.

This bill, however, seems to be just fiddling around the edges of what is an enormous problem. The potential revenue gain for the measures is small and does little to address and resolve the issue. If we just concentrate on the first measure introduced, we can see clearly that luxury car tax rule changes and changes to the GST of booking operators will result in little tax revenue gain.

Schedule 1 of the bill, which deals with rules around thin capitalisation, will collect $120 million in additional revenue in the years 2020-21. This is just a fraction of the expatriated profits of just one tax minimiser. As it stands, we have some of the biggest companies in the world paying next to no tax in Australia. Let's take, for example, five of the top energy players over the last four years: ExxonMobil—$33 billion in total income in Australia, zero tax paid; EnergyAustralia—$30 billion in total income in Australia, zero tax paid; Peabody Energy—$12 billion in total income in Australia, zero tax paid; Chevron—$10.5 billion in total income in Australia, zero dollars paid; and Santos—$14.5 billion in total income in Australia, at least $3.1 million in tax paid. These numbers are from the Australian Taxation Office. This is $100 billion in income, and what is the Australian taxpayer getting? Only $3.1 million from Santos, which is only 0.0031 per cent on such income.

The hardworking small businesses all over Warringah want multinationals to pay their fair share of tax. Around half of major multinationals operating in Australia pay little to no tax. Their tools are practices like debt loading, profit shifting, base erosion and loss transferability, which require sweeping changes to transparency rules, reporting requirements and empowered and emboldened regulators to combat.

The proposed changes in this bill do little to address these practices. These practices are happening in my own electorate. There was a recent takeover bid by the Brookfield group, operating out of the Cayman Islands, acquiring 41 private hospitals owned and operated by Healthscope, including the beleaguered Northern Beaches Hospital, which services over 100,000 people in Warringah. The general advantages of purchasing Australian assets by Cayman Island entities is that it helps minimise tax and conceal information. We have not seen any legislation yet cracking down on this. The takeover by the Brookfield group should never have been approved by our regulators. The Foreign Investment Review Board—which looks at these transactions and is required to take into account complex financial arrangements that encourage tax avoidance practices—waved it through, and the Treasurer could have stopped it but remained silent. We need our regulators emboldened and ready to aggressively stop tax minimisation transactions.

The Brookfield group is now eyeing off the Aveo Group, an Australian company based in Sydney who provide aged-care services, housing more than 13,000 residents in about 90 villages across the country. We cannot have more Australian assets providing important services transferring to the Cayman Islands. If it comes to a bid, I call on the FIRB and the Treasurer to reject it.

How is the Australian public supposed to know of the practices that are happening? Reporting standards don't do much to encourage transparency and availability of information, with statements dealing with multinationals being purposely opaque and incredibly technical.

If you do want to know about these transactions and business structures, you can pay up to $41 per search through an ASIC register for the records, and some of these companies purposely have intricate webs of incorporated businesses, often having several businesses dealing with various complex functions and transactions. That's potentially hundreds of dollars, and simply not available to everyday small business owners. Other countries provide this basic search for free. Why do Australians have to pay for such accountability?

So, while I commend the steps proposed in this bill—and I know this is an issue that came up a lot around the electorate of Warringah—the government must do more on this front. We need to ensure that multinationals pay their fair share of tax for business they conduct in Australia. To take an expression often used in this place, especially by the Prime Minister: 'How good is our tax system!'—well, with due respect, it could be better.

See this speech in context