Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

I rise to support this bill, the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2019. I have seen multiple attempts by the government to tighten up on multinational tax avoidance, and I applaud all of them. However, it is hard not to conclude that each of these measures really only nibbles away at what is a much bigger policy issue, and a very serious one at that. It's very serious because every dollar of tax that multinational corporations avoid in Australia shifts an ever-increasing burden onto Australian taxpayers, and they include both small businesses and individuals. Predictably, our government's ability to provide essential and non-essential services to Australia directly suffers as a result of multinational tax avoidance.

This is why I was so taken with the French government's recent implementation of a flat three per cent revenue tax on multinational tech giants that operate in France. The tax only applies to revenues earned in France and only upon tech companies that earn annual global revenue of more than 750 million euros, in addition to revenue in France exceeding 25 million euros. Time magazine states that:

The revenue threshold is supposed to allow more room for startups. France argues that tech giants are abusing their market dominance, notably through tax avoidance, and preventing others from a fair chance of competing.

I find it hard to disagree with that sentiment, especially when large tech companies pay very little tax in most of the jurisdictions in which they operate, including Australia. For example, in financial year 2016-17, Facebook paid only $12.5 million of tax in Australia, which was only 3.8 per cent of its Australian revenue of $331 million; Google only paid $33 million in tax, which was only 2.2 per cent of its Australian revenue of almost $1.5 billion; and, in combining Amazon corporate and Amazon web services, Amazon paid $10.4 million in tax, which was only 2.3 per cent of its $454 million in Australian revenue. And similar stories stretch back through multiple years of Australian taxation data.

I would encourage every member in this chamber to read The Great Multinational Tax Rort: How We're All Being Robbed by Martin Feil. Just to give some global context to this: multinational corporations have avoided trillions of dollars of tax over the past 25 years. Tax avoidance is legal, but it is a massive abuse by multinationals that has a devastating effect on governments around the world and has placed an unbearable burden on individual taxpayers and on honest local businesses.

What is interesting, though, is that there are four accounting firms—PricewaterhouseCoopers; Ernst & Young, now known as EY; KPMG; and Deloitte—and they are the global accountants and tax advisers for multinationals. They have been paid over $500 billion in the past 25 years to prepare annual accounts and to manage multinational tax affairs. The favourite tool of the big four accountancies to minimise tax for their multinational clients is transfer pricing, a complex and confusing array of methodologies and strategies that work to reduce tax or even avoid tax altogether.

So I would encourage every member of this chamber to read this book. It is certainly eye-opening and says that we have to do much more. Apple Australia paid just $80 million in income tax on revenue of $6 billion in Australia in the year 2013-14. How can our mum-and-dad businesses compete when that is the arrangement that Apple have through their complex web, as do all of the other multinationals?

So we really must act to clamp down on multinationals which are, perfectly legally but immorally, taking full advantage of the weaknesses in our taxation system and other nations' taxation systems. For Australia, this is of great detriment to our taxpayers. The French look to be leading the way, and I hope Australia will do all we can to follow.

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