Stephen Jones (Whitlam, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

I'd rather hear what the member for McKellar has got to say in the body of the debate. Now that we're able to do that, I look forward to listening to what the member for McKellar has got to say in reply.

The bill contains two measures relating to the integrity of Australia's tax and superannuation system. I'm delighted we're going to have the opportunity to debate these two very important schedules. I won't hold you in suspense. You would've taken, through my contribution in the procedural debate, that Labor's going to support these bills. We actually think that they're important. The bill has sensible improvements in our tax legislation.

Schedule 1 deals with the issue of significant global entities. Schedule 1 extends the definition of a 'significant global entity' under tax legislation to include more entities, including members of large business groups headed by proprietary companies, trust partnerships, investment entities and individuals. Being defined as a 'significant global entity' carries with it a range of important requirements and impositions under current tax law, including significant penalties around false or misleading statements, increased reporting requirements and multinational anti-tax-avoidance measures. Expanding the definition will defeat attempts to restructure corporations to avoid multinational tax avoidance laws, which were introduced by Labor when we were in government. It's a sensible measure, as I've already said. But, according to the government, it won't do anything to close the enormous multinational tax gap. This goes to the heart of the second reading amendment that I will be moving. The explanatory memorandum notes that the revenue impact of this measure is estimated at nil.

The multinational tax gap was estimated at more than $2 billion by the Australian tax office when it was last publicly estimated in 2016-17. We questioned that estimate back in 2016-17, and a lot of water has passed under the bridge since then. That's likely to be a very conservative estimate. Other estimates put the estimate at closer to $13 billion. I'm sure members in this place would agree that, whether it's $2 billion or $13 billion, it's tax owed and it's tax that should be paid. That money can be put to better use in this country, improving our infrastructure, our school education system, our university education system, our vocational education system, our hospitals, our health care and the quality and availability of pharmaceuticals in this country. I'm sure all honourable members of this place would agree that that is a much better use of that money. Whether it's $2 billion or $13 billion, as more reliable estimates put it, it is money that should be paid and it's money that should be put to work by this parliament.

Company after company have been exposed as paying zero tax on their Australian operations, including, as I mentioned in the previous debate, large companies such as Goldman Sachs, Shell and IBM. Under the previous governments and under this government, one-third of all large companies paid no income tax whatsoever. It's extraordinary and worth repeating—one-third of all large companies paid no income tax whatsoever. Data issued by the Australian tax office in December last year showed that out of 2,214 large companies, as many as 710 of them paid no tax whatsoever in 2017-18. That number includes 102 firms reporting more than $1 billion in total revenue. I want you to contrast that picture to the picture of an average Australian worker. A single Australian worker pays 25 per cent of their income in taxes; however, these large companies earning over a billion dollars have average tax payments of only two per cent of income. I want you to think about that for a moment. One earns a billion dollars; another one is earning an average income of under $80,000 a year. One is paying no income tax, or an average of two per cent of their income; the other is paying 25 per cent of their income. It's not fair, it's iniquitous, and more needs to be done about it.

We only know about the scope of this tax avoidance because of Labor's tax transparency laws, which I hasten to point out the coalition members voted against. Is it any wonder they didn't want to bring this debate on today? It is a significant embarrassment for government members. The tax transparency laws, which enable us to identify the extent of tax avoidance, were opposed by this mob opposite. When they get up and speak in this debate about their commitment to doing something about multinational tax avoidance, I want them to remember the ignominy and the shame of the fact that they voted against Labor's tax transparency measures—and they would still rather avoid the spotlight. They release this report through gritted teeth every single year in the doldrum days of December after the press gallery has gone home for their Christmas holidays. The coalition want you to think that they're tough on tax avoidance, but nothing could be further from the truth. That's why they spent $24 million last financial year on an advertising campaign promoting tax integrity and their so-called Tax Avoidance Taskforce. Remember that number: $24 million promoting the Tax Avoidance Taskforce. This task force was announced as a budget measure back in 2016, but it's simply not true, like so much that this government does. They've got a plan for everything, but they follow through on nothing. When you peel back the detail, what you discover is that it is all marketing and deception.

As the Audit Office has recently revealed, there is no Tax Avoidance Taskforce. It was a blatant untruth. The Treasurer knows it. The Prime Minister knows it. They're trying to hoodwink the Australian taxpayers and their own backbench that they're somehow serious about this issue of tax avoidance. They spent $25 million on an advertising campaign. Doesn't that tell you everything about this Prime Minister? It tells you everything you need to know about this Prime Minister. It's about coffee cups and T-shirts saying 'Black in black'. It's about a $25 million anti-tax-avoidance advertising campaign. But, when it comes to doing something about tax avoidance, they are missing in action, and that's why they wanted to delay this debate: because they were embarrassed. It takes a lot to embarrass this mob over here, but they were embarrassed about the fact that they promoted an anti-tax-avoidance task force that simply did not exist. There was no consistent methodology for assigning tax avoidance resources and no actual Tax Avoidance Taskforce. There was no actual task force unit within the tax office. The Prime Minister has been caught out with a red-hot deception once again.

Indeed, the ATO's methodology for assigning resources was so convoluted that the Auditor-General could not confirm whether resourcing was supplied in line with the budget estimates. So not only was their advertising campaign completely misleading and untrue; but the way that they arranged resources within the tax office themselves was, it appears, designed to be an untruth as well. Funding may have been used to cover up real cuts to baseline staff in affected areas. So not only are they not allocating resources as they said they were going to do in their budget papers; but it appears that they've actually cut resources. They've actually taken staffing resources out of the anti-tax-avoidance area. Is it any wonder that this mob do not want to talk about this issue today? There was money spent on ad campaigns to promote actions that simply aren't happening. This is something that the hollow men would be proud of.

This farcical approach of this government to multinational tax avoidance shouldn't surprise anybody. In fact, this is exactly how the Morrison government generally responds to most of its problems. It goes something like this. Step one: ignore the problem. Call it a Labor conspiracy. Step two: when the public pressure mounts, finally claim that you're responding to the problem while actually doing nothing at all. Step three: spend taxpayer money on a high-concept ad campaign promoting your nonresponse to the problem. This is their game play on so many issues. They've got a plan—a plan for an advertising campaign that advertises the fact that they're doing absolutely nothing. And I'm sure that those government backbenchers who are lined up to speak after me will be happy to supply that final step of ignoring the problem and then spending taxpayer money on an advertising campaign. Sorry; I said there were three steps. There are actually four: when it all goes pear-shaped, blame Labor.

The Australian people deserve better than the absolute sideshow of this full carnival. The Treasurer and the Prime Minister should spend less time on ad campaigns and more time ensuring big companies pay their fair share of tax. A small change to an obscure definition in the Income Tax Assessment Act might be a sensible move. Labor backs the measure but we don't back the government, and our money's not on the government's willingness to do anything about this $13 billion problem.

I'll make some comments about schedule 2, 'superannuation and fund mergers'. Schedule 2 will make superannuation fund mergers simpler in the future. It does this by extending tax relief measures that were first introduced by Labor in 2008 to remove unnecessary impediments that would otherwise apply to fund mergers. I will always be in favour of any measure that helps to ensure better returns for fund members. Smaller and underperforming funds in whatever sector—whether they're in the retail sector or the industry sector—cannot be tolerated. Merging achieves better performance for members when they simply cannot achieve those returns in their current state.

The now permanent tax relief measures will allow super funds to transfer revenue and capital losses to a new merged fund and to defer taxation consequences on gains and losses from revenue and capital assets. This sensible Labor reform has proved effective in giving fund trustees certainty when planning merger activity. In fact, just today, two funds in Queensland—together with two funds in Western Australia, I'm advised—have announced their intention to merge. This sensible reform will ensure that their members aren't hit with an unintended tax burden on either capital gains or the ability to distribute capital losses on the merger of those funds. It makes sense. It's in the interests of members. We support it. Every Australian deserves to retire with dignity and independence, and Labor will always fight to make a stronger and fairer superannuation system as a result of this reform. The Productivity Commission recommended making it permanent, and the government has finally agreed. I'd now like to formally move my second reading amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“whilst not declining to give the bill a second reading, the House:

(1) calls on the Government to commit to the legislated increase of the superannuation guarantee to 12 per cent; and

(2) notes that the Government’s failure to make sure multinationals pay their fair share of tax in Australia is weakening our economy”.

This amendment calls on the government to commit to the legislated increase to the superannuation guarantee to 12 per cent.

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