Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Financial Services) Share this | Hansard source

I am of course supporting the very sensible amendment that has been moved by the member for Whitlam which criticises this government's approach to multinational tax transparency. It also calls on the government to commit to the staged increase in superannuation that is vitally important, particularly for low-paid workers in this country.

In terms of the Treasury Laws Amendment (2020 Measures No. 1) Bill 2020, we're supporting the substance of the bill, and schedule 1 relates to significant global entities and expands the definition of a 'significant global entity' in the Income Tax Assessment Act. This will expand reporting requirements to ensure that certain entities currently not captured by the definition are covered by certain reporting requirements and other multinational tax avoidance laws, but it also modifies the rules around country-by-country reporting to ensure Australia complies with Australia's international commitments as part of the OECD's base erosion and profit-shifting action plan. There's been a lot of international attention recently about the BEPS program and ensuring that we're doing all we can to provide as much data as possible to crack down on tax avoidance through international channels. The OECD has set up a process that Australia has signed up to that requires us to meet certain commitments in terms of legislative frameworks to ensure that we participate in those international strategies. This bill achieves that.

So Labor supports the measures extending the definition of global entities and moving to meet our international commitments, but we believe that this measure simply doesn't go far enough. The government is still letting a large number of multinational corporations get away with paying too little tax and get away with not disclosing that to the Australian people. Data that's been issued by the Australian tax office shows that 710 out of the 2,214 companies examined failed to pay any tax in the 2017-18 tax year. The companies that paid no tax included 102 companies that were reporting more than a billion dollars in total income. For most Australians, it is inconceivable that a company can have a billion dollars in income in a particular year yet pay no tax to support social security and other programs throughout this country, particularly when they're deriving that profit and that income from their operations in Australia.

Of course we understand that there are certain rules related to deductions and the ability to use those deductions—particularly capital outlays for major projects. But it's quite evident when you look at the tax transparency data and when you look at the information that's supplied by some of these companies about their operations in Australia that there's more to it than that. A lot of them are using tax havens in other countries, offering loans to subsidiaries and moving income into other jurisdictions to avoid paying corporate tax here in Australia, and that's simply not good enough. It's certainly not being a good corporate citizen. It doesn't meet the expectations of the Australian people. In many respects they are letting down their own Australian employees, who rely on taxation revenue to fund important social services: the roads that they drive on to get to work in the morning, the parks that their kids enjoy playing sports in on weekends and other important infrastructure that's funded through our taxation system.

While the average Australian worker pays 25 per cent of their income in tax, large corporate entities and companies earning over a billion dollars average tax payments of only two per cent of total income. Clearly, there is an imbalance there in the way the taxation system is working. The only reason we know a lot about this is and that one-third of large companies fail to pay any tax is the rules and the laws that Labor put in place when we were in government. These were laws that passed the parliament in 2013 about tax transparency and requiring those larger Australian corporations to report on an annual basis the amount of tax that they're actually paying. I think it's worth noting that those opposite opposed that legislation. They opposed that legislation around tax transparency in allowing the Australian public to know exactly what's going on when it comes to the amount of tax that's being paid by large corporate entities in this country.

Worse still, not only did they oppose it when they were in opposition but, once the legislation was brought in by the Labor Party in government, they then sought to undermine it and water it down. They were successful in doing that because guess what? They teamed up with the Greens. They're often criticising the Greens, but when it comes to political expediency they'll jump into bed with the Greens at a drop of a hat, just to make sure that they get what they want. That's what they did here. They jumped into bed with the Greens to water down tax transparency laws in this country.

Shame on those opposite! All it's meant is that the Australian people—Australia's hardworking taxpayers—don't know what's going on in a large number of corporations because those large corporations aren't required to report their revenue and their taxation obligations under that act. This is after they voted against Labor's 2012 tax laws, which were directly responsible for BHP being forced to pay a $529 million tax bill in 2018. Now think about all of the services that $529 million funds for Australians—yet those opposite voted against some of those laws that required those large corporations to pay those bills. The coalition is failing small businesses and Australian workers who are struggling to compete while international companies get away with paying very little or no tax at all. We need a government that gets serious about multinational tax and giving concessions to multinationals and that is focused on ensuring that money made in Australia isn't siphoned off overseas.

The other aspect of this bill that I'd like to comment on is schedule 2, permanent tax relief for merging superannuation funds. That amends various acts to make permanent certain forms of tax relief for merging superannuation funds that are currently temporary. The temporary tax relief measures were originally introduced by Labor in 2008 to help with superannuation and its efficiency, and making these concessions permanent was a recommendation of the Productivity Commission in their 2019 report into superannuation. This measure will make mergers between superannuation funds simpler. Labor supports extending tax relief for merging superannuation funds. Expanding will give fund trustees certainty when planning merger activity and will provide wider benefits to fund members and the superannuation system through increased funds scale and efficiencies.

We're also calling on the government to give members and trustees certainty about their retirement incomes into the future by meeting their commitment and by meeting the legislation to increase the superannuation guarantee to 12 per cent. Labor has a very proud track record of boosting the compulsory retirement savings of workers in this country, particularly low-income workers who would retire without adequate retirement incomes to fund their retirement if it weren't for the reforms that were introduced by Labor and Labor's commitment to increasing that compulsory rate of superannuation to ensure that retirement incomes keep pace with the cost of living and the cost of increasing incomes in the rest of the economy.

We all know that there is a rabble and a group within the coalition that have sought, at every occasion, to undermine that compulsory increase in superannuation savings. It will result in workers retiring with less in their superannuation balances, particularly low-paid workers and those who take breaks from the workforce, which unfortunately are typically women in Australia. What they try to do is undermine the retirement incomes of low-paid workers and women in this country, and for us on this side that's not on. That's not on because it means that, ultimately, those people retire with inadequate balances in their superannuation funds and they have to rely on the age pension to get by into the future to a greater degree than they otherwise would have. That puts an impost on the Australian budget moving into the future and, of course, means that it's harder for us to fund the necessary social services and other programs—particularly things like infrastructure programs—to grow our economy.

The fighting continues within the government between members and senators who like to attack the superannuation system and its key pillars, particularly a pillar like this. But this is more than a few rogue backbenchers; it's a reflection of the Liberal Party's ideology, in that they've always been opposed to the notion of universal superannuation. The retirement income review should not be used as a stalking horse for further delays of the legislated increase to 12 per cent.

Too many Australians retire without adequate income savings, which is why our super system needs to be strengthened and protected, not undermined by the coalition. Labor is committed to the legislated superannuation guarantee rise, and we call on the government to do the same, to provide that certainty for Australian workers—particularly at this time of anxiety and uncertainty about the government's track record on economic management, particularly in the context of a slowing economy—by providing a guarantee for that legislated increase and compulsory increases into the future.

The original timetable has already been delayed—it's been delayed twice—costing workers who are retiring today between $60,000 and $100,000 in their superannuation balance. Freezing the legislated increase won't lead to pay rises, as those opposite have sought to argue. Our world-class super system means that we have a $3 trillion pool of savings. This not only creates a retirement nest egg for Australians but also means investment in infrastructure and businesses, generating wealth, creating jobs and ensuring Australians own more of their economic activity in this country.

In conclusion, we support these measures but, in our view, they don't go far enough, particularly the measures related to tax transparency and laws in respect of that. Again, we call on the government to make sure that they meet their commitments to Australians when it comes to increasing compulsory retirement savings through the legislated increase in the superannuation guarantee.

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