Anne Webster (Mallee, National Party, Shadow Assistant Minister for Regional Health) Share this | Hansard source

This package of multinational tax avoidance measures, the Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024 and related bills, is built on the world-class, world-first legislation that the coalition developed when we were in government, despite what the member for Wills says. For a long time, multinational companies avoided paying tax in some countries by using tax havens or favourable regimes, thereby depriving countries like Australia of much needed tax revenue. Today I will highlight some glaring examples of where multinational companies have ruined Australia businesses.

A rapidly growing share of shopping and trade now occurs through a multinational company's online platform or business. When a multinational company avoids paying their fair share of tax, Australian families and small businesses are forced to carry the burden. The coalition acted on this important initiative in 2014, when we found that existing laws were insufficient to address the cunning tax avoidance strategies multinational companies employ. During Australia's presidency of the G20 in 2014, the then coalition government introduced some of the strongest tax integrity rules in the world. The OECD's Action Plan on Base Erosion and Profit Shifting followed, and that's important, because a globally coordinated effort is required. Without it, multinational companies will shift their business or activity to tax havens or countries like the Cayman Islands.

Since 2021, more than 140 countries have signed an agreement, led by the OECD, to impose corporate tax of at least 15 per cent. The OECD estimates that, if everyone signed up, tax avoidance would reduce by 80 per cent worldwide. Identifying where companies earn their money is difficult in an increasingly online marketplace, particularly when it concerns the tech giants, whom I will focus on today.

Facebook, now called Meta, claim they pay 30 per cent corporate income tax; however, that's on what they report to be Australian revenue. Facebook paid just over $30 million tax in Australia in 2021-22, the most recently available reporting year. That's just 2.6 per cent of their Australian annual revenue of $1.15 billion in the last reporting year. They claim 91 per cent of their income was not taxable. Google earned $1.892 billion in Australian revenue but paid just $90 million in tax, an effective tax rate of 4.8 per cent. They claimed that 80 per cent of their revenue wasn't taxable. Microsoft was worse, earning $6.3 billion in revenue in Australia but claiming 93.6 per cent of its revenue was not taxable—'Nothing to see here!'—resulting in them paying just $120 million, or 1.9 per cent, effective tax on gross profits. Believe it or not, there is a worse offender: Apple, who earned $9.3 billion on Australian shores yet paid just $137.3 million in tax—which was only 1.5 per cent of their Australian revenues. Appallingly, in 2018 Netflix reportedly had an effective tax rate of 0.05 per cent in Australia despite $1 billion in revenue, paying just $342,000 in tax. That figure rose to $868,000 in 2022 but is still far short of its revenue and impact on Australian society. Netflix's tax avoidance smarts aren't limited to Australia; in the USA, during the life of the Trump administration, Netflix paid US$81 million in corporate tax despite earning $10.5 billion over that period. How do they get away with this?

Into that multinational tax avoidance mix comes this package of bills, to implement the global minimum 15 per cent tax in concert with the other 140 inclusive framework member countries as part of the two-pillar solution on multinational tax avoidance. The package has been delayed by some reluctance from the United States, from both the Obama and Trump administrations, because many of the targets of antiavoidance by multinational corporations have been some of America's biggest companies. The government estimates this package of bills will bring in just over $370 million over the five years to 2026-27.

I will focus, in this context, on the lack of social responsibility portrayed by the tech giants in our society and economy. First of all, there is a shocking level of scams through social media, Google and the internet. In my electorate of Mallee, constituents have come to me dismayed at being scammed; in fact, I've been scammed myself recently. While the government is taking some action in this area, I would like to see strong action to prevent vulnerable people from being exploited by scammers. On the weekend, Westpac accused Meta of failing to deal with the scam and fraud epidemic, raising 360 scam incidents from October to this month for Westpac customers alone. Executive Carolyn McCann urged Meta to review the way the Facebook platform is being used to scam ordinary Australians. The tech giants are also facilitating significant economic harm in our communities. Amazon, Google and Meta, through Facebook Marketplace, are becoming go-to destinations for people buying and selling new or second-hand goods. Meanwhile, local small businesses with retail leases are under huge pressure.

In the media space the tech giants have the ability to target Australians on their phones, which they look at 7.8 times an hour on average, according to Tech Daily, which equates to about four to five hours a day spent looking at their phones. Data out this week shows teens are spending two hours a day looking at TikTok, an hour and a half on Snapchat and an hour on Google-owned YouTube, while children aged 10 to 12 spend 79 minutes a day on YouTube and 122 minutes, two hours, on TikTok.

Apart from these deeply disturbing statistics, the tech giants are also killing traditional forms of advertising. Streaming services like Netflix, which I mentioned earlier, have slashed free-to-air television viewership, forcing Australian television networks to speed up the rollout of their digital television on-demand services. Advertising revenue on Australian digital on-demand services is rising but not fast enough to keep up with the lost revenue on traditional free-to-air services. Teenage television viewership has reportedly fallen from 75 minutes a day in 2011 to just 13 minutes, according to Free TV. Live streaming is now 20 per cent of all free-to-air viewing, and that percentage is rising. Many new homes do not even bother installing an aerial.

I've given this subject a lot more thought recently because on 1 July Mildura suffered the indignity of, reportedly, the first shutdown of a digital television service in Australia. Former communications minister Stephen Conroy visited Mildura back in July 2010, hailing Mildura as the first place in Australia to switch on digital television. Of course, this was a positive spin put on switching off analogue television signals. Mildura is now arguably the first to lose digital signal.

Mildura has already lost its local television journalist and does not have a local television news bulletin. We used to have a healthy local journalism market. Now, all of our television news comes out of Melbourne or, if you're lucky, Ballarat or Bendigo. I cannot speak to a local WIN Network, Seven Network or Ten Network journalist with their camera. I've had to beam in via satellite on my own device. Without local journalists, TV networks just ignore local stories. Mildura people put up with the homogenised news from other parts of a very wide disconnected region due to the death of local journalism. Local radio and newspapers are struggling as well. As non-government broadcasters, they rely on advertising revenue. They are rapidly failing due to the tech giants monstering the advertising industry.

Lest anyone is thinking it, I will briefly mention that the ABC is not the solution here. The solution to market failure is not more government controlled journalism. Rather, it is to find ways to improve competition. Media competition is dying in regional Australia and the traditional Australian media. The tax-avoiding tech giants are silencing our local voices.

The coalition led the world, again, in government when we created a news bargaining code. But, under this government, the multinational digital platforms have refused to renew the deals. These deals, estimated to be worth $200 million per annum—a fraction of what these multinationals should be paying in tax in Australia—were to fund Australian journalism.

Australian media companies face all the other rising costs of doing business but compete on an unbalanced playing field against tech giants that pay nowhere near the 25 per cent corporate income tax for businesses with turnovers under $50 million or 30 per cent for businesses with higher turnovers. The coalition lowered corporate tax rates from 30 per cent for all businesses to 25 per cent. We wanted to lower it for all businesses but settled on lower taxes for businesses with turnover under $50 million. A lower corporate tax rate encourages investment and discourages the use of tax havens. Even the Minister for Industry and Science knows that.

According to the US Tax Foundation, the average corporate tax rate around the world is lower than ours at 23.45 per cent. It's 23.73 per cent in the OECD. In Asia, the average is 19.8 per cent, the lowest regional corporate tax rate in the world. There are only 20 jurisdictions in the world with a higher corporate tax rate than Australia's for companies with over $50 million in turnover per annum. It's little wonder that tech giants look for tax havens to escape our corporate tax. Let's not forget that these tax-avoiding tech giants are also failing our children and vulnerable people in the community by failing to take appropriate action against predators, scammers, sextortionists, pornography, and violent or extremist material online.

The coalition put forward the proposal for age verification online, but this government has been very slow to move towards a trial in this area. We know, from overseas examples, that age verification works. For reasons I'm outlining in this speech, the tax-avoiding tech giants' complaints about how hard age verification is should fall on deaf ears in Australia. The tech giants are acting in a socially irresponsible way in Australia and do not pay their fair share of tax, so they can lift their game on age verification.

I'm very concerned about the growing foreign influence of the tech giants because Australians are spending so many hours of the day on these tech giants' platforms with their thoughts being directed by foreign influences, not our own. Australians are shown political content from, say, the United States in precedence to Australia. I believe our political literacy in Australia is at an all-time low. Social media algorithms give users more of what they are already looking at or talking about, thanks to the corporate surveillance of your own phone, to reinforce existing biases. At least traditional media services once showed both sides of the story, giving you a diverse, informative news bulletin at six or seven o'clock to broaden your intellectual horizon.

It gets worse. We parliamentarians are expected to spend money on these tax-avoiding tech giant platforms, promoting what we have to say to ensure our voters are seeing it. Who profits from that? It's the same multinational tech giants that are paying less than five per cent effective tax in Australia. We are rewarding their conquest of the entertainment and news market by paying them to gain even more market share.

In conclusion, this bill builds on the coalition's world leadership of acting in the Australian national interest, and I believe the current government must do more. The tax-avoiding multinationals do not have Australia's best interests at heart, and we need the federal government to stand up to them.

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