Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Respected political commentator Peter Hartcher recently wrote that increasing numbers of Australians are asking the question: what is the point of the Abbott government? One point, you might think, given that the Abbott government came to office promising that it would deal with what it called a 'budget emergency' in order to deliver a surplus in the first year and every year after that, would be to redress holes in our tax system.

We have heard plenty of talk about the holes in our tax system through a Senate inquiry on multinational taxation, which handed down its report at the beginning of this parliamentary sitting week. Getting the multinational taxation system right should be a concern for all Australians. It is not an antibusiness measure to want a uniform tax code; it is a pro-business measure—because a tax code with too many loopholes hurts businesses that are doing the right thing.

When he was asked on ABC radio what the government was doing about the problem, Treasurer Joe Hockey said:

… in December, all companies that have a taxable income over $100 million have to disclose how much tax they pay in Australia.

He was pointing out the benefits of tax transparency, making sure that, as Justice Louis Brandeis put it, sunlight is the best disinfectant. With more information, we can tackle the problem of multinational profit shifting.

Unfortunately, what Treasurer Hockey did not say on ABC was that he was about to gut that law. Today the Abbott government introduced into parliament a bill which will exempt half the firms that would have been caught by Labor's tax transparency law from having to comply with that. That is right. They say, on the ABC, that they are for transparency; when they come in this House, they are for secrecy. That means, if this bill passes the House, that we will never know how much tax dodging is occurring by Australia's biggest firms. These laws only apply to significant firms in Australia. You have to have a turnover of over $100 million. The estimate is that there are only around 2,000 companies that will be caught by it.

What is striking about this law is that it is the first major piece of tax legislation the government has introduced this year. Mr Hockey talks a big game when it comes to tax transparency and tax reform, but when he comes into this House it turns out that he is all mouth and no trousers. He is not serious about making sure that we tackle the problem of multinational profit shifting.

My office wrote to the Treasury under the freedom of information laws asking for copies of all correspondence, in any format, to the Treasurer, the Assistant Treasurer and their staff regarding altering the scope of rules requiring publication of tax paid by firms earning over $100 million. The government have responded to that. They told us how many requests they received. Would anyone like to take a guess at the number of submissions received? Well, it is an easy number. It is a whole number. It is a round number. It is zero! That suggest that this is not the kind of sensible reform that has come out of a thorough consultation. It suggests, instead, that it is, more likely, the sort of reform that you dream up with a couple of mates after the second glass of wine at the Melbourne Club.

This is a government that is on the side of secrecy. It is not on the side of regular Australians, of small businesses, of pensioners, or of community groups who want tax transparency. The government knows that if we have a tax system for multinationals which does not ask big firms to pay their fair share then two things have to happen: we have to cut services or we have to raise taxes on the most vulnerable.

We need tax transparency because we need to make sure we have a good tax code. While this government has handed $1.1 billion back to multinationals and voted against profit-shifting measures every time it has had the chance, Labor put on the table during the first half of this parliamentary term a sensible plan, costed by the Parliamentary Budget Office, that returns $7 billion to the budget bottom line. We were following work that had been done by the OECD under their base erosion and profit shifting initiative. That means that Labor is serious about tackling multinational tax avoidance, while the coalition is in favour of loopholes and secrecy.