Bill Shorten (Maribyrnong, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. Yesterday the Prime Minister said he would consider Labor's plan to make superannuation fair and sustainable. In the same constructive vein, will the Prime Minister consider Labor's plan to make multinational corporations pay their fair share of taxation in Australia, a plan that will improve the budget bottom line by at least $7 billion over the next decade?

Government Members:

Government members interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

I have not called the Treasurer. Members on my right will cease interjecting. It was difficult to hear that question. The Treasurer.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the Prime Minister. I note the plan of those opposite and I note the fact that they believe that they will raise, I think, some $1.6 billion or thereabouts in revenue from that particular initiative relating to the thin capitalisation rates. But what those opposite do not understand—or maybe they do and they have just decided to ignore it—is that the type of model that they have put forward is out of step with the OECD rules that were brought down just within the last week, and I will tell you why: because what this does not do is focus on the bespoke nature of the investments and the legitimate nature of the company operations here in Australia.

What those opposite want to do when it comes to multinational taxation arrangements is take a blunt instrument to a very sensitive area, and what they particularly do not understand is that if you use the ratios that they want to apply to these issues then they will be putting at risk serious infrastructure investment in this country, because you will be applying a higher interest cost than you otherwise would. So those opposite want to put at risk the pension fund investments of other countries, who want to invest in an infrastructure in this country, because they want to use a blunt instrument to just grab revenue.

Ms Plibersek interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Sydney will cease interjecting.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

But what they do not understand is what the impact of that might be on what the operations of these companies are. The advice that the government has is that the proposals put forward by those opposite will cost investment and they will cost jobs. The approach that the government has taken on this issue is entirely consistent with the OECD approach, and in fact in many ways—and I pay tribute to the member for North Sydney—it is ahead of the curve when it comes to dealing with multinational taxation arrangements, and it will raise real revenue. The measures that were introduced to this parliament by the member for North Sydney—

Ms Butler interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Griffith has already been warned. That is her final warning.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

have already seen the Australian Taxation Office increase the number of firms that it is working with from 30 to 80. So what you have on this side of the House when it comes to multinational taxation is actually a plan that will work and a plan that will launch.

Dr Leigh interjecting—

Tony Smith (Speaker) Share this | Link to this | Hansard source

The member for Fraser is warned.

Scott Morrison (Cook, Liberal Party, Treasurer) Share this | Link to this | Hansard source

What we have from those opposite from their time in government was an absolutely relentless ability to fail to launch on pretty much every issue. They would have ideas. We remember the pink batts, we remember the school halls, we remember the border protection failures and we remember that they always would just fail to launch. In fact, with Labor governments, you are much better off if they just do nothing, because it is when they actually do something that the damage is really done, because they cannot respect the principle of 'do no harm'. The measures they are putting forward in this area, which they refuse to provide the assumptions behind despite our request to do that, run the very real risk of putting in jeopardy investment in serious infrastructure projects in this country, because they are trying to use a blunt instrument with the global ratio rule, which does not provide the level of customisation that you need to look at in individual circumstances. (Time expired)

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Small Business and the Assistant Treasurer. Will the minister outline what action the government is taking to preserve the integrity of the taxation system and confidence in the Australian economy?

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

I would like to thank the member for Corangamite for that very important question, and can I say the people of Corangamite have made a very excellent choice in their advocate in this place. Serious financial crime has the potential to undermine the Australian economy. Its estimated cost to the Australian taxpayer is around $15 billion every year. That is why today, in this place, the Minister for Justice and I were able to launch the Serious Financial Crime Taskforce. This Serious Financial Crime Taskforce is made up of eight agencies, led in many respects by the Australian Taxation Office, which received in the last budget $127 million to undertake those activities and to ensure that they have the financial capacity and the powers that they need to do the job. The job that they need to do is to make sure that they can catch those people who are engaged in international tax evasion, fraudulent phoenix activity and also the abuse of trusts, to name just some of those activities. It builds off the success of Project Wickenby, which was a successful taskforce that convicted 46 individuals of serious financial crime and recovered almost $1 billon in revenue. The Serious Financial Crime Taskforce is already acting. From 1 July this year, the Serious Financial Crime Taskforce has eight investigations on foot and it ranges across 10 international jurisdictions.

The Australian Taxation Office has already instigated over 580 audits and has raised $85 million in liabilities since 1 July this year. So we are not waiting. We are closing the net on those people who are looking to seriously attack the integrity of our tax system and we will bring those people to justice who ought to be brought to justice. It is incredibly important to know that, when we bring them to justice, penalties are very severe: up to 25 years imprisonment for those people who are engaged in money-laundering and up to 10 years for each offence for those people who are engaged in fraud under the Commonwealth Criminal Code. There are very significant civil penalties as well, where people have to pay up to 90 per cent of the tax avoided, plus statutory interest. We are serious about financial crime and we hope that those opposite will join us in that fight.