Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

My question is to the Prime Minister. Yesterday the Treasurer said about the multinational tax policy that 'it will raise real revenue'. But, according to page 14 of the government's own budget paper No. 2, the government has booked zero revenue against this multinational tax policy. Why won't the government get serious about making large, multinational companies pay a fair share of tax?

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

The Labor government, in its six years in office, completely ignored the changes in the digital economy that were allowing the tax base to be eroded by large multinational companies. The reality is that the GST base in particular was being dramatically undermined—perfectly legally—by the emergence of so many transactions being conducted over the top, over the internet, by companies like Google and, more latterly in Australia, by Netflix and by others, such as Amazon, in terms of selling services and physical goods. This was the single biggest erosion of the tax base. It is not unique to Australia, but it has been happening for a very long time.

Mr Husic interjecting—

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

The member for Chifley will cease interjecting.

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

This is not a new phenomenon. Labor did nothing about it. This government is taking that on with changes to the GST, the so-called Netflix tax, with the changes that are being discussed with the states today, as we speak, to lower the tax-free threshold for goods imported from $1,000—to reduce that. All of these taxes are now much easier to collect.

Mr Pyne interjecting—

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

The Leader of the House will cease interjecting. The member for McMahon on a point of order? He will state the point of order.

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

Mr Speaker, the question was not about internet shopping—

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

No: what is the point of order?

Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Link to this | Hansard source

It was about profit shifting. The Prime Minister should be relevant.

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

The member for McMahon will resume his seat. Before I call the Prime Minister: the member for McMahon needs to state the point of order. He cannot get up and make another statement. I have warned him about that before. I am cautioning him now. There will not be a third occasion that sees him stay in the House.

Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

The first observation I would make is that we would not take very seriously forecasts about the likely collection of taxes from the honourable shadow Treasurer. After all, his mentor, the member for Lilley, forecast that the mining tax would raise billions, and it did not raise anything at all. It was a completely revenue-free tax. The fact of the matter is that the base erosion challenge is absolutely related to the internet. The honourable member may not have picked that up, but that is the single biggest element in base erosion, and the challenge of dealing with multinational companies operating, as I said, perfectly lawfully.

In terms of the specific multinational measures, the base erosion and profit shifting measures, the Commissioner of Taxation himself has said that he expects them to raise hundreds of millions of dollars in additional revenue. Time will tell, but we are very comforted by the forecast he has given.