Stuart Robert (Fadden, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

It being directly after question time, it is time for committees. On behalf of the Joint Standing Committee on Treaties, I present the committee's report, incorporating a dissenting report, entitled Report 175: OECD tax measures BEPS; International Solar Alliance-agreement; Air services-three agreements. I ask leave of the House to make a short statement in connection with the report.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is leave granted?

Mr Tony Burke (Watson, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Leave is granted for a statement that promises to be short.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I thank the Manager of Opposition Business.

Stuart Robert (Fadden, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I have been waiting three hours! Time well spent, though, in the House, can I just say. Today I rise to make a short statement concerning the Joint Standing Committee on Treaties Report 175. It was tabled out of session on Friday, 24 November this year. Report 175 contains the Joint Standing Committee on Treaties' review of five treaties' actions—the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, the framework agreement on the establishment of the International Solar Alliance and three air services agreements.

The multinational convention on tax evasion is an OECD G20 initiative designed to curb base erosion and profit shifting, referred to as BEPS. The strategies are used by international entities to minimise their tax obligations by shifting profits between jurisdictions and exploiting gaps and mismatches in the tax rules. Current bilateral double taxation agreements provide the international legal framework to prevent these practices. Australia is party to 44 such agreements and this new convention will modify these individual bilateral treaties with parties that have also ratified the multilateral treaty. However, Australia has the flexibility to apply various choices and/or reservations to limit the extent of the adoption of the multilateral tax treaty provisions. The multilateral treaty will only modify a bilateral treaty to the extent both parties' choices and reservations agree. If they do not, then the provisions in the bilateral treaty will remain.

The bilateral treaty is timely. It addresses a significant and complicated problem in an environment where multinational entities exist in multiple jurisdictions and are flexible enough to make the most profitable use of taxation differences between those jurisdictions. The committee supports this important step in ensuring every entity meets its tax obligation and recommends that binding treaty action be taken.

The International Solar Alliance is being established to deepen cooperation on solar research and development. The ISA is open to those solar resource-rich states situated in the tropics and is intended to facilitate the diffusion of solar technologies amongst those countries. It addresses key common challenges to the scaling up of solar energy. The committee notes the aspirational nature of the agreement, and we acknowledge it opens up opportunities for Australia to promote its expertise and experience in this broadening field. We recommend that binding treaty action be taken.

Finally, the three air services agreements are with the Mauritius, Israel and Hungary, and are based on a model agreement Australia has with a range of countries. These agreements are necessary to facilitate air transport services between countries, and cover access, administration, safety and security. Once again, we raised ongoing concerns that airlines operating within Australia comply with the standards of International Civil Aviation Organisation. We reiterated that, in future, the national interest analysis should indicate whether relevant notifications of this organisation by the other parties have been considered. In addition, we would wish to see responsible departments consult the Commonwealth Civil Aviation Safety Authority on any safety issues that might be relevant to individual agreements. The committee recommends that binding action be taken for all three air services agreements.

The report also contains the committee's review of four minor treaty actions. On behalf of the committee, I commend the report to the House.