Bob Brown (Tasmania, Australian Greens) Share this | Hansard source

I am pleased to be following Senator Cameron and to endorse his remarks, adding the support of the Greens for this legislation. The Tax Laws Amendment (2008 Measures No. 6) Bill 2009 is quite complex. If I can just refer to one component of the Bills Digest from the library, its summary on the tax minimisation schemes that the amendments seek to prevent says:

… underlying the tax minimisation schemes using the scrip for scrip roll-over measures is the fact that these measures and the consolidation measures result in giving a market value cost base for the underlying assets of the original entity when that entity joins the acquiring company’s consolidated group.

If we did not know what it was about before, we all do now! The effect is to avoid tax avoidance, and that is a good thing. It means that where scrip-for-scrip measures are used instead of the sale and purchase of shares, which would be taxable, under this legislation taxation will be applicable to those measures, and we support that.

I take this opportunity to flag the need for legislation here equivalent to that in the United States to also end the business of corporate tax avoidance through overseas tax havens. I refer to an article in the Guardian of 4 March which underscores action being taken in America which we need to emulate, and I ask the Rudd government to seriously consider it. The article says:

The world’s most secretive tax havens are to be prised open after Barack Obama’s new administration endorsed far-reaching legislation to crack down on them.

The decision to force “secrecy jurisdictions” to reveal the identities of the super-rich and major corporations who use them came from the US treasury secretary, Timothy Geithner, at a congressional hearing and will be seen as a blow to places such as Jersey, the Cayman Islands and Switzerland.

“We fully support the legislation … on offshore tax centres, and we look forward to working with you as part of the broader effort to address international tax evasion and close the tax gap,” Geithner told the House ways and means committee late on Tuesday.

His commitment was followed by supportive comments from Gordon Brown during his speech to Congress yesterday. But the prime minister will come under intense pressure to resist the move from the City and the tax havens that are UK dependencies or overseas territories.

Britain has recently faced international criticism for blocking European measures to reveal details of those who deposit huge wealth in tax havens … 

With an estimated $13tn—

that is A$23.4 trillion—

… of untaxed wealth held in offshore centres, taxing them would add $255bn of revenue to governments – more than double the global aid budget to poor countries.

What an appalling situation it is where tax avoidance by big companies amounts to that. Who of us can forget Kerry Packer, for one, boasting about tax avoidance in Australia? I remember the assessment was that his companies were paying four per cent tax, effectively, in Australia because of their ability to hide their financial matters in overseas tax havens. This is something that the Greens will be raising repeatedly in this chamber and in the public arena. In fact, I have written the following to the Prime Minister:

Dear Prime Minister,

I am writing to ask you to join US President Obama and UK Prime Minister Brown to legislatively or otherwise move to abolish or, at least, open up tax havens such as Jersey, the Cayman Islands and Switzerland.

It is estimated that such havens allow individuals and corporations to avoid more in tax than the global aid budget to the world’s poorest countries.

The G20 meeting in London on April 2, 2009 will provide an ideal opportunity to further the cause. I recommend Australia also promote the prospect of a Tobin tax to fund a global Marshall Plan.

A Tobin tax is a tax on international money movements and profiteering on money movements. It is very minimal tax, a fraction of one per cent, but it would raise billions of dollars which could then go to helping the poorer people of the world, hence the reference to a global Marshall Plan.

These are very serious matters, but it is a tribute to the lobbying power of the corporate sector that they are not tackled. However, we now have a Labor government in place that can tackle them, and my plea to Treasurer Swan and to the Prime Minister, Kevin Rudd, is to tackle them. I have not had a response to the letter—it was only sent on Saturday—but we are appealing to Prime Minister Rudd to make it clear before he goes to the G20 meeting on 2 April that he will be supporting moves to close down or at least open up to the spotlight of transparency these tax havens. Now, they include Switzerland’s banks, which since 1934, under legislation in Switzerland, have guaranteed secrecy to depositors. We all know some of the more gross abuses of the system, including the Nazis’ use of those secrecy provisions to hide financial dealings of the worst kind. However, it is worth noting in this chamber that President Obama has moved for and already succeeded in cracking open and shining the light on at least some of the big corporate deposits held in the biggest of the Swiss banks by threatening retaliatory action in the United States if they did not.

I want to hear from the Rudd government what support it is giving to the Obama presidency and administration on these very, very worthwhile moves to crack open the ability for corporations, including major Australian corporations and investors, to avoid taxes in this country. It is an impost on the rest of the community. It defrauds our ability to fund hospitals, schools and other entities and it is time it ended. It is a very serious matter. Now that the opportunity is there, we want to hear from Prime Minister Rudd. He is going to G20 to help the United States President and the British Prime Minister in this very worthwhile endeavour.

I might add that Switzerland has its nose out of joint because it has not been asked to go to G20. It has been excluded, even though it has the seventh biggest banking wherewithal in the world. And nor should it go until it cleans up this act of hiding tax avoiders in Switzerland. We all know that Australians have been attracted to using that device to avoid scrutiny of their financial dealings and therefore avoid taxes. It is time it stopped. So there is a golden opportunity at G20 for our government to join the most powerful governments in the world to bring an end to this defrauding of the Australian public by tax avoiders. They might be few in number but the amounts involved are very big indeed. I am looking forward to legislation coming into this place in the wake of this worthwhile tax laws amendment to parallel at least the legislation that has been brought forward in congress in the United States.