Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

In the last sitting week I met with Chloe, Sinead, Nick, Maddison and Caleb from Micah Challenge. Nick is the chaplain at Cressy District High School and Chloe, Sinead, Maddison and Caleb are students at the school. A large number of students from across the country travelled to Canberra to 'shine a light' on global tax dodging and corruption, which robs the world of development aid finance.

I note that the largest cut in the Abbott coalition government's first budget was the devastating $7.6 billion cut in aid to the world's poor. Prime Minister Abbott and Foreign Affairs Minister Bishop are cutting billions from the budget that supports things like food programs, childhood immunisation, maternal health and treatment for HIV and malaria. The Abbott government's $7.6 billion cut to aid includes a $110 million cut to the Asia-Pacific in one year alone, despite the government's claim that its aid program would focus on our region. This comes on top of the Abbott government sacking 500 staff from the Department of Foreign Affairs and Trade, including former AusAID experts with critical experience in delivering overseas aid. In contrast to the Abbott coalition government, Labor improved accountability and effectiveness while at the same time nearly doubling the aid budget, from $2.9 billion to $5.7 billion per year.

The message from Caleb, Maddison, Chloe, Sinead and Nick was that Australia has a unique opportunity, as chair of the G20 summit in 2014, to tackle the scourge of tax dodging, which robs developing countries on a massive scale of vital revenue for poverty reduction and sustainable human development. Micah Challenge estimates that, in 2008, developing countries lost more than US$160 billion through just two forms of multinational corporate tax dodging: transfer mispricing and false invoicing. This figure dwarfs the amount that these countries receive in aid, which amounted to US$120 billion in 2009.

What should we do to tackle tax evasion? Micah Challenge says that it is as easy as ABC—with A being the automatic exchange of information between tax authorities. With appropriate privacy safeguards, AEOI is a powerful way to reduce tax evasion and is already supported by Australia, which provides information on tax matters automatically to over 40 countries and receives such information from 20 countries. When Denmark sent out 1,100 letters informing Danish taxpayers about information that had been shared automatically, 440 people reported foreign income that year which they had not previously reported. Very few developing countries have been able to benefit from AEOI, particularly if their tax administrations are not strong enough to meet requirements for reciprocal information sharing.

B is beneficial ownership disclosure through a public register that lists the true owners and beneficiaries of companies, trusts and foundations: Anonymous companies and secret trusts can be covers for crime, corruption and tax dodging. The World Bank's Puppet masters report found that, in 213 grand cases of corruption that took place over the past 20 years, more than 70 per cent used anonymous companies. Current Australian law does not require multinationals to disclose the existence of all their subsidiaries that exist in tax havens.

C is country-by-country reporting for multinational corporations. Currently, international reporting standards only require multinational companies to produce reports at a global level, making it impossible to know how much money was earned or invested or how much tax was paid in each country in which they operate. The European Union will require the same from large oil, gas, mining and forestry companies in 2015 and will require banks to disclose profits, taxes paid, subsidies received, turnover and number of employees for each country where they operate. Australia is lagging behind in this global trend towards greater transparency. Requiring country-by-country reporting makes it harder for companies to shift their profits and gives citizens access to information they need to hold their governments to account for the revenue they receive.

When Labor were in government, we put in place a significant package aimed at closing some of the loopholes for multinational profit shifting. While the Abbott coalition government has pursued in principle the agenda on multinational profit shifting, I have been troubled by its legislative actions. While the government has gone to the G20 and said it is a priority to deal with multinational profit shifting, its only actions have been to reverse parts of that package.

Thank you to Chloe, Sinead, Nick, Maddison and Caleb from Micah Challenge. You are showing real leadership while this government fails on foreign aid and fails on multinational profit shifting and tax dodging. (Time expired)