John Williams (NSW, National Party) Share this | Hansard source

I will get on to cost shifting, Senator Whish-Wilson, and I will get on to transfer pricing. I will take your interjection. That is why I do not like transfer pricing one bit, especially when it comes to countries and governments buying our farms, growing the food and taking it back to their country. I will give you an example: if a foreign country buys a property and it costs them $1 million to plant a crop of wheat, and it might be a good season and they harvest $2 million worth of wheat. They actually sell that wheat back to their country for—guess what? One million dollars. The country buys the wheat at half price. Costs are $1 million; income is $1 million. No profit, no tax—they just transfer it overseas. It is wrong, and that is why I am very pleased to say that Treasurer Joe Hockey is leading the fight on this very issue.

No doubt this will be raised at the G20 in Brisbane in November and discussed at length. I agree with you, Senator Whish-Wilson—this has to be a global effort. The countries have to combine together to share information on those who are dodging tax in this country, and any other country around the world. I am sure those in many countries see money transferred out of their country and tax avoidance by the big end of town, when they need to pay their fair share in those countries as well. It is Treasurer Joe Hockey who is leading this very fight to capture those in the net who make the money in this country to pay the tax in this country. If they do not, who is going to pay the tax? The small Aussie battlers, the small businesses? Or are we going to go down the road of Labor, which we do not want to go down, of more budget deficits, more borrowing—in other words, mortgaging our children's future away. That is certainly not sustainable, and it is a road to a brick wall. We have seen what the previous government did—$240 billion of government budgets in just six years and hence the $340-odd billion of gross debt we have today.

As I said—and I know my colleague Senator Heffernan will certainly continue this argument in far more detail than I have given this chamber—if you earn the money in this country, you pay the tax in this country. And I welcome Senator Heffernan's phone ringing, and countries working together—starting off with G20 in November, with Treasurer Joe Hockey leading the reforms.