Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Milne for that question, and I mean that sincerely because it enables me to address some of the flaws that are in that particular report that I am indeed aware of. Let me just say right up-front: of course, all of us in this chamber, I am sure, would agree that every business that generates profits in Australia should pay their fair share of tax, consistent with the laws of the land. In Australia, we do have one of the toughest anti-avoidance laws in a tax system in the world. That does not mean that we sit on our laws and do not keep on looking at how we need to respond to any emerging issues in the marketplace. Of course we do. And we do have a particular challenge in dealing with the particular issues around businesses that operate in different parts of the world.

The paper that Senator Milne refers to and the reporting of it through Fairfax was a particularly poor contribution to what is a very important debate. For example, Fairfax did not point out that the paper actually shows that Australian companies pay a great deal of tax. Did anyone read in the Fairfax papers that the report by the particular justice network that Senator Milne talks about shows that Australia ranks second-highest in the OECD when it comes to company tax revenue as a share of overall revenue? I do not think so. In fact, the first in that list is Norway. For Norway they include royalty-like revenue from their state owned oil companies. So to compare us is not quite accurate. Furthermore, the paper—and this is where the paper is quite misleading and quite dishonest—focuses on accounting profits and earnings before interest and tax rather than Australia's actual corporate tax base. In Australia, companies are legally and legitimately permitted to make deductions from accounting profits for depreciation, interest, royalties and other expenses. The corporate tax base is what is left after these deductions are made. Incidentally, unions—in particular, the ACTU—have previously argued— (Time expired)