Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

I certainly acknowledge Senator Heffernan's role, as I have done before. The groups that actually got this on the agenda where the community groups who came to Parliament House. I am sure they have walked into everyone's room in the last 12 months, the two main ones being Micah Challenge, who came here in June, and of course the Oaktree foundation. They visit us every year. Community groups right across this country have run a very strong campaign for tax justice and the lack of common reporting standards, problems with profit shifting, base erosion and transfer pricing—all the different techniques that are used by multinational corporations to minimise tax.

I think we need to give credit where credit is due. It was put on the agenda at the G20. However, Senator Heffernan is absolutely right in what he said as he walked out the door. He has been banging on this drum for over four years and Senator Milne has been banging on this drum for years—the issue of common reporting standards. When I did my Securities Institute course, back in the mid-nineties, there was an issue about trying to get common reporting accounting standards across multinational corporations. They were impossible to value because they used different accounting standards between countries. It is not even in the last five years; this issue has been around for well over 20 years. Since I last spoke on this we have had the Luxembourg leaks. We have a very chilling snapshot of the amount of tax being avoided by large multinational companies using loopholes.

Senator Dastyari is right about one thing today and that is the Tax Justice Network report was looking at the potential taxes that could be paid by corporations if they paid their fair share of tax—that is, the tax that would be levied at the corporate tax rate. There is no denying that the various ways they go about deducting tax are legal. This is a problem that the Greens have raised before—that is, where the system allows companies to pay virtually no tax. Glencore is an example that I raised at question time over six months ago with Senator Cormann—earnings of $15 billion and paying no tax. If the system allows that to happen, then it is pretty simple that we have to change the system. We have to look at the laws and the regulations, starting with information sharing. Looking at the integrity of our tax base is good start. But if we are going to allow the types of financial engineering which especially multinational companies use, then it is really going to be to naught. We will be banging our heads up against a wall if we still allow them to make these deductions.

Senator Edwards spent at least half of his discussion today talking about what a waste of time this was and why we were having an urgency motion. I would like to remind Senator Edwards why we are debating this urgency motion. The government put this matter on the agenda at the G20—that is good; congratulations—but this is going to require a very high level of action and political support. Top-down political support might be apparent now but it has to transfer into action. I want to read you a quote from the author Kerrie Sadiq, Professor of Taxation at QUT Business School, where she is talking about the G20 tax reform:

The political will must exist if outputs are to be realised in a practical sense. Governments are going to continue to be lobbied by those with vested interests. Some groups and authors suggest multinationals are doing nothing wrong, while others suggest there are no solutions to a broken tax system. Clearly, the G20 leaders do not agree and these voices are likely to become less vocal.

Welcome to the world of the Australian parliament. It has been my biggest insight in the last two years being near those vested interests and special interests that run this place, especially this government. While we are off to a good start, I have absolutely no doubt that behind the scenes there is significant pressure to slow this down. Why, for example, are we doing this a year later? Why are we coming to the party on information sharing or the disclosure of companies and what tax they pay in this country a year after the other countries have come together on common reporting standards? Why does it take Australian corporations that much longer to comply with new accounting standards, all designed to reduce tax minimisation?

These are issues that we have been asking Treasury at estimates time, but it is a question for which we have not had a clear answer. Senator Cormann mentioned giving companies time to adjust by trying to find middle ground, but it seems to be okay for corporations overseas. This has been on the agenda for a long time. There is an urgency right now, today. We have a revenue crisis in this country because this government has removed a price on carbon, which was going to bring $18 billion to this country in revenue, not to mention lower emissions that lead to global warming and help to incentivise the transformation of our economy, the jobs and the innovation that this country desperately needs.

They have also removed the mining tax. They have not got the guts to fix the mining tax to solve a revenue crisis but they are happy to take money off the poor, the sick and the needy in this country. We need to remember the words of Ken Henry before he left. I have to say I was impressed by Dr Martin Parkinson's slam on the government as he left last week, saying almost exactly what Ken Henry said when he left as Secretary of Treasury—that is, it is vested interests and special interests that run this country. If we cannot take them on politically and get them to pay their fair share of tax, or prevent their RET-seeking behaviour, which is very common to big companies trying to look after their stakeholders and shareholders first, then what hope have we got?

It is good to see that, at least in the G20, we are getting some action together to try and crack down on tax minimisation, at least starting with information sharing. It has been raised twice today: why are we cutting so many staff from the ATO when we have already seen that so far the tax department has identified and brought in an additional $480 million of revenue? There is a figure for Senator Heffernan, who is waiting over at the door: $480 million has already been identified and recaptured through the start of information sharing. And there is plenty more potential when it comes to private tax avoidance as well. We have seen figures of up to $20 billion of revenue at risk that has been avoided from private individuals in this country, let alone multinational corporations. So there is plenty of scope there to recover this money.

Transfer pricing is something I am sure Senator Heffernan is going to talk about—another issue that needs to be confronted about the way we do business with multinational corporations and in our global economy. I would like to give a quick plug in the little time I have left for why we do not put in place binding agreements for information sharing in the trade deals that we sign in this country. It is okay to have G20 and have that as a forum. Given that we have just signed five bilateral trade deals—with Korea, Japan, China and we are negotiating a large deal with a transfer partnership agreement.

With this regional cooperation and economic partnership, why don't we include things like tax avoidance and information sharing in those deals? It is so simple. Our negotiators are sitting down with negotiators from other countries—and these deals are being driven mostly by lobby groups and business groups and vested interests—that is the time to confront this. The Greens firmly believe that is the time to confront fair trade issues, like binding environmental standards, and ethical and social standards like wages. These are things that can be dealt with in trade deals very effectively. It is good that it started in the G20 but we could do a lot more in our region to crack down on tax deduction.

Lastly I would like to talk a little bit about digital companies. They are a specific target for tax avoidance. We noticed recently—in estimates through Senator Milne's questioning—no tax return was even being lodged by a company the size of Facebook. Under a loophole in Australian corporations law Facebook was allowed to claim that they were a small company and therefore get an exemption from even lodging a tax return. So ASIC is off chasing that now, and we hope that they will get some information for us before next estimates. Either way, there are lots of ways we can start addressing tax minimisation and start bringing revenue back into this country.