Matthew Canavan (Queensland, Liberal National Party) Share this | Hansard source

I agree it is a global phenomenon but we are also talking about Australia's issues here, Senator Heffernan. Our companies pay 4.5 per cent of GDP in corporate tax. It was as high as seven per cent in the peak of the mining boom. The average in the OECD—which has been pretty flat over the last decade—is three per cent; and we are at 4½ per cent. We in this country do not necessarily have a domestic issue with base erosion and profit shifting. Nonetheless, I agree with Senator Heffernan that it is a global issue that needs some action.

When we hear Senator Dastyari also complain about the ATO not having enough staff, it is another example of hypocrisy in this debate because as we learnt in Senate estimates the other day—in the economics committee, which I think Senator Dastyari was at—the tax office clearly outlined that the 4,000-odd staff that they will be reducing over the next four years are a direct consequence of the efficiency dividends placed on them by the former Greens-Labor government. The former Greens-Labor government put in place those efficiency dividends on the tax office. They did not have the guts to outline how many staff that would mean, but their reduction in funding was made under the Greens-Labor government.

With an organisation like the tax office, I am sure something like 70 or 80 per cent of their costs would be in wages, so the only way they are going to fund those efficiency dividends is to reduce the staff, and that is what they have had to do. Given the tight budget, we of course are maintaining those efficiency dividends. When the Labor government announced those efficiency dividends, they made no change to the tax that would be raised over the next few years; likewise, we have made no changes.

Both Greens senators have also raised the issue of Treasury and the fact that Mr Parkinson said in a speech last week or sometime recently that there are vested interests that are controlling this country. I am not going to dispute the Treasury on its statements in that regard but I was surprised the Green senators raised Treasury in this debate because one thing they did not raise was the evidence that Treasury gave at the last Senate estimates. Senate estimates were only three or four weeks ago. At that hearing, I asked Mr Heferen, who I think is head of fiscal group in Treasury, very directly, when we were discussing the Tax Justice Network report that Senator Milne raised earlier: do you think the report was misleading? Mr Heferen said that yes, it was misleading.

Senator Heffernan interjecting—

It was misleading, Senator Heffernan, because they mixed up, as Senator Edwards said before, gross and taxable income. They had the wrong evidence on debt and equity ratios for Australian companies using capitalisation rules. And they also included in a table the average tax rates of companies that pay zero tax including trusts as well, Senator Heffernan, and that lowered their average. So this idea there was an $8-billion magic pie out there is incorrect in regards to Australia. But if the Greens and Labor Party want to do something about corporate tax avoidance in this country, support the R&D bill, do not just support motions in this chamber.