Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

At a time of a claimed revenue emergency, you would think this government would be doing everything it could to look at and improve revenue streams. Rather we see this government based on broken promises and twisted priorities hopping into the sick, the pensioners, the motorists, the students, the ABC and SBS, and our Defence Force personnel. So we see the hollowness of their claims very clearly when we look at the lax approach that this Treasurer has taken to ensuring international companies pay their fair share of taxation. I am amongst those who recognise that there is a global dimension to this particular issue requiring international cooperation. But of course there are always things which we can do as a country to address this particular issue.

I note that the Australian Financial Review investigation in March 2014 looked at one company, Apple, and found that Australians bought $27 billion worth of Apple products since 2002. Over that period of time, the company paid only $193 million to the Australian Taxation Office—that is, just 0.7 per cent of the turnover. So there is a significant gap between this government's rhetoric and its actions when it comes to ensuring that multinationals pay their fair share of tax in Australia. The government's lack of action on this shows just how misguided the priorities of the Liberals are on economic reform.

Those opposite claim that the Senate is holding up the government's economic reform, but there is nothing reformist about the cost-shifting proposals of this government. That in essence is what this government is about—shifting costs from their own bottom line onto the states, onto councils, onto hospital patients, onto motorists and onto students. There is nothing reformist about legislation giving financial advisers free rein on the savings of mum-and-dad investors, which the Senate sent packing from here recently. To use a small business analogy which those opposite enjoy throwing around: this government is not paying its bills; it is just forwarding the invoices to somebody else. This is a government which reportedly held back on releasing its planned tax reform discussion paper until after the Victorian election. If there are worse things in store than the GP tax, $100,000 degrees and massive cuts to health and education, I dread to see what they will be. This government's policy agenda has been so rejected by the public that the Prime Minister did not even visit Victoria during the election campaign.

We cannot expect to see too much from this government on the issue with multinational tax avoidance. But Labor has a proud record of reducing multinational tax avoidance. When in office, Labor introduced key reforms that would have prevented $5 billion in revenue being moved offshore. As the current Treasurer said in 2013 when opposing the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013, 'We must really start this debate by asking whether these amendments are required at all.' He went on to call measures in the bill 'an unnecessary overreaction, more red tape for business'. As the current finance minister, Senator Cormann said on the same bill:

We do not support Labor Party knee-jerk overreactions in the face of yet another desperate attempt to raid more cash to feed its spending addiction …

It is a principle of Labor that companies that earn profits in Australia must pay tax in Australia. As I said, we do have a strong record with respect to multinational profit shifting. That is why we introduced a $5.3 billion tax package when we were in government to protect the integrity of our tax system. While willing to talk the talk on multinational profit shifting, the Abbott government has been all bluff and bluster when it comes to specific policies. Since coming into government, the coalition has walked away from $1.1 billion in sensible Labor savings measures in this space.

Multinational tax avoidance leaves small businesses and everyday Australians to pick up the slack for government services. Major companies benefit from: Australia's highly educated workforce; our extensive road, rail and port infrastructure; our secure energy supply; and our willingness to attract investment. It is reasonable that those companies should also make a fair contribution to the tax base which funds those things. Unfair tax arrangements also advantage large multinational companies over domestic Australian companies. This is unproductive, inefficient and unfair.

A recent report released by the Tax Justice Network, which was talked about earlier in this debate, found that overall the effective tax rate of ASX 200 companies over the last decade is 23 per cent. Had these companies paid the statutory rate of 30 per cent, this would have produced an additional $8.4 billion in corporate tax annually.

As the OECD's 2013 report, Action plan on base erosion and profit shifting, indicates:

… Base Erosion and Profit Shifting (BEPS) undermines the integrity of the tax system, as the public, the media and some taxpayers deem reported low corporate taxes to be unfair. In developing countries, the lack of tax revenue leads to critical under-funding of public investment that could help promote economic growth. Overall resource allocation, affected by tax-motivated behaviour, is not optimal.

Labor does not just talk about increasing transparency, we acted to increase transparency. If Joe Hockey were serious about cracking down on multinational tax avoidance then the budget bottom line would improve, rather than getting worse. By not proceeding with the sensible measures we implemented to close tax loopholes, the Australian people will forego $1.1 billion in revenue. And the government, as we have already heard, has stripped the Australian Taxation Office of the resources it needs to pursue multinational tax avoidance. Their job is being made harder because the government is leaving the tax office woefully underpowered to go up against the big global firms.

The budget shows that the government would prefer to take revenue from Australia's most vulnerable citizens, rather than from some of the world's wealthiest companies. But do not take my word for it; here is what Ross Gittins, economics editor of the Sydney Morning Herald, had to say just this morning when talking of the government's unfair budget:

But a politically stupid degree of unfairness isn't the only reason this budget was such a poor one. Its other big failing was the poor quality of its measures. It sought to improve the budget position not by raising the efficiency and effectiveness of government spending, but simply by cost-shifting: to the sick, the unemployed, to the aged, to university students and, particularly, to the states.

I could not have put it better myself.

In the closing couple of minutes of my contribution, I do want to point out the disconnect between this government and ordinary people in this country—particularly young people. Earlier this year I was privileged to meet with a number of volunteers from an organisation called Oaktree, who were undertaking an 'End Poverty Roadtrip' from Brisbane to Canberra. I met with them on 2 October this year. This organisation is dedicated to ending global poverty, and one of the ways they intend to achieve that is by addressing the issue of multinational tax avoidance.

I was absolutely inspired by these young people, who travelled to Canberra to get their petition signed and to share their personal stories with me. I met with Caitlin, Alexander, Brendan, Hume and Benjamin in my office. Aside from discussing their ambitions with me around ensuring that Australia is doing its fair share to end poverty, they also advocated steps that Australia can take to crack down on the unfair avoidance of tax by multinational companies. The Oaktree website talks about the lack of transparency in the global tax system. It is difficult to put an exact figure on the amount of money that is lost due to tax avoidance, but it is an indictment of this government that it is not prepared to tackle this issue. It is prepared to put things off and not get into looking at this issue in a sensible manner. It is, rather, interested in attacking the sick, the poor and students, and in cutting services that would otherwise be there.

So, I ask this government to get serious about this issue. Let's look at global tax avoidance.