Bill Heffernan (NSW, Liberal Party) Share this | Hansard source

Right. I only have five minutes and I need 50. I will do it on another day. I have been on this for four years. Let's deal with some facts; I am not interested in the political BS that goes on, which is part of what this debate has been all about.

We are going to live through a generation that has redefined 'sovereignty' unless we fix this issue. It is now normal behaviour for multinationals to remain competitive that they expect they can minimise their tax or pay no tax. Just to put a couple of things on the table on the risk of the redefinition of 'sovereignty': we have the US business lobby—and we have the same lobby here—saying to the US government—the IRS—'We don't mind if the tax goes offshore; we are creating jobs.' It just depends on whether you want to have public schools and public hospitals, and a Defence Force that you can afford and an ABC that you can afford.

Last year there was about $3 trillion in tax avoidance in the Group of 20. For those who do not know, the turnover in the derivatives swap market last year—most people do not even know what that is—was $700 trillion. The shadow banking market was 1¼ times the global GDP—it is interesting if you get some figures into this debate—at $125 trillion. The cost of the actual bribes that the World Bank estimates for around the world last year was $1 trillion, and the cost to the global economy was $5 trillion.

So if we really want to do something about being able to afford schools and hospitals—and not having to take Senator David Leyonhjelm's line, where he does not think we should have public schools and public hospitals—and where we should be in this chamber is not making political points against each other, which I think is BS! Let's get to business—let's get down to it. We should harmonise.

Why would Peter Costello admit that the Future Fund actually now has 17 companies in tax havens? Because there is no harmonisation. Sovereign entity in Australia has immunity from taxation not captured by a revenue base for a passive investment. A sovereign investor in Australia who actually declares the income from their production produced here for a humanitarian purpose gets charitable status. Do we really think this makes sense? Do we really want this to go on?

Of course it is up to a group of nations, because the global businesses will simply isolate you if you are the only one who picks this up. I say that if we really want to fix the job that we have to put the politics aside, we have to put national interest first and we absolutely have to understand the immensity of the problem. This is a huge problem in which no-one is breaking the law.

FIRB is a little section in government which has a few people with no power. You can argue for as long as you like about whether it is for $3 million, $5 or $6 million or $100 billion when you have to go to FIRB if you are a foreign investor coming into Australia; when you get there, you report it and nothing happens. That is why the Ord is now trying to be freeholded, so that the guy who has bought Ord stage 2 and who wants Ord stage 3 can put it on the Hong Kong market, same as you would put a housing subdivision on the market. I got that out of the guy's mouth himself the other day at the free trade agreement signing here.

This is a serious problem, where people need to understand the immensity of the problem. It is an immense problem. I got the heebie-jeebies with ADM on the Graincorp matter because they are serious tax avoiders—serious tax avoiders just like Wilmar, who is going to put the cleaners through the sugar market in Australia. It is normal behaviour to maximise the share price and to minimise tax without breaking the law. The law is completely out of date. Last financial year it was estimated $3 trillion was involved in tax avoidance globally. The US does not know exactly how much tax it missed out on, but it is between $650 billion and $800 billion.

Don't tell me about Australians, like an earlier speaker did. We are not purer than the angels—we are trying to compete with the rest of the world. The largest tax case the IRS had last year, the American tax officials, was with an Australian company. No-one talked about it—it is like the churches with the altar boys for the last 50 years being in denial about what was going on, and now they are all apologising, saying it has been going on for 50 years. That is where tax avoidance is—if we do not fix it we are going to redefine sovereignty. Getting your head around Bitcoin is another step in that direction, as a matter not of redefining sovereignty but of demolishing sovereignty.

Question agreed to.