Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

I present an interim report of the Economics References Committee on corporate tax avoidance.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

I rise to speak to the interim report of the Senate Economics References Committee inquiry into corporate tax avoidance. I note that while this is not the final report of the work of the committee on this matter it is a significant contribution of work and it is a significant interim report.

The inquiry into corporate tax avoidance will continue into the second half of the year, with a provisional final reporting date of 30 November 2015. In this, the first of our interim reports, there are 17 recommendations covering four areas: evidence of tax avoidance and aggressive minimisation, multilateral efforts to combat avoidance and aggressive minimisation, potential areas of unilateral action to protect Australia's revenue base and the capacity of Australian government agencies to collect corporate taxes.

It is expected that the final report will focus primarily on transfer pricing and profit shifting with a secondary focus on excessive debt loading, foreign companies avoiding permanent establishment in Australia, the use of tax havens, exemptions from general purpose accounting and the role of private accounting firms in tax avoidance.

The interim report makes recommendations over the four broad areas I outlined earlier. Firstly, that there should be more transparency and more disclosure of the revenue that is earned in and flows out of Australia and into low-tax jurisdictions. Secondly, that the committee agrees that the current government is right to support multilateral efforts to combat aggressive tax avoidance through the OECD base erosion and profit shifting but also believes that this should not and does not prevent us from taking unilateral action to preserve our revenue base. Thirdly, we offer possible suggestions for more reporting by the ATO to parliament, including a public register of tax avoidance settlements reached and what the experts at the ATO think is effective tax policy, what they think should be tweaked, what their estimations of foregone revenue are and any potential improvements to the system. Finally, we offer some suggestions and some minor tweaks to improve how agencies like ASIC can help the ATO collect corporate taxes.

I do not believe these recommendations are controversial. They will improve the information that we all have. As the inquiry continues it will focus on some more controversial issues, including transfer pricing and profit shifting. There is also likely to be a secondary focus on the use of tax havens, the role of private accounting firms in tax avoidance and foreign companies avoiding permanent establishment in Australia.

The evidence from this inquiry has demonstrated just the size, the scope and the nature of this problem. While this is not a problem or an issue that all firms are engaged in and certainly it is one, with the evidence that we have seen, that is largely being engaged with by multinational firms operating subsidiary operations in Australia, the size of this problem, the scope of this problem and the nature of this problem should not and cannot be ignored.

There is anger out there in the community. There is anger that there are companies that are able to behave in such a way all of which, in the evidence that we have been presented so far, has been legal, all of which has not demonstrated illegal behaviour from the evidence that we have seen. The concern out there and the questions that people are asking are: how is this type of behaviour legal? How is this type of behaviour allowed? How do we have a structure, a system and a set of rules that allows a lot of this behaviour to go on and allows a lot of this behaviour to be able to be ongoing?

I want to thank some people in particular for the incredible work that they have been able to do in the production of this report. Firstly, there are the people who brought this issue to our attention from the Tax Justice Network and from United Voice. I want to particularly thank from United Voice Patrick Gorman, Jacqui Woods and Madeleine Holme and also thank the former national secretary of that union. Again, the report that was initially produced, as they outlined, had a lot of technical attempts to be able to calculate some data. Some of the techniques they used were crude but the crudeness was designed to be able to make the case as to why this is an issue for further investigation. I want to thank the Tax Justice Network, in particular Mark Zirnsak, Anthony Reed and Jason Wood.

I want to commend the work from Chris Jordan and his team from the Australian tax office for their cooperation with the work of this inquiry. Again, not everything that was said was something that I would necessarily have agreed with on all matters to do with the Australian tax office, but the way in which they engaged with this inquiry, the way in which they engaged with this interim report deserves to be commended.

I want to thank the incredible work of the senators on this committee. I want to thank in particular Senator Sean Edwards and his staff and his team. I want to thank Senator Canavan and his staff. I want to thank Senator Xenophon and his staff. I want to thank Senator Ketter and his staff. And I want to thank Senator Whish-Wilson and his staff. But in particular I also want to extend my sincere thanks to former Senator Christine Milne and her hardworking staff who have pushed many of these issues that we considered in this inquiry. There is no doubt that Christine Milne's 25-year public contribution has played a huge role in putting this issue front and centre, and it would be remiss of me not to recognise that it took Christine Milne to actually first bring this issue to my attention. I am proud of the work that has been done and the work that the committee will do.

I also want to make special mention of the Labor shadow economics team and the guidance and advice from them, including Andrew Leigh, Chris Bowen, Bernie Ripoll and Ed Husic.

The work of the parliamentary library has been sensational. The amount of research that they have done in preparing some of the reports and information that has really informed this debate is truly worth commending. I want to thank Catherine Lorimer, Indra Kuruppu, Kai Swoboda, Jonathan Chowns, Liz Wakerly and Les Neilson. I hope I have not missed anyone. I certainly also want to acknowledge Anne Holmes, the former head of the economics team at the parliamentary library, who has moved on to bigger and better things.

The team from the Senate economics committee staff is sensational. Dr Kathleen Dermody and her staff are the most overworked committee in the country. I am so sincerely thankful for the incredible work that she does and especially, without mentioning everyone who works in her team, Alan Raine for his advice, his crisp writing, the long nights, the early mornings, the weekends and the incredible work that has been produced in this.

I do also want to take the opportunity to thank my own team and my staff and the work they do, in particular Cameron Sinclair, who has really driven a lot of the work behind this report.

But I want to say that I believe that, while there are different views on how these issues can and should be dealt with—and I note there are further comments from the Greens and there is a dissenting report from the government—I think there is a consensus as to the enormity of the problem and there is a consensus to the significance of this issue. I believe, while people in this chamber in this place may come to this issue with different techniques, with different strategies on how to tackle it, I do not believe that there are people in this debate in this chamber who come at it with any bad intent or any intent other than actually being able to tackle this issue.

I believe there are some simple, practical steps that we can and should take immediately. I believe they are outlined quite succinctly within the report. I want to thank everybody for the work that they have done and the work they will continue to do as we move on from this interim report to the production later in the year of a final report.