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

I rise on behalf of the Australia Labor Party to oppose the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015. This bill takes transparency away from the tax system. Transparency matters; it is fundamental to ensuring that all taxpayers get their fair share. It is through high-quality transparency that we can ensure that firms and individuals pay their fair share of tax. Labor will be opposing this bill because this bill would gut Australia's existing tax transparency laws that were put in place by Labor over the opposition of the coalition in 2013. We took this action in government not from some prudent interest in the tax affairs of Australia's largest companies but in response to growing concern that some big firms are not paying their fair share of tax.

It is our understanding that the Australian Taxation Office have prepared the information that would allow them to publish information on the income tax paid by companies earning over $100 million a year, as they are required to do under these transparency measures. However, they are holding off from following through on that legislative requirement and actually publishing that information—as I said, a legislative requirement—because they are waiting on the outcome of a vote in this parliament. I would urge those crossbench senators who are wavering at this point—and urge anyone with influence on crossbench senators to tell them—not to gut tax transparency.

On this matter, I note that in the Senate we have given a notice of motion for an order for the production of documents in the last sitting fortnight. This motion seeks to have the Australian Taxation Office fulfil its reporting obligation as the law currently stands and get this information released before any change to the legislation passes the parliament. Whilst Labor hope that this bill does not pass and that the current legislation remains unamended, we want to ensure that, in the event that the government's proposal is agreed to by the Senate, the Australian Taxation Office still discloses to the parliament the information that it has already prepared under the current statute.

As I noted, the current legislation requires the Commissioner of Taxation to make the information public 'as soon as practicable' after the end of the income year. Because companies have until June of the following year to submit their tax return, this means that the earliest practical date for publication was 1 July 2015, as not all companies have filed them. Labor is concerned that, despite the current legislative requirement to prepare and publish the tax transparency report, the Australian Taxation Office is not progressing this, because the government has indicated its intention to roll back the laws, which it seeks to achieve through the bill we are debating today.

The laws currently apply to about 2,000 of Australia's biggest firms, but this government wants to carve out almost half of the companies affected and all of the private companies affected. These are extremely large firms. We are not talking about small businesses; we are talking about significant firms with a major presence in the Australian market. They represent less than one per cent of all companies doing business in this country. Labor believes it is appropriate to have tax transparency for our biggest firms and that companies should not be able to shield themselves from tax transparency by staying private rather than being public. Labor believes that the threshold should be a revenue threshold, an income threshold, not whether a company is private or public.

I ask: what sort of situation are these laws designed to address? Well, the situation as described by the Australian tax office to the Senate Economics Legislation Committee inquiry on this bill is that one in five private companies earning over $100 million do not pay any tax. That is right: the evidence of the tax collector is that one in five private companies earning over $100 million do not pay any tax. This government should be making scrutiny of large Australian private companies a higher priority.

I commend to the Senate the dissenting report by Labor senators and the Australian Greens to the report of the Senate Economics Legislation Committee on this bill. This dissenting report highlights that many of the arguments being wielded clumsily in defence of this bill are absurd, illogical and often lacking any evidence. It notes that this bill has few supporters and that the government is evidently doing the bidding of a tiny number of very, very wealthy individuals.

There were just a handful of submissions to this inquiry. Other than tax consultants and tax lawyers servicing large private firms, the only corporation to make a contribution was Teys Australia, a privately owned meat-processing joint venture with the American company Cargill, based in Brisbane. I will come to them in a moment.

It is deeply disappointing that this is the first major piece of tax legislation that the government has introduced this year and that this legislation works against minimising multinational tax avoidance. In this parliament, just as they did in the last, coalition members have consistently voted against tax transparency. They voted in 2013 against Labor's package to make multinationals pay their fair share, and now they are moving to gut tax transparency.

When Labor brought forward that bill in 2013, we did so guided by work from the OECD which suggested that Australia's transfer-pricing rules and its anti-avoidance provisions needed to be tightened up to move with some of the sharp accounting practices that some of the world's largest firms were engaged in. The former Assistant Treasurer, David Bradbury, won an award that year for being one of the world's 50 most significant tax reformers. That tax reform award was a credit to the work that Mr Bradbury, along with the former Treasurer, Mr Swan, had done to make sure that Australia's tax laws suited contemporary circumstances. We did that alongside the transparency measures because we know that transparency and reform go together.

In trying to sell this as something other than shielding their mates from public scrutiny, the government have cycled through a series of questionable arguments. Liberal ministers first suggested that we needed to roll back tax transparency because it presented a security risk to the owners of big firms. I note that the Treasury, the Australian tax office, the Attorney-General's Department and the Australian Federal Police all said they had given no such advice that tax transparency generated a security risk for the individuals involved in managing large firms.

As was identified in the dissenting report, there are many criticisms that Labor and Greens senators have of this straw-man logic being used to justify the introduction of this bill. None of it is in poorer taste than the invoking of article 17 of the International Covenant on Civil and Political Rights. Drafted at the United Nations General Assembly in 1966, article 17 of the International Covenant on Civil and Political Rights was drafted to prevent governments arbitrarily or unlawfully invading the privacy of people's homes and bedrooms. It states:

1. No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.

2.Everyone has the right to the protection of the law against such interference or attacks.

In evaluating the limits of the application section 17, the Australian Human Rights Commission observed:

… the protection of privacy is necessarily relative. Balancing the rights to privacy and/or protection of reputation with the rights to freedom of information and expression presents challenges.

In case it needed any further emphasis, the committee report clarifies that both the Senate Standing Committee for the Scrutiny of Bills, and the Parliamentary Committee on Human Rights scrutinised the bill and found no evidence that any human rights would be violated. Labor Senators and the Australian Greens senators rightly objected to the invocation of section 17 of the International Covenant on Civil and Political Rights in the strongest possible terms. As the dissenting report said, invoking this instrument is an obnoxious attempt to misguide the public, the press, and the parliament. It has no connection to tax privacy, and the claim deserves both derision and ridicule.

Another argument suggested by the government was that tax secrecy was fundamental to the integrity of our system. They said that such laws reveal too much information about companies. I agree that confidentiality is an important principle for individual taxpayers and for many businesses. But you have to balance privacy with the public interest. If you are turning over $100 million a year, you are among the most successful firms in Australia. So there is a legitimate public interest in knowing whether firms like these are paying their fair share. The Senate inquiry into multinational tax avoidance heard evidence about some companies paying effective tax rates of two per cent or less. These laws make public basic details about the total income, taxable income and tax paid by big firms so that we can better understand the contribution they are really making to Australia.

Further, much of the information required to be disclosed is already public. As noted in the chair's draft, under the existing provisions of section 3C(3) of the Taxation Administration Act 1953, the Australian Taxation Office will be required to publish the following basic information about large privately owned Australian corporations with revenue in excess of $100 million: firstly, their Australian Business Number; secondly, their total income; thirdly, their taxable income or net income; and, finally, if any income tax is payable. Much of this information is already a matter of public record, and its availability will not be affected by the introduction of this bill. The public can easily find a corporation's Australian Business Number by searching the Australian Business Register. Teys also published theirs—38 009 872 600–in a privacy policy document on their own website.

Apart for some minor exceptions, all Australian corporations must provide copies of their financial reports to the Australian Securities and Investments Commission. The public can access a wide range of often detailed personal and financial information, including copies of documents lodged with Australian Securities and Investments Commission. Financial reports can be purchased by the public, their competitors, nosey senators, or any other interested party. A copy of Teys' 2014 financial report, which was included as an appendix to the dissenting report, informs us that Teys' total income in 2014 was $52,161,000, its net income was a loss of $7,925,000 and its income tax payable was $14,881,000.

Labor Senators and the Australian Greens sensibly rejected the ridiculous arguments the government is mustering to conceal this information. Firstly, an individual's right to privacy of their income and tax information remains preserved under current legislation. Private corporations with revenue in excess of $100 million and a single shareholder are not subject to current disclosure requirements. Corporations do not enjoy the rights and privileges of natural people. It is important to note with respect to any allegations that privacy would be violated that the name and address of any current or past company directors are already available from the Australian Securities and Investments Commission.

Most recently the government has raised the spectre of big supermarkets like Coles and Woolworths squeezing their suppliers in business negotiations if they are able to find out the total income and tax paid by a firm. But does anyone really believe that these large firms do not already have access to detailed financial information about the firms they buy from? It is possible to look up one of several dozen online business databases right now and see the annual revenue of dozens of Australian food manufacturers, and it is highly likely that the big supermarkets have access to far better sources of industry information than that basic information.

Tax transparency matters because, without it, we have no way of knowing if big companies are paying their fair share. There are plenty of big firms that pay their fair share, and their contribution deserves acknowledgement. But, more importantly, it is clear that some firms do not. When companies are paying tax at a fraction of the standard rate, Australians should ask why.