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

At a time when the government is floating plans to raise the rate of the goods and services tax, we should look closely at whether all taxpayers are making their fair contribution.

We will not be able to do that if this government gets its way on replacing transparency with secrecy. The consequence is that some companies will be able to get away with ducking their taxes. Every single dollar that gets sent offshore or minimised with a handy loophole is another dollar that cannot be spent on things that matter—things like hospitals, schools and a liveable pension, which have been under sustained attack from the government's budget cuts.

If the government had its priorities right, it would be delivering policies that stop companies shirking their tax. It would be building on the good work engaged in by Mr Swan and Mr Bradbury, on multinational tax avoidance. Those were important reforms for bolstering the Australian tax system, for broadening the base with the possibility that we might ultimately be able to lower the rate.

Labor's multinational tax package was produced in the first half of the parliamentary term. It adds $7.2 billion to the budget bottom lines over the course of the next decade, but the Treasurer does not want a bar of it. He has had the option on the table since Labor announced our package in March. We are happy to sit down with his officials and work through how it can be implemented. It is a great Labor idea, and it is there to be stolen if the government is willing to step up to the plate on multinational tax avoidance. I do not know why this government is too stubborn to acknowledge a good tax idea when it sees it, but we do know that the issues that Labor's package goes to are important ones.

We know that some big companies are transferring money into their Australian arms and dressing it up as a loan when it is really shifting money from one pocket to the other. We know that the problem of using debt to shift profits is a serious one. That is why Labor is proposing moving from the current system, which allows firms to pick their favourite debt deduction rule, to getting rid of the two debt deduction rules that lack economic sense and sticking with the one that does have economic sense: the worldwide gearing ratio. That would allow firms to claim for their Australian operation the average amount of debt they owe to banks around the world. If your multinational group owes a lot to the banks, it can claim a lot back in tax deductions. If it does not owe the banks a cent and instead is just engaging in internal loans, it cannot claim subsidies from the Australian taxpayer—those subsidies which are underpinned by all Australian taxpayers.

The current tax transparency laws, which the Australian Taxation Office will hopefully soon begin to implement, help us hold firms accountable. They help us policymakers and the broader community see where there are problems that need fixing to create a fairer tax system. But, when Labor tries to make sure that we get good information out in the public domain, the government stand on the side of secrecy. They care far more for the feelings of a handful of big companies than they do for making sure that we have a strong tax system without loopholes.

Frankly there has been a disconnect between the rhetoric that has been spoken of by this government, by the former Treasurer, and the reality of the legislation we have seen to date. While the rhetoric has been so strong, the actions of the government have been disappointing; and this legislation is another part of that long line of disappointing action.

The Turnbull government wants to project an image of change. But, if the Turnbull government does not want to be known as a government which stands up for a handful of megarich against regular Australians, then it should cease this attempt to gut tax transparency laws. To pursue this bill is to stand up for the secrecy of large firms against the public interest.

I urge the government to withdraw this bill and to keep the current tax transparency laws in place. If they do not, we will continue to call them out for their duplicity every step of the way to the next election. We call on those community groups who care about multinational tax fairness and about tax transparency to join us in a conversation with the Australian people about this bad, terrible and harmful legislation.