Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

It is common ground that a large number of multinational companies operating in Australia do not pay any tax, whilst others pay very little. This situation is not new, and in fact this problem has been around for a long time. Liberal and Labor governments have done nothing about the problem for over 40 years and, in the meantime, profits made here in Australia have gone untaxed, causing Australia to go further and further into debt. Every Australian is now paying for the failure of governments to get multinationals to pay their fair share of tax.

Just a few hours ago the government voted against my proposal to deal with Lottoland Ltd, a multinational betting company located in Gibraltar, a known tax haven. That decision will cost Australians and the economy billions of dollars. If we can understand how we got to this position with multinationals we may have a chance to dig ourselves out of the problem. Successive governments, both Liberal and Labor, have become captives of multinational companies. They believe that if we ask these companies to pay tax they will leave Australia, jobs will be lost and the economy will spiral downwards, leaving everyone worse off.

Let us look at credit card companies like American Express, Visa and Mastercard. These multinational companies, owned by banks, are residents of tax havens. They pay little or no income tax. They provide a guaranteed payment to merchants and they recover the debt from the credit card owners. Credit card companies make money on the transactions in Australia and they make money on balances carried forward at the end of the month. Some people never pay, and they charge higher interest rates to mitigate that risk.

What would happen if the government found a way to make these multinationals pay income tax? Would these multinational companies pick up sticks and take their ball home to their tax haven? Or would they stay in Australia and make a bit less profit and pay tax? My view is they would stay in Australia. But, if they do not, there are plenty of alternative players around to fill the vacuum they would leave behind.

So what has stopped governments telling credit card companies they have to pay tax? The multinationals understand the fear of the government and they work it at every opportunity, telling them what the government needs to do to keep them in Australia. I said in my 1996 maiden speech that we must stop kowtowing to others. If we had acted then to deal with multinationals, we would now be in a stronger position as a country. The government proposes a progressive reduction in the company tax rate to 25 per cent, despite the widely held view that it will give foreign investors a windfall, while local employers, including small and medium businesses, will be worse off.

I want to turn now to the Business Council of Australia, the BCA, which represents some of the biggest multinationals in the world who also happen to be some of the biggest tax avoiders in the world. The BCA have been wandering the corridors of parliament, knocking on doors and selling their message that Australia needs to lower its corporate tax rate to 25 per cent or else the sky will fall in. Many members of the Business Council of Australia do not pay tax, and back in 1996, former Assistant Commissioner of Taxation Jim Killaly said that he estimated a loss from multinationals in Australia not paying tax of around $200 billion per year. Transfer pricing is another killer and a source of loss of taxes in Australia. When we have over 90 per cent of corporate Australia foreign owned, we are in dire straits in getting taxes out of these multinationals.

One Nation come to the issue of taxation with fresh eyes. We are not captives of the multinationals. Our feet are not tucked under the tables of billionaires with harborside mansions. We believe Australia as a nation can negotiate with multinationals for a fair outcome, and in government we would do so.

The United States, like other countries, faces the problem of multinationals not paying their fair share of tax. There is much debate in the United States about how this will be done. I understand the new President of the United States is looking at a lower tax rate, possibly 15 per cent, but on the basis that debt interest will not be deductible. The Democrats in the United States have recently introduced a new bill to deal with the ways multinationals avoid tax, and these include all the same tricks that are used here in Australia, because multinational tax avoidance tricks work in every jurisdiction.

One Nation believes that the time has come to stop being a hostage to multinationals. The world has changed, and it is time we changed the rules to fit the new game. If we do anything less we will be unable to fund our basic health, education and defence services and we will go further and further into debt. To think, even for a moment, that the only reason multinational companies trade in Australia is a function of tax rates is to misunderstand what we have to offer as a nation.

We are being sold short by this coalition government, as we have been sold short by the previous Labor government. It is time for the government to be brave and to say we will not be a hostage to multinationals any longer. If the government is willing to do that, we will hear some bold new initiatives in the May budget. If the government needs help, my door is open.

The government needs to learn from past mistakes. In 2009 Colonial Sugar Refining, CSR, sold its business to a Singaporean company. This multinational agribusiness operates in Australia through Wilmar Sugar Australia Ltd. In 2014 Wilmar reported a turnover of $1,567,605,050 but had no taxable income and paid no corporate income tax. We know the sale of these core sugar assets was a mistake because Wilmar are standing in the way of Queensland sugar growers selling their crop for a fair price.

The government needs to take into account tax compliance behaviour in making decisions about whether these multinationals can continue to operate here. It is a statement of the obvious, but no-one continues in business very long making no money or making losses. Still multinationals stay in Australia, and, year after year, we are asked to believe they make no money. Clearly something is wrong, and this has a name: it is called tax avoidance, and what we are doing is not working.

The government's response is predictable: it introduces another tax law. Today we are being asked to consider yet another lengthy tax law. This time we are being asked to agree to a law that will allow the ATO to tax diverted profits and to increase reporting and information exchange. This law, well intended, will make little difference to the conduct of multinationals. Recently the tax commissioner said he had the laws he needed to combat tax avoidance, but still tax avoidance goes on. Multinationals can outspend the government in every step of the process, including court action. If the commissioner is the farmhouse cat, then there are just too many multinational mice for him to chase. These multinational mice are willing to take the chance of being caught.

The government needs to think outside the box. Firstly, we suggest the government begin by withdrawing multinationals from the self-assessment system, so that the current onus of proof is reversed. This means that the ATO can raise a tax assessment and it is up to the multinational to prove otherwise. Secondly, multinationals need to be approached on an industry-by-industry basis, so that the business models can be better understood and the basis of taxation decided. Particular focus needs to be given to resource multinationals, including those with coal, oil and gas interests. The one-size-fits-all approach has not worked for the taxation of multinational profits.

The Australian Financial Review reports a tax case involving Chevron Australia, who in 2003 borrowed $3.7 billion from another Chevron-linked financing company. The interest rate agreed averaged nine per cent, making it unlikely any profit would be made in Australia on which tax would be paid. In a more recent development, a Chinese owned coalminer, Yancoal Australia, is buying coal assets from Rio Tinto. At the same time it is borrowing US$950 million from its parent company in Hong Kong. We hope this is not another attempt to shift profits offshore and pay no tax in Australia.

Of course, tax avoidance is not limited to multinationals. Origin Energy is Australia's leading electricity and gas supplier. But despite rising prices and a turnover of $12.2 billion, it did not make enough to pay tax in Australia.

The government must change the way it relates to multinationals. The new way of dealing with multinationals needs to include the way our Foreign Investment Review Board makes decisions. The board needs to take a more strategic and long-term view to stop selling our assets. Many countries— (Time expired)