Ian Macdonald (Queensland, Liberal Party) Share this | Hansard source

It is quickly becoming part of the lexicon of Australia that Labor lies, and more and more Australians understand that. That lexicon, that approach, could hardly be demonstrated more than when it comes to taxation. Anyone who might be listening to this debate, perhaps some of the newer senators, might be impressed with Senator Cameron's fine words—most of which weren't accurate, but they do sound fine—and you could almost think, 'Yes, isn't that wonderful?' But let me tell you about Labor's tax record.

I have the benefit of having been in this parliament for some time. I was here in 1992-93, when the Labor Party promised the people of Australia a tax cut. More than promising a tax cut, they actually said, 'We're going to legislate this tax cut as we approach the 1993 election, and we're going to put it into law.' The then Treasurer made a big thing about them: 'These are l-a-w law tax cuts.' Others who were around in those days will remember the l-a-w law tax cuts.

These tax cuts were introduced because all the pollsters in that period of history had the Labor Party losing the election and the Liberals winning the 1993 election. So Mr Keating thought he'd be a bit smart and impose on the next government substantial cuts in revenue by having these l-a-w law tax cuts. What happened? The Labor Party unexpectedly won the election and the first piece of legislation introduced in the new parliament was a Labor bill to cancel the l-a-w law tax cuts. So anything the Labor Party ever says about taxation you take with a grain of salt. Of course we all remember the carbon tax promise by Ms Gillard, 'There will be no carbon tax under a government I lead'. I see all the Labor people leaving the chamber when these unfortunate facts are exposed. 'There will be no carbon tax under a government I lead', remember that one? It was written in blood: 'No carbon tax under a government I lead'. What was the first piece of legislation introduced when that government was re-elected, basically on the back of that promise that there be no carbon tax? A carbon tax.

Senator Cameron also berates the government for heading down what he called the American path with health and education. Again, nobody would believe the Labor Party on health again. We all remember just last election that disgraceful, dishonest campaign by the Labor Party, about how the then government, the Liberal government, was going to sell and abolish Medicare. It was an outright lie. Never was there one skerrick of evidence to suggest that. Yet the Labor Party and the unions, particularly the CPSU were out everywhere on polling day, running the line that the Liberal Party was going to sell Medicare. I remember at the prepolls in Herbert during the election that the CPSU were out there in force, telling these outright lies, standing over little old ladies, saying, 'You know, you won't have Medicare should the Liberals win this time'. It was a disgraceful lying campaign, for which the CPSU has become infamous.

Since then, the federal coalition government has increased spending on health. Senator Cameron also mentioned education. I don't know whether he's been asleep or simply doesn't understand, but he would have heard Senator Birmingham make the most radical positive reforms of education that we've seen in a long time, with all students, no matter what schools they go to, getting an increase in funding per capita over the years ahead. In Queensland, I often interact at various happy events—handing over cheques to state schools, to private schools, to Catholic schools—and teachers, who understand these things, are grateful that someone is actually doing the right thing by education funding. I have to say, more often than not I'm at functions with Catholic schools and the Catholic education people in the north appreciate the additional funding they're getting and the fairness of the funding.

Senator Cameron and many members of the Labor Party and the Greens political party will keep railing about these personal income tax arrangements that went through, which give a greater percentage of relief to lower income people than higher income people. They keep raising issues like, you know, Senator Wong will get an extra $12,000 tax cut. They don't actually use that example; they use others, but I'll use that similar one. So I say to the Labor Party, if you think it's so bad, there is a provision for you to give those tax cuts back to the tax office. If you think they're bad and you are so passionate about it, you can give them back. The Greens political party are another one. They always rail about these things. I always tell them, 'You don't have to accept the tax cuts; you can give it back'. But I can bet you, I can guarantee you, not one of them ever will. They'll just put it in their pocket and continue to blame others for it.

I have digressed slightly from the bill, and I now want to turn to it. The government has a very, very proud record when it comes to taxation anti-avoidance. We've particularly looked at multinational companies to make sure that they do pay the right amount of tax. I'm going to indicate a number of the initiatives taken by the coalition government—initiatives which didn't even reach the talking point in the Labor government of six years! Sorry: there was one thing that the Labor government did say about tax six years ago, when Mr Shorten was an economics minister. They said that we had to have a competitive tax for corporate Australia, because otherwise Australia would fall behind in investment by corporations, and that would mean that we would fall behind in manufacturing and in any sort of work that created jobs. Those jobs would go overseas because the corporate world look around. If they can make widgets in Australia and pay 30 per cent company tax on their profits, and they can make widgets in the United States, France or anywhere else in the world and only pay 20 per cent corporate tax, where are they going to make their investment? The widgets will sell anywhere in the world; the jobs can be created anywhere in the world. So if we're not competitive in our corporate tax rates the jobs will go around the world. Mr Shorten knew that a few years ago, and he was advocating it. Now—for purely populist political envy reasons—he's changed his mind.

But the government has continued to take strong action. This includes a commitment to ensuring that tax transparency rules are effective in promoting broad compliance and public confidence in Australia's taxation laws. The government introduced the Multinational Anti-Avoidance Law and the diverted profits tax, which Labor did oppose—I'm sorry, Senator Cameron: you did oppose it. These measures have been successful in bringing a further $7 billion a year in sales revenue into Australia's tax net.

Multinational Anti-Avoidance Law stops multinationals avoiding a taxable presence in Australia. This is real initiative, real legislation, from the coalition government—something the Labor Party never did in government in six years. The Greens supported them for six years but never bothered about that either. The diverted profits tax, which the coalition government introduced, prevents multinationals shifting profits overseas. That's been around for a long period of time, but it specifically related to motor cars in the 1950s. Now it applies across the board, so it doesn't allow profits to be shifted out of the taxation system.

In the most recent budget, the government announced further measures to stop multinational tax avoidance. These included strengthening the rules that limit interest deductibility to stop companies shifting profits out of Australia, including requiring companies to align the value of their assets with the value included in their financial statements. The government also broadened the range of large multinationals who were subject to the Multinational Anti-Avoidance Law and the diverted profit tax. There are some other very strong actions being taken by the government, including the establishment of a tax avoidance task force within the ATO on 1 July two years ago. We also signed the OECD Multilateral Instrument on 7 June last year. We've doubled the penalties for multinationals avoiding tax. We've increased penalties for breaches of tax reporting obligations by multinationals. We've also implemented OECD recommendations for country-by-country reporting, to give the ATO greater access to multinational transfer-pricing information, and that's essential for the ATO to do its work. We've also aligned Australia's transfer-pricing rules with the latest OECD guidelines. These initiatives have ensured that multinationals comply with the law. Since 1 July 2016 the ATO has raised—listen to this—$5.2 billion in tax liabilities from large companies.

Australia is a global leader in the international fight against tax avoidance. We are taking strong international leadership with the G20 and the OECD Base Erosion and Profit Shifting Project. This problem with profit shifting and base erosion is not, of course, unique to Australia. It is happening, particularly, in many developing countries around the world, and that's why the OECD has been so strong in promoting measures to avoid base erosion and profit shifting. The government, together with the ATO, continues to monitor the implementation and effectiveness of our tax laws. We have a very proud record of making sure that profits earned and generated in Australia are subject to the Australian tax laws.

At an estimates committee hearing a couple of years ago, this subject came to the fore—why there were so many private companies in Australia not paying tax in a particular year. Mr Cranston from the ATO said at that hearing:

… we—

being the ATO—

look at this over a number of years, because it is certain companies are at different cycles in their business cycles. Some have losses that need to be utilised, and they get utilised in different years. And there are other reasons. When we do have a look at some of these taxpayers that do not pay tax, some companies may embark on a strong investment strategy; so they actually have strong expenditure, because they say there is not the need for profits like you often seen in public companies, where there are franked dividends required. So a lot of private businesses will expand their businesses and their expenditure levels, and therefore their profits are lower. We have seen that as well. At other times we have seen where there has been aggressive tax planning, and we have dealt with that as well.

So the government and the tax office are well aware where there is illegal tax avoidance taking place, but not a lot of the statistics show the true story. Notwithstanding that, as I mentioned previously in my contribution, the government has taken a very strong stand to ensure that companies, including multinationals, pay the right amount of tax. This commitment to ensuring that tax transparency rules are effective in promoting broad compliance with and public confidence in Australia's tax laws is a continuing and ongoing one of the government. We continue, as appropriate, to bring forward legislation to stop multinational anti-avoidance procedures and to ensure that a diverted profits tax doesn't happen so that multinationals can't shift profit overseas.

I'm very pleased to be part of a government that has a sound economic record. We understand the need to manage spending very carefully, something our opponents don't seem to understand. We understand the importance of making sure that everybody in the Australian system pays their fair share and their correct share of tax, and we will continue to do that. This bill before us today from the opposition is not necessary and it is not one that I will be supporting.