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

My first reaction when reading the title of the bill, the Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill, was: 'Great! Fantastic! Finally the Australian government is doing something about this desperate issue!' For 23 years I have been harping on about the mega-wealthy multinational companies who are more than happy to operate in Australia and build their unbelievable profits here thanks to the purchases made by the Australian people. Yet these mega-sized companies pay very little or even no tax in Australia.

There are around 700 multinational companies operating in Australia, and too many of them pay no tax here at all. These multinational companies rub their hands with glee at the stupidity of our government and its tax regime and at our stupidity, over the years, in providing concession after concession to outsiders, letting them earn their big profits here and then allowing them to ride off into the sunset with their bursting saddlebags, not paying any tax to contribute to bettering the lives of the people who helped deliver those profits.

Australia is a soft touch on the international scene when it comes to taxing foreign conglomerates that operate here. Everyday Australians—mums, dads, the elderly, workers, and teenagers with their headphones and music purchases—contribute to the incomes of these multinationals. Isn't it only fair then that those companies pay tax on their profits here? Wage earners here pay tax. Australian small businesses pay tax. Larger businesses pay tax. But those multinationals mostly don't pay tax here. Our current legislation is based on tax being paid on paper based profits, so the strategy of the multinationals is to maximise their on-paper expenses in Australia and minimise their revenues. On paper they have made no profits, so they pay no tax. On top of that, their profits are taken offshore. Some even bring their own workers into Australia, who then leave when the work is done, taking their earnings with them. So there is very little benefit at all to Australia from many of them operating here.

This has been a problem for a long time and it's having a debilitating effect on Australia. So when I saw this bill on the agenda, with its encouraging title that seemed to show some promise, I was pleased. I was pleased that the government was finally showing some initiative in attacking this multinational tax issue head-on. But that is very much where my excitement came to a crashing end. After examining the contents of this bill and realising exactly what it actually does, I was deflated and my heart sank.

This bill has a catchy title that gives you the warm fuzzies, but it actually does not do much, broadly, about the stated problem. It has a mix of initiatives that are very technical, wordy and confusing and have very little to do with the huge issue that the bill's title suggests the bill is dealing with. The bill is a massive let-down. It could be very well described as a con job. I would say the title is misleading, and I caution the Australian people to avoid being gullible and being sucked in by the notion that the massive issue of multinational taxation is being addressed in any real way here.

Foreign-owned multinational companies that operate here thrive on the strategy of moving their profits from one international jurisdiction to another until they end up landing in a tax haven. Part of the problem is that Australia is a signatory to a large number of double taxation agreements, which are open to abuse and add to the opportunities to avoid paying tax in Australia. The Australian tax office may have all the laws it need, but it cannot expect to audit and litigate every multinational to secure payment of tax which would ordinarily help the Australian government pay down debt, undertake national infrastructure projects and generally make life better for the Australian people.

Unfortunately, with this bill emerging in the parliament, it becomes clear that the government is still not doing anything close to what it needs to do to tackle the massive issue of multinational tax avoidance. Schedule 1 of this bill tightens the rules on thin capitalisation, which concerns the amount of interest paid on debt by a foreign controlled entity. This change will generate a $240 million windfall for the Australian government in 2020-21 and 2022-23. Wow! The changes will make it clearer to the multinationals that they must use their own accepted values of their assets, liabilities and equity capital in tax reporting. It removes the ability of those foreign companies to revalue—probably meaning devalue—assets, specifically to improve their thin capitalisation position from a taxation reduction point of view. This will also ensure that foreign controlled tax entities in Australia are treated as both outward investing and inward investing entities. Like I said, this is a technicality that really fails to overwhelm and also fails to set the national accounts on fire too.

Schedule 2 initiates changes for online booking agents that manage accommodation in Australia while operating from overseas. The online hotel booking providers will be required to register for the goods and services tax and so collect GST and remit it to the government. That change will generate an estimated $15 million in the three financial years from 2019-20 to 2021-22. Schedule 3 of this bill proposes changes to the luxury car tax on reimported vehicles. These initiatives introduced via this bill are really just tidy-up provisions; they might tweak a small number of taxation issues but they fail to acknowledge the big picture. We need real repairs to the taxation regime to address massive multinational taxation avoidance.

Here are some background facts that have been raised regularly by me in my time in politics. Around 75 per cent of the tax revenue that enters the coffers of the Australian government comes from individuals, the ordinary and everyday Australians who work hard each week to pay their living expenses, mortgage, food, petrol and other costs. Three-quarters of the money used by government to provide services to Australians comes from its citizens and residents. The other 25 per cent of government tax revenue comes from company taxation. Now, 98 per cent of that 25 per cent comes from companies that are Australian owned, and two per cent of that 25 per cent comes from multinational companies. Two per cent! That means Australia earns just half a per cent of its total tax revenue from multinationals.

These multinationals, who I mentioned at the outset, are happy to use Australia to boost their global profits. They include firms like Facebook; Google; Amazon—yes, the online store where your kids buy their headphones and jeans; ExxonMobil, which is worth $29.2 billion globally; Shell, which is worth $388.37 billion; American Express; Visa; Mastercard; oil giant Chevron, which is worth $158.9 billion; and the rest of them. They pay negligible tax here, yet the infrastructure they use—our NBN, the phone system, our legal system and also our Defence Force, to name some—is paid for by the Australian taxpayer. The Defence Force is of particular relevance in this matter in relation to the security of the offshore platforms operated by the global oil and gas companies.

The view of one 20-year former senior expert at the Australian tax office on this multinational tax avoidance is that it is modern-day theft on a grand scale. She has described it as white-collar crime. I agree with her. And here is the real kicker: we're talking about the sorts of dollar figures that would change the lives of everyone in Australia. We're talking about colossal amounts of money from gas fields off the coast of Western Australia that could wipe out the Australian debt. Wouldn't that be something? It's a shame that more people—including the former Prime Minister, the current Minister for Resources and Northern Australia, the Minister for Finance and journalists—haven't taken notice of these issues as they are raised.

When it comes to the big names on everyone's lips these days, it is easy to see how negligent the multinationals are towards the people of Australia. The so-called GAFA—Google, Amazon, Facebook and Apple—don't give back to the people of Australia in any significant way via our tax system. Here are some figures: Google in 2016-17 earned almost $1.5 billion in Australia, yet paid just over $33 million in tax, equivalent to around 2.2 per cent of its income. Amazon corporate and web services earned a total of $455 million, almost half a billion earned in Australia, and paid $10.4 million in tax, equivalent to around 2.3 per cent of its income. Facebook earned $331 million, and paid $12.6 million in tax, about 3.8 per cent of its income, and Apple earned almost $8.1 billion and paid $81 million in tax, around just one per cent of its income.

When it comes to oil and gas, the figures get worse. In 2016-17, Chevron Australia Holdings earned $2.24 billion in Australia, yet paid nil tax—no tax. As I mentioned earlier, this is a company worth almost $160 billion globally, yet it paid no tax over recent years. ExxonMobil Australia is another example: in 2016-17 it earned almost $8.4 billion in Australia, yet it paid no tax—nil. ExxonMobil is worth $290.2 billion globally, yet it didn't qualify to pay tax on its Australian operations. I'm sure many hardworking Australians would love to be treated as kindly by the Australian government as these multinationals are.

At present, Australia's gross debt is at $546 billion, representing 28.1 per cent of the GDP. Let me put it in simple terms: that is like every man, woman and child having a personal debt to a foreign country of approximately $21,400 each. The interest we pay on the gross debt per year is $18.5 billion, equal to one per cent of GDP per year, or $50 million per day. All of us who have families and need to stick to our weekly budgets understand the folly that would hit us quick smart if we borrowed to pay the interest on our borrowings. Wouldn't it be nice if the many huge multinationals paid a fair rate of tax, so Australia could pay off some debt, reduce our interest bill and start putting money into the infrastructure and services that would help make Australia a better place? It's a shame that this bill with its interesting title doesn't do more of what that title suggested it would do.

The need to rectify our taxation regime when it comes to multinationals is a big deal. It is a matter that should be much, much higher on the Australian government's priorities list. One Nation includes this as one of its major policies. Our view is that foreign-owned multinationals have breached their social licence to operate in Australia by not paying their fair share of tax. As mentioned earlier, by not paying tax on profits earned in Australia, these big companies do not contribute to the costs of the infrastructure they use to make their profits. Everyday Australians are paying for that hard and soft infrastructure that helps those companies to make their profits. Our comprehensive policy says this:

One Nation rejects the argument put up by foreign-owned multinationals that it is unfair to change tax policy after they have made their final investment decision and that such action will risk future investment in Australia.

The truth is that too many companies make investment decisions based on the fact they will never pay corporate income tax. When it comes to gas in particular, which has additional legislative problems, I will quote from our policy again:

As it stands the only way Australians will benefit from the export of our vast gas reserves in Commonwealth territorial waters is to buy shares in these foreign-owned petroleum companies, because these companies do not pay for our gas, they do not pay tax on the profits made from our gas and they do not reserve any of our gas for domestic use—

in many cases.

We have the weakest fiscal regime for natural gas in the world but it is not only the petroleum industry which is of concern.

One Nation provides a solution to fix the problem: get these foreign-owned multinationals to pay a fair share of tax on their Australian profits. Again, this is from our policy:

We believe foreign-owned multinationals should be progressively removed from paying corporate income tax and transitioned into a tax system based on activity transactions.

By way of example, we would put a royalty of 20% on the value of gas taken at the wellhead using meters.

These transactions are easily enough verified and royalty easily calculated. The companies would then have no further tax obligation in Australia.

Let me just inform the Australian people that offshore they don't pay royalties. Royalties are claimed only on onshore resources, so we don't collect royalties on our gas offshore. Our policy continues:

It is difficult to estimate the tax that would be collected by putting 700 multinationals in a transaction based tax system. But these companies pay next to nothing now, our view Australia can only benefit.

We estimated the tax collected from these 700 companies could be in the order of 24 billion dollars a year based on a 9% return on their known capital investment in Australia of 1.4 trillion dollars.

We propose that step by step foreign-owned multinationals would be taken out of the current tax system and transitioned to a new transaction based system appropriate to their industry.

In respect of the—

over $300 billion—

of tax credits accumulated by a clutch of foreign-owned petroleum companies, we would cease the special provisions which apply to them, including uplift factors on expenses of 18 to 30% a year.

I thank the government for putting forward this bill, because it again highlights the massive problem that we have here in dealing with the taxation of foreign companies operating in Australia. While the measures in this bill might well tidy up some relatively tiny taxation issues, its impact would be negligible when it comes to the overall flow of potential taxation dollars that are being lost to the Australian people through the failure of our taxation regime. I encourage the government to take a leaf out of One Nation's book, read our well-constructed policy and feel free to implement some of our initiatives. Let's take real action in clawing back the billions of dollars in taxation that should be paid by multinationals toward the needs of the Australian people.

I'm sick and tired, as I'm sure the Australian people are, of hearing the same old rhetoric from the Labor and Liberal parties about multinationals not paying their fair share of tax. Under your leadership, it's never going to happen. The Australian people want real change. They're sick of being gouged not only through paying income tax on their wages but also through the GST and the other high taxes in this country. It's only from election to election that these promises are made. You'll call in the multinationals. You want investments in this country. For just about everyone who wants to invest here, you tick it off and invite them into our country, but they don't pay taxes here. You think that because they employ a few people or they build the infrastructure it's a great investment, but at the end of the day, when the infrastructure's built and the workers are gone, what do we end up with? Nothing but raping this country of our resources.

If we got rid of the PRRT in northern Australia or just reduced it from 15 per cent to five per cent, the figures show we could actually get $6 billion in income over the next 10 years just from that. But you allowed the multinationals to come in and take our gas. Japan are taking our gas. They're actually getting more on it than we are in excise revenue, at nearly $3 billion. We get nothing here in Australia from that gas, and now they're turning around and we're buying our gas back from them more cheaply than they're buying it from us. It's an absolute disgrace, and the people in this parliament should actually have a look at this, make sure that multinationals pay their fair share of tax in Australia, and stop welcoming them down here. If you're going to give tax benefits to anyone, give them to the Australian companies, and give them the incentive to actually start up their own businesses here in Australia instead of taxing them to the hilt and letting multinationals get away with everything.