Senate debates

Monday, 24 June 2024

Statements by Senators

Taxation

1:30 pm

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | Hansard source

I rise this afternoon to speak about Australia's transfer pricing arrangements in regard to taxation. In particular I want to focus on two companies whose figures have just been released. One is Facebook, who earned $1.34 billion in revenue here in Australia recently and made only a five per cent operating profit. In other words, for every dollar they earned they transferred 95 per cent of those profits offshore. When I read that, I went and looked up their SEC filing in the New York Stock Exchange, only to see that their worldwide profit ratio was 40 per cent. You have to ask yourself why it is that Australia is only earning one-eighth of its worldwide income. The other company I'd like to refer to is Netflix. They earned $1.1 billion here in Australia and transferred 92 per cent of their profits offshore. I looked up their consolidated worldwide account figures, and their overall operating profit was 21 per cent. The question we have to ask ourselves is: why are we allowing big, foreign tech multinationals to shift so much profit offshore, rather than ensuring that they keep the same amount, or at least a similar amount, of operating profit here in Australia as what they do across their worldwide set of accounts?

The tax office has thin cap arrangements in place. For those of you who aren't familiar with that, thin capitalisation is when they have a worldwide gearing ratio that basically says multinationals cannot load up too much debt in Australia, and that debt is pretty much limited to their worldwide debt ratio. I'm calling on the tax office to have a similar arrangement in regard to profit: if a multinational company makes 40 per cent profit worldwide, for example, then 40 per cent—or a very similar amount—should be retained here in Australia.

Comments

No comments