Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Today, I met with representatives from the Christian activist group, the Micah Challenge, as part of their 'Shine the light on tax dodging and corruption' campaign. It was an absolute pleasure to meet them. This group of tireless advocates needs to be thanked for their excellent work reducing the scourge of global poverty and living out their commitment to justice and peace.

In the same way, I would like to highlight the work of the Rev. Tim Costello in the lead-up to the C20, which will be held at the same time as the G20 in Brisbane. Of course, there was a C20 meeting in Melbourne just recently.

There are some one billion people that live their lives in extreme poverty—roughly one in seven humans on the planet. This sad fact is despite significant reductions in poverty rates arising from advancements in economic, medical, sanitary, technological and standard of living for vast numbers of people across the world. Now the Micah Challenge and Rev. Tim Costello have raised a very important issue—the potential development of impoverished communities is undermined by tax avoidance. Tax avoidance robs from future generations and is unfair on the current generation. It is estimated by Christian Aid that US $160 billion is lost by developing economies each year in multinational corporate tax dodging. This figure dwarfs the US$120 billion a year that developing countries receive in foreign aid.

The poorly resourced tax offices of developing countries—and indeed, I might say, of developed countries as well, given the job losses that the ATO will be hit with—are no match for the sharp business practices of multinational corporations. Clearly, steps must be taken to ensure that developing economies are not being robbed of their rightful tax income.

Successive Australian governments have sought to improve the efficiency of our foreign aid, but I do not countenance the cuts that we have seen to our foreign aid budget. While foreign aid makes up just 1.2 per cent of the federal budget, it has had to bear the burden of 20 per cent of the budget cuts, and I think that is completely and utterly unfair. We need to ensure that those big corporations which, through tax transfers, are doing corporate tax-dodging on a multinational level are made to pay their fair share of tax.

It is an issue here in Australia, where there is a question mark about some companies which, through transfer pricing, through some very clever tax deals, can shift profits overseas in the tens of billions of dollars each year. It was something in the order of $130 billion just a couple of years ago, from figures that were reported in a recent AustralianFinancial Review article on the ATO's efforts to try and tackle this. There are, potentially, tens of billions of dollars of tax that ought to be paid in our nation that are not being paid because of this.

This is why the Micah Challenge project is so important. I think we need to look at the key objectives of the Micah Challenge. There ought to be, firstly, automatic exchange of information between tax authorities; that must happen. There ought to be, secondly, a beneficial ownership disclosure through a public register that lists the true owners and beneficiaries of companies, trusts and foundations. And there ought to be, thirdly, country-by-country reporting for multinational corporations. They are three simple objectives of the Micah Challenge, and they ought to be embraced by this parliament. That is why I will be working with the Micah Challenge to introduce legislation to effect these objectives and to ensure that this issue is at the forefront of public debate. These are matters that need to be tackled as a matter of urgency.

I should thank, also, Daniel Neuhaus from the 6:8 Coffee Project in Yass. He was one of the delegates from the group. He runs a coffee-roasting business, and I wish him very well with that; it is fair-trade coffee. The point was made that he pays his tax, but the irony is that there are some multinational corporations that would pay a much, much lower rate of tax than he does, even as a very small business.

We also need to be mindful of the cuts to the Australian Taxation Office and whether they will be able to tackle these issues. My fear is that they will not be able to. There are literally billions of dollars in revenue there, from corporations that can well afford to pay it, and that is why I support the Micah Challenge in respect of this. This has the potential to not only alleviate global poverty but also to do the right thing in terms of people paying their fair share of tax.