Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by the Leader of the Australian Greens (Senator Milne) today relating to taxation policy.

It is not a submarine, but something else sinister and dangerous is lurking below the surface—that is, tax dodging. It seems as though Senator Heffernan is the only one in the government throwing depth charges trying to flush out this issue. I appreciated Senator Milne asking a question today on where the government is at in relation to a global approach to cracking down on tax minimisation strategies or tax dodging.

This issue has been on the table; it has been discussed by OECD countries for several decades now. Recently, at the G20 there has been focus on this issue. It is an important issue for us in Australia because we are in a so-called budget crisis or a so-called budget emergency and we are trying to cut costs and take money off some of the country's most vulnerable citizens: pensioners, the unemployed and the sick. But we are not prepared to tackle the big end of town, who makes hundreds of millions or billions in profits and shift their cost bases offshore.

The issues that have been looked at specifically relate to transfer pricing, base erosion and profit-shifting by multinational companies. On top of that we have a push now to try to recoup billions of dollars of lost revenue from private individuals who are using tax havens. The report that Senator Milne referred to in her question was written by the Tax Justice Network. They are an international group focused on investigating tax avoidance. Their report says that the government is losing out on at least $8.4 billion in tax each year, which is substantial, but is probably the tip of the iceberg. They went on to say that there is substantially less than the 30 per cent corporate tax rate being paid by the majority of companies listed on the Australian Stock Exchange. They have listed some companies, such as James Hardie, which I have asked Senator Cormann about in question time previously. Westfield Retail Trust pays no tax in this country. They also say that Rupert Murdoch's Twenty-First Century Fox pays only one per cent tax, and casino group Echo Entertainment pays an effective tax rate of five per cent.

If we are serious and ridgy-didge about actually trying to fix this country's fiscal situation, it makes a lot of sense to go after the people who are not paying their fair share of tax. I am glad that Senator Cormann said that he agreed that the fundamental and sustainable principle should be that you pay taxes where you make the profits and where the value is added, but this is clearly not happening. It is not necessarily happening because big corporations are doing something illegal. It is happening because there are loopholes between countries that allow tax minimisation strategies to be pursued by companies. If we cannot claim that it is illegal, we have to change the system and the laws. This is what is being discussed.

Getting to the point of Senator Milne's second and third questions, who is actually auditing the companies in this country, or the wealthy individuals, who are parking money offshore that should be paid to the government. We could not get an answer from Senator Cormann as to whether the same big-four accounting firms, who are the auditors of these companies, are doing these tax audits for the Australian Taxation Office. That is something we do need to follow up because of the perception of conflict of interest.

The third question asked by Senator Milne was that if we are out there grandstanding about global leadership we were showing at the G20, why is it that our information sharing networks and processes are going to come online a year later than the rest of the G20 countries. Why are we going to be the last country to implement these laws. I note that Senator Cormann totally filibustered that question. He did not get anywhere near answering it. However, it was reported in the press today that Treasurer Joe Hockey said the reason we are going to be a year later than other countries—so it is taking it to 2018—is that it was going to cost the big banks $50 million in compliance costs. We are seeing tax foregone, and that is an opportunity cost for our country, yet once again we are putting the profits of the big end of town first, just like we did with the FoFA regulations. Here is a situation where we are crying poor and taking money off those in our country who can least afford it, but we are not showing effective, strong action by taking tax off those who should be paying it, leading to a fairer and more equitable Australia.

Question agreed to.