David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and the minister representing the Treasurer, Senator Cormann. Can the minister outline to the Senate what the government is doing to strengthen the integrity of the Australian tax system and ensure that multinationals pay their fair share of tax?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Bushby for a policy question, because Senator Bushby and every senator on this side of the chamber is actually interested in the future of Australia. We are actually interested in building a stronger economic and fiscal foundation for Australia.

The government wants and expects all taxpayers to pay their fair share of tax. If companies make a profit here they should pay tax here and they should pay tax consistent with our laws. In this year's budget we announced significant steps to strengthen the integrity of our tax system and crack down on multinational tax avoidance. This included measures on anti-hybrid rules, harmful tax practices, exchange of rulings and treaty abuse rules. The government has also tightened our thin capitalisation rules to stop multinationals from claiming excessive debt deductions. These measures are our contribution to the G20-OECD Base Erosion and Profit Shifting Action Plan, following our successful leadership in this global effort as G20 president in 2014. May I just say that Treasurer Hockey did an outstanding job in providing global leadership on this very important issue.

Yesterday the Treasurer introduced to the House a new multinational anti-avoidance bill to stop companies from diverting their profits to tax havens to avoid paying tax in Australia. This law will target approximately 30 large multinationals suspected of diverting profits using artificial structures to avoid a taxable presence in Australia. If economic activity takes place here then the profits will be taxed here. Multinationals that break the rules will face tougher penalties. Not only will they have to pay the tax they owe, but they will also face additional penalties of up to 100 per cent of the tax they owe.

We are continuing to provide leadership at an international level through the G20 and through the OECD. In government, Labor was all talk and no action. This government is actually getting on with making a difference.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Will the minister inform the Senate how these measures to combat multinational tax avoidance will benefit Australians?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Tax avoidance by anyone undermines the fairness and integrity of our tax system. When someone elects not to pay their fair share of tax here in Australia, everyone else has to pay more because they have to pick up the bill.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It's a joke! Why don't you do something serious about it?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

That places an unfair burden on individual taxpayers and on our business community. The vast majority of Australians—workers and businesses—do the right thing and they rightly expect multinationals to do the same, which is why this government is taking action.

We have Senator Jack-in-the-Box up there at the back, jumping up and down again and yelling and screaming. You wait for the second supplementary, Senator Jack-in-the-Box, and we will talk about your activities.

Stephen Parry (President) Share this | Link to this | Hansard source

Order! Senator Cormann, you will address senators by their correct titles.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Dastyari, also known as 'Senator Jack-in-the-Box' and 'Mr Bean'. As the OECD rightly points out, tax laws around the world have not always kept pace with global corporations, the fluid movement of capital and the rise of the digital economy. This government is taking action— (Time expired)

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister advise the Senate whether there are any risks to the government's efforts to combat multinational tax avoidance?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The biggest risk to effective action against multinational tax avoidance is the Labor Party. You would have guessed it. Labor's alternative multinational tax avoidance package, announced in March this year, poses an unnecessary risk to our economy and to jobs. Treasury has assessed that, amongst other things, it is likely to increase the cost of capital in Australia and have a negative impact on economic activity, which means it will cost jobs.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

You won't even put figures out. You don't have to embarrass yourself like this.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

We have Senator Jack-in-the-Box—sorry, Senator Dastyari, also known as Senator Jack-in-the-Box—up the back there yelling and screaming—

Stephen Parry (President) Share this | Link to this | Hansard source

Pause the clock.

Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. You made a very clear ruling and you gave Senator Cormann a direction. I know that Senator Cormann thinks he is Arnold Schwarzenegger but he is actually Danny DeVito. You gave a clear direction but I just do not think he has been listening to you, Mr President.

Stephen Parry (President) Share this | Link to this | Hansard source

There is no point of order. I remind all senators to address senators by their correct titles.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Mr President, the chair of the Senate Economics References Committee, also known as Mr Bean, got the boss of David Bradbury—

Stephen Parry (President) Share this | Link to this | Hansard source

Order! Senator Cormann, it is okay to have a little bit of a joviality but we are just going a bit too far.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, on a point of order: That was my point exactly. It has just been taken too far.

Stephen Parry (President) Share this | Link to this | Hansard source

All senators will desist from using nicknames or other names in this place.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

'Wacker'! What about 'Wacker'?

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Conroy, that applies to you also.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Former Assistant Treasurer David Bradbury works in Paris now; his boss is Pascal Saint-Amans, Director of the OECD Centre for Tax Policy. He says Labor's policy is premature— (Time expired)