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

A letter has been received from Senator Moore.

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The importance of tax transparency.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

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

This is an important debate, and I note that my good friend Senator Edwards will be following me in this debate. I want to begin by talking a bit about the bipartisan nature of a lot of the work that has been done. I note, Senator Edwards, that your party has afforded you 10 minutes in this debate and I have only been afforded five minutes, which clearly makes you twice as popular as I am!

This is a debate that the nation needs to have and is having. I want to start by touching on the work that has been done, in a very bipartisan fashion, through the Senate Economics References Committee, which is chaired by me and the deputy chair of which is Senator Edwards. What we have seen is company after company, sector across sector using what I call some very sharp practices and practices around the edges of what is and is not appropriate in many cases to be able to minimise their tax arrangements and minimise the tax they pay in this country. We have seen it in the tech sector. We have seen it in the mining sector. We have seen it in the LNG sector. We have seen it in the pharmaceutical sector. And we have seen these same practices and types of practices, be it transfer pricing, be it debt loading or be it hybrid structures—simply arrangements that are built for the sole intention of minimising tax liability.

Where we disagree is on how far and how we should address it. I want to say—and, again, I am very conscious of time—that the bill that was introduced by Joe Hockey as one of his last acts as Treasurer of this country is a good bill. It is a bill worthy of being supported but it is not enough. There are more measures. There are more steps. There are ways of improving that legislation, and simply arguing that you can make a bill better does not mean you do not believe there is not something good in that bill to begin with. I want to acknowledge the work of the former Treasurer and I want to acknowledge the work of Senator Edwards in this space. But there are some disagreements here and that is a healthy part of this debate. Where we disagree is on how far we should go and what needs to be done especially around the issue of transparency.

What we saw overnight was an extraordinary list of 1,498 companies that Lenore Taylor from The Guardian put up on their website which demonstrates who the companies are who have been given a special exemption to allow them not to have to put in ASIC forms and for whom there is no publicly available information. These are the companies whose affairs we have been unaware of and, as a result, the types of companies who if better tax transparency measures were put into place the Australian public would have some information on.

This is a worthy debate for this chamber to have. It is important for us. As we have gone through this debate over the past year—and I think it has been a big and constructive debate this chamber has had—I have remained of the view that shining a light in these corners, greater transparency and more information will not only better inform the Australian public but will actually drive policy change in this area, That is a positive development. That is a development that I support.

In coming days, we are going to have this debate once again. I do not want to pre-empt legislation that is listed on the Notice Paper, but perhaps in coming days we will have a debate more specifically around the Hockey legislation and what we should and should not do with amendments.

I urge the crossbenchers who supported improving the bill last time to maintain the rage, if you will, and to maintain the support of improving this bill. Make sure that we are putting in as many and as strong transparency measures as possible and do what we can do to make what is a positive and good bill better, because that is the objective of this chamber and that is the role of this Senate. It is to take legislation that has been passed to us by the House and see how we can improve it, and one of the great ways of improving it is through transparency. One of the great ways of improving it is making sure that that Australian public has the information they so want and deserve.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I concur with Senator Dastyari's comments about the fact that this committee has been doing work on multijurisdictional tax minimisation avoidance—call it what you like—and transparency. I do reject the contention that we are at the forefront because in his acknowledgement he was quite right to mention former Treasurer Hockey and now Mr Morrison's great work in being at the forefront of the G20. So in fact this committee's work has been valuable in the fact that it has been giving the tax commissioner an opportunity to respond to the concerns of the community has.

The coalition is forcing multinational companies to pay their fair share of tax in the jurisdiction in which they earn their profits. This is not a revelation coming from the benches opposite. That is a simple and important principle encapsulated it in these reforms. This is what we are going to be at debating in the next days. We are implementing on this side the G20-OECD base erosion and profit shifting recommendations on a country by country reporting and harmful tax practices to address multinational tax avoidance and the common reporting standard for automatic exchange of financial account information to address the taxpayer offshore tax evasion. We are stopping the practice of profit shifting, which may have been lawful but was clearly not consistent with the spirit of the law or the public's expectations. Meanwhile, Labor on the other side is seeking to force private companies to publicly reveal their private commercial information with no public benefit—no public benefit!

The ATO has already all of this detail and revealing it publicly achieves nothing in the public interest. It does not provide increased powers to the ATO, it does not increase the amount of tax the ATO raises from those companies, it does not reduce tax minimisation, but it does violate individual privacy and does force companies to reveal their competitors to their suppliers and to reveal to their subcontractors their private financial information, and all for no gain whatsoever to the taxpayer.

Labor and Senator Xenophon plan to block the government's changes and the reforms, which will collect extra taxes which will go a long way to reducing any tax dodging, unless the government accepts the privacy violating amendments, which is certainly not what I think is good policy. They plan to block a government bill that will force multinational corporations to pay their fair share of tax in this country in accordance with the profits they make in this country. Labor and Senator Xenophon have already flagged that they plan to block a government bill that will stop multinational corporations from shifting their earnings overseas into lower tax jurisdictions, rather than paying their tax here. Labor and Senator Xenophon cannot conscionably hold up this legislation for a day longer than it needs to be. I will go some way to explain why they are doing this.

Three weeks ago, these important privacy measures passed the Senate when Labor senators failed to turn up for a vote and when Senator Xenophon did not make it to the chamber for his turn to speak because I understand he was conducting media activity instead and time got away from him. The division was called and the division passed. There was much fury and embarrassment among the aforementioned senators but the bill had passed and that was that— that was that! That was until a red herring came along in the form of a newspaper story about Family Office Institute, an organisation formed to represent the interests of private companies targeted by Labor. The FOI made a submission to the inquiry into the matter by the Senate Economics Committee. The journalist called my office to test a series of accusations about that organisation, about its corporate history, about representations to the inquiry and about its legitimacy. Not one of those accusations withstood basic scrutiny and so not one of those accusations made it into the story—go figure! It is simply attacked the organisation through using the word 'institute' in its name without having members behind it. The story asserted that an institute, because it is an institute, needs to have a substantial membership base, although that is not a definition in which the Oxford Dictionary concurs. There were nine assertions made by the FO I in the inquiry and published in its report. Eight of them were directly supported by submissions by the Law Council of Australia, the Tax Institute of Australia, PWC or by EY. The ninth cited publicly available data. In other words, Labor and Senator Xenophon used the testimony of the Family Office Institute to discredit a report they signed off on and a bill they passed in this chamber three weeks ago, without taking issue with any statement, assertion or word that organisation wrote.

It is a ruse and it is more of the political grandstanding we have come to expect from the other side of the chamber and from parts of the crossbench. Senator Dastyari—I wish he were still here to enjoy this—and I have co-chaired the Economics Committee's corporate tax inquiry and while the purpose of that inquiry has been to uncover certain dealings that might be hidden from public view in order to improve tax law, it turns out that tax minimisation arrangements are not the only deals being done behind closed doors.

Labor has long been running a union protection racket throughout the course of the inquiry. The Labor-crossbench-controlled inquiry actually started when tax exempt trade unions joined forces with the tax exempt 'Tax Justice Network' activist-group to produce a report on corporate tax which, shall we say, was less analysis and more activism.

The ATO pointed out that it was 'patently false' and 'misleading' and that it made fundamental errors, such as analysing company accounting profit rather than taxable income, a fairly fundamental mistake, thereby massively inflating the impression of tax avoidance by entirely disallowing the notion of legitimate tax deductions. It alleged multinational companies had not paid tax where they had in fact already paid tax in other countries and where paying it again in Australia would have been to pay it twice. It singled out 21st Century Fox, for example, the bulk of whose business is done in the US. The report's authors failed to realise that trusts are not taxed until they distribute their income, at which point they certainly are taxed. This is an egregious error. They all are.

Grant Wardell-Jones, a senior tax partner at KPMG, said:

These statistical assertions are clearly misleading and are a misuse of information.

But the facts are not integral when you are running a tax-exempt trade union agenda. Just last week, Chevron bosses were facing questions before the same inquiry about their tax compliance. Those questions arose from a newspaper report which mirrored statements made in a report by the tax-exempt International Transport Workers' Federation, a body funded by the tax-exempt Maritime Union of Australia. The Australian's Leo Shanahan reported that:

In recent years, the MUA has been attempting to gain control of the supply chain to the Gorgon project, being built on Barrow Island off WA's northwest coast, while pushing for higher wages and the removal of foreign workers. It has staged protests and stormed the offices of Chevron in Perth along with militant union partner the CFMEU.

Surprise, surprise! He goes on to report Chevron CEO, Mr Roy Krzywosinski, as saying the reports painted 'a completely inaccurate picture' of Chevron's tax arrangements, and pointing out that the Gorgon project has yet to create one cent in revenue. Chevron might, I add, be responsible for the biggest single commercial investment in Australian history, and their Gorgon project has yet to make a cent.

The Leader of the Opposition, Mr Shorten, the shadow Treasurer, Mr Bowen, and former Treasurer Mr Swan all understand the importance of taxpayer confidentiality—each is on the record defending it. But I guess that Labor's actual leadership team—the ACTU, the AEU, the NTEU and the Victorian Trades Hall Council—has spoken.

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

I am not quite sure how this got turned into an anti-union rant by the government, but then again I should not be surprised, because that is going to be one of the key threads in any debate in this chamber. Let's get back to the idea of tax avoidance.

Senator Edwards interjecting—

Can you protect me, please, Madam Acting Deputy President?

Senator Edwards interjecting—

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Edwards! Order!

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

The only thing about Senator Edwards I am impressed with is his moustache. It is for a good cause, I must say. But let's get back to the very important issue of multinational tax avoidance—in fact, to tax avoidance in general in this country.

What Senator Edwards has failed to understand—and I genuinely believe this is an enormous oversight on behalf of the Liberals in this country—is that this is a significant matter of public interest. It has enormous public benefit. The objectives of having transparency in tax are twofold. The most important, and I will go directly to the Bradbury act, which is what introduced these laws in the first place. The first objective of these amendments is to discourage large corporate tax entities from engaging in aggressive tax avoidance practices. The second objective of these amendments is to provide more information to inform public debate about tax policy, particularly in relation to the corporate tax system.

I would like to read a quote from the previous Treasurer, Joe Hockey, who put out a media release on budget night—12 May 2015. In talking about a voluntary code of tax disclosure—not a mandatory code, like the Greens would like to see, but a voluntary code—he said:

The voluntary code will highlight companies that are paying their fair share of tax. It will also discourage companies from engaging in aggressive tax avoidance.

It is very similar to Labor and Bradbury, so far.

The Board of Taxation will provide a business and broader community perspective for the development of a voluntary corporate disclosure code.

But this is the good bit, Senator Edwards:

The government would like more companies, particularly large multinationals operating in Australia, to publicly disclose their tax affairs. In developing the code they will need to consider what information is disclosed and how it is disclosed.

The Liberal Party and the previous Treasurer believed in tax disclosure. The difference was that they wanted a voluntary scheme. Will you tell me which of the 1,400 companies that Senator Dastyari was talking about are actually out there wanting to voluntarily disclose their tax arrangements to the Australian public? How many of them are voluntary tax disclosers? None. That is why we need a mandatory code in this country for tax disclosure. This is a significant matter of public interest.

Most Australians pay their tax, and they expect large corporations to pay their tax. They do not expect to have a government that is essentially prepared to slug them in the hip pocket—where it hurts the most—with cuts to pensions, cuts to a whole range of different things that we have talked about in this chamber in the last two years. Now they are proposing to increase the GST, which will slug the most disadvantaged Australians in the hip pocket, but they will not take on the issue of multinational tax avoidance.

This is a serious test for the Prime Minister. He wants to put up some legislation in the Senate very shortly that will show he is taking action on tax avoidance. But at the end of the day that legislation, while it has some merits, does not go anywhere near far enough. We have a good amendment that was put up in this chamber by Labor, the Greens and the crossbenchers that asked for a simple system of tax avoidance; a simple system that will not cost anything to administer. That is your only criticism I had heard from the government until Senator Edwards got up here and said the government clearly does not believe in multinational tax disclosure. They want to slug you in the hip pocket, but they do not want to take on the big end of town.

They can throw as much spin into this as they like about kidnap bills, but they are happy to put up their rich mates' amendment bill in this place. It is for their mates, the big end of town, who probably donate to the Liberal Party—a small number of Australians who do not want to disclose their tax. And you have to ask why. Why don't they want to have their tax disclosed? It has nothing to do with kidnapping. It has to do with the fact that they do not want to be part of a public register that can provide incentives and disincentives to avoid tax avoidance.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Australians can smell a rat a mile away and they have well and truly smelt a rat in relation to multinational tax avoidance. Wage earners in Australians cannot avoid their tax; most do not want to as most Australians recognise that tax revenue contributes to hospitals, schools, roads, public transport and so on—the general wellbeing of our community. Why is it that our Prime Minister, Malcolm Turnbull, and his government want to shield multinationals, want to shield private companies when it comes to transparency on tax? This is something the Australian public has called for. Why is it that they want to continue to protect the big end of town?

I do not believe there is any justification for private companies with over $100,000 million in revenue in any given year being shielded by the Turnbull government. Why should these companies not be held to account through proper scrutiny and transparency? How dodgy is this secret list? Surely, one of the companies on the now public list presents a conflict of interest for the whole of the Turnbull government. Turnbull and Partners is one of the companies on the secret list, and the sole directors are listed as Lucy and Malcolm Turnbull. Then, once the list becomes public, and only then, suddenly the PM says he has requested to come off the list. Good on people like Mr Turnbull making money, but it well and truly smacks of self-interest and a very, very big conflict of interest that Mr Turnbull and his government are hell-bent on protecting the Prime Minister and his partner Lucy Turnbull and others on the list.

Mitch Fifield (Victoria, Liberal Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

Acting Deputy President Reynolds, on a point of order, I think Senator Lines was coming precariously close to reflecting on a member from the other place talking about conflicts of interest. It might have got close to crossing the line.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Minister, I concur. Would you like to rephrase your last comment, Senator Lines.

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

Acting Deputy President, on that point of order. We have seen that that is part of the standard debate. It actually came close to a conflict of interest; it was not actually making direct reflection. I make the point that the senator needs to be careful in her statements, but I do not think that she has actually crossed the line at this stage.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Thank you.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Today we see that, perhaps, there is another reason why the Turnbull government is so intent on protecting those on that list: many of them are big donors to the Liberal Party. We have Dick Honan, whose Manildra company has contributed to the Liberal and the National parties. We have Michael Crouch's Zip companies, who have contributed to the Liberal Party. We have Mr Crouch himself who has contributed to the Liberal Party. We have the late Paul Ramsay's healthcare company, who has contributed the Liberal Party. We have the late Doug Moran, who has contributed to the Liberal Party. We have the late Richard Pratt who has contributed to the Liberal Party. They are all on the former secret list. That is one of the reasons why these lists need to be transparent so Australian taxpayers and Australian voters can make up their own minds.

Of course there is another company on the list, and I am calling it a secret, dodgy list: 7-Eleven, a truly discredited company. They currently hold the record for making the top of another list, the top of the list for the highest ever record of underpayments to its own staff. To date, the Fels panel has uncovered $2.3 million of underpayments for just 101 workers. They are on the secret list that the government wants to continue to protect. Mr Fels told the Senate inquiry last week that they have written to 15,000 workers. So this is just the tip of the iceberg.

The company 7-Eleven tells us it wants to be accountable, yet fiercely clings and seeks government protection to stay on the secret list. Last week at the Senate inquiry, we discovered a similar fraud to James Hardie. The company 7-Eleven has now set up an independent company called Independent Claims Pty Ltd to which it is going to funnel payments to workers who have been underpaid. That is a company that the government wants to protect and does not think it is okay somehow that the public and Labor demand transparency for companies like that. That is not good enough. Thankfully, that secret list, with all the people on it, is now out there for the public to see, along with the list of donors to the Liberal Party for the Australian voters to make up their own minds about.

Right now, we have a government hell-bent on raising the GST—again, going after the Australian community and Australian workers—to a whopping 15 per cent, but steadfastly refusing to deal with tax transparency. Boy, have they got it wrong and the Australian public know it right now.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Senator Lines, I thought you might have learnt a lesson from your leader's attempt to smear the Prime Minister. Perhaps you should have a look at the opinion polls in recent weeks to see what the Australian public think of these very base attempts to smear people simply because they have been successful. Senator Lines, you talk about dodgy companies. I wonder if you include in that the dodgy operations run by the union movement?

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

Acting Deputy President, on a point of order. The comments should not be made directly to Senator Lines; they should be made through you.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Moore, you are correct. Senator Macdonald, if you could refer comments through the chair.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I do stand corrected, but I can understand why the Labor Party would take such a trivial point of order. That seems to be the standard of the Labor Party these days. If you say something they do not like, they try to stop you saying it. Perhaps they should have a look at something about freedom of speech in this country and get on with the matter. I can well understand this, because the Labor Party is controlled by the union movement and, whenever you start attacking the unions, their underlings in this place simply try to stop you raising the point. We have all seen example after example of how the unions have ripped off their own members in a disgraceful display, and there is no accountability at all. Where is the legislation to make unions accountable for the money which they steal from their members? We all know about the Health Services Union and the CFMEU. We know all about the union of workers in Sydney that funds the New South Wales Labor Party and the rorts and corruption there. Yet Senator Lines has the hide to abuse parliamentary privilege by naming people in this chamber.

This government has done more for accountability across the board than any government in recent history, and I am pleased that the royal commission into trade unions is providing, at last, some accountability for the hundreds of millions of dollars that go through the hands of dodgy union bosses—and, I might say, some union bosses who are not dodgy. One wonders about the Labor Party's enthusiasm for accountability when it comes to people's private tax issues and not about accountability and transparency where union funds are committed.

I do not have a lot of time, and in answering Senator Lines I have strayed a bit from the subject. But can I just point out that the government maintains the Australian Taxation Office's corporate tax transparency publication except for those companies where the publishing of the information would have put at risk the privacy of owners and the competitiveness of businesses. I might also point out that submissions made to the Labor government before the Labor government introduced some legislation in this area some years ago highlighted the risk that disclosing the tax affairs of closely held companies will effectively disclose the tax affairs of companies' owners, and the risk of making public commercial-in-confidence information for private companies. Those submissions were made to the Labor government, and the Labor government at the time took that into account in the legislation they brought forward. The concerns were also raised when the coalition government consulted on the exposure draft of legislation to exclude Australian-owned private companies from the Australian Taxation Office tax transparency publication. The exclusion of these companies, however, has absolutely no impact on the comprehensive powers of the Commissioner of Taxation to require companies to produce any information that is relevant to making an assessment of their tax liability. So the tax office already has that power. It is a very strong power, and it is a power which, I am aware, the tax office regularly uses. The exclusion of those companies also has no impact whatsoever on the amount of tax paid by those companies under the law, and the public disclosure will continue to apply to multinational enterprises operating in Australia and to Australian public companies.

In the limited time left to me, can I again pay tribute to the coalition government and particularly the former Treasurer Mr Hockey for his work in having implemented G20 and OECD base erosion and profit shifting recommendations on country-by-country reporting and harmful tax practices to address that multinational tax avoidance, and the Common Reporting Standard for Automatic Exchange of Financial Account Information to address offshore tax evasion. These are real initiatives of the coalition government. The Labor Party were in power for six years. I was going to say they talked a lot about this and did very little, but I do not think they even talked too much about it. It was left to the coalition government to work with countries around the world to try to fix this problem of tax and profit transparency. It is an issue that has been around for a long time, and I am delighted that the government of which I am a member is at last doing something that should have been done decades ago, and that will ensure that companies that operate in Australia pay the right amount of tax in Australia, something Mr Hockey and the whole government were very keen on and something the Labor Party had six years to do something about and did absolutely nothing about. But that work is on the way, and I would urge the Labor Party to get involved in constructive issues like that rather than having these base debates and trying to malign and smear fellow Australians.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to this | Hansard source

Today's debate is on the importance of tax transparency. Let me be clear: tax transparency is not important. Government should be transparent about what it does with our tax dollars. Government should not be transparent about the affairs of people who pay that tax. Taxpayers are required to provide private information to the tax commissioner so that he can check whether the taxpayer has paid enough tax. Taxpayers face fines and imprisonment if they do not provide this private information. Such coercion is a necessary evil of government. Traditionally governments have softened this imposition by promising not to share the private information they extract. But we have rejected this tradition. As it stands, the law requires the Tax Commissioner to publish the tax affairs of foreign companies with high turnover. This is an abuse of trust and a violation of privacy, and it adds insult to the injury of taxation.

This parliament is full of politicians who want to change the law so that the tax affairs of more and more taxpayers are published. These politicians who want to publish the private information of taxpayers are either meddlesome, unbalanced or conniving. The meddlesome ones love to pry into other people's business. It is a great shame that these snooping busybodies, who just have to find out other people's business, have found their way into the federal parliament.

The unbalanced politicians are driven by a visceral hate of those with more money than they have, a hate that veils a seething jealousy. Again, it is a great shame that our parliament contains so many people who believe that the wealth of rich people must be ill gotten, rather than the result of hard work, ingenuity or luck.

And the conniving politicians are just pandering to antirich prejudices felt by others in the electorate. We will never get rid of conniving politicians, but we should quell, rather than stir up, the antirich prejudices on which they prey.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

At the very least, in this debate it is good to see that some senators on the Labor side are just as agile and nimble as this government. They are showing a level of agility and—I do not know if 'nimbility' is a word!—nimbleness. That is perhaps a word! We have been asking them to do that. We have been asking them just to be a little bit more open minded and to see the possibilities for this nation. Unfortunately, they have not really applied that agility and that nimbleness to the issues facing the country and the problems and concerns that people have in the real world; they have applied that agility and nimbleness to their arguments that they are bringing to this debate.

I was here only a couple of weeks ago when Senator Dastyari was going around getting the numbers on a particular amendment that the Labor Party had, to do with tax transparency. They were making the argument that it was okay to put this provision in the bill to make everybody with a net worth of more than $100 million be transparent—it was okay to do that—because it is already available. It is already available through ASIC. You can just pay $38, I think it is, and you can get the details. Since then it has become apparent that actually some companies can request not to have that information made public, obviously because they prefer to have their personal tax matters private. And now the Labor Party have a completely different argument: 'We need it because these people are excluded, and there is a list of businesses that are exempt from those ASIC provisions.'

It is, I think, very interesting and very important to recognise that this exemption to ASIC reporting—this is my understanding—was introduced in 1995. Who was in charge in 1995? It was the Labor Party. The Labor Party introduced this particular exemption, and now they are trying to argue against it. They did not even realise it was an exemption a couple of weeks ago, and now they are using it as part of their argument to justify something that they really did not understand. It is clear now that they did not understand, because they did not understand how the law works.

They are being very agile in this debate to change tack on this argument to justify why they need to now continue their position even though the information has changed. Unfortunately, they are not so agile sometimes when it comes to transparency from other organisations. They are very keen here for individual Australians to have to put on the public record their individual tax affairs, even if there is not even a suggestion that they are doing the wrong thing. They might be paying their tax. They might be lodging it on time, doing everything right. They would have to put their personal financial affairs out in the public domain. That is what the Labor Party want to do.

But, even though they believe in transparency in that regard, they completely oppose efforts to improve transparency when it comes to trade unions, or registered organisations. Registered organisations have a very privileged place in our legislative framework. They are protected and exempted from trade practices laws. They have the ability to collectively bargain among their members—much more power than farmers get in that regard—because they are registered organisations under an act. But they currently can hide a lot of information, including director fees and whether or not they have actually lodged their appropriate statements with Fair Work Australia, the relevant regulatory body.

So, a few years ago, we—actually, it was Mr Tony Abbott, in the other place—put forward a private member's bill to increase transparency of registered organisations, to make it a civil offence for a reporting unit not to lodge a compliant full or concise report with Fair Work Australia. That is right; it was not even an offence, civil or otherwise. It was not even an offence under the Fair Work Act for a trade union not to lodge their proper reports with the appropriate regulatory body. We know from certain scandals in trade unions over the past few years that many organisations had failed to lodge those reports.

Guess what the Labor Party's approach was to that bill? Nothing. They did not want any transparency of organisations that get privileged places in our legislative framework and that should be subject to transparency because the members, ordinary workers, ordinary Australians, pay fees every week to be members of those organisations. They deserve that transparency. They deserve that organisation to be fully compliant, but the Labor Party do not want to apply that in those instances.

They do want to apply it to people who happen to have some wealth in our society. I support the statements of Senator Leyonhjelm. I do not think we should be dividing the country in any way. I do not think we should be dividing the country on race, on creed, on background or on income. We should apply laws to everybody equally. If there are people who are doing the wrong thing who have less than $100 million or people who are doing the wrong thing who have more than $100 million, the law should apply to them equally. I believe that every Australian deserves to be equal before the law. If they have done the wrong thing, the law should absolutely come down on them like a ton of bricks.

But we should not seek to make one set of rules for some Australians and another set of rules for other Australians, because there has been no evidence presented here that somehow there is noncompliance or a culture of nontaxpaying in those people earning above a certain amount of income. There is no evidence. We have had a huge Senate inquiry into this issue. It has had hearings all around the country. While certainly that inquiry exposed issues particularly in regard to multinational tax avoidance, there was absolutely no evidence that individual taxpayers in this country are somehow avoiding large amounts of tax or that there are any deficiencies in the powers and privileges that the Australian Taxation Office has to follow up any issues on individual taxpayers.

Without any of that evidence, why would we impose this unequal burden? Why would we do this? One reason, I think, that this is being raised again is an attempt from the Labor Party to reheat another sequel on an agenda here: trying to bring in the Prime Minister. It failed a few weeks ago. They are now trying for the sequel. I would advise the Labor Party that usually the sequels are worse than the original movie. Usually they are not as good, and this one is certainly a poor man's sequel, relative to their attempt a few weeks ago.

Finally, I am a relatively new senator, and it does frustrate me no end when we in this place seek to place a higher bar or a higher burden or greater compliance on individuals in our country than we would on ourselves. If we in this chamber and in the other place think it is appropriate to make public the tax paid, the personal financial affairs and the tax returns of Australians with a certain amount of income or assets, why would we not impose that same obligation on ourselves? I have not seen anyone in this chamber propose that, and I think it is deeply hypocritical for people here to try to impose that standard on other Australians, who have not necessarily done anything wrong, when not a lot of people in this place would be too comfortable doing that. I am not proposing it, but I think that if others want to propose a law for certain Australians they should be willing to apply it to themselves as well.

Jenny McAllister (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the motion, and in doing so I want to place it in its proper context, which is that the government is most keen to have a debate about taxation and in particular have a debate about the GST and the role that a rise in the GST might play in plugging holes in revenue and in funding a cut to corporate taxes. That is the reality of the debate we are having now. That is the context in which we seek to initiate a discussion about tax transparency. Instead of talking about a GST, people on this side of the chamber believe that the government should first look to the solution that is right under its nose.

There is a problem in this country with corporate tax avoidance. The Senate inquiry into corporate tax avoidance has just been through this, at length, and found disturbing evidence of the practices that are taking place every day in major multinational corporations in this country. There are real problems with transfer pricing. Apple reported a taxable income of only $247 million in Australia from revenue of over $6 billion. Just last week we heard from Chevron, and they talked to us about why it is that they pay significant amounts, a transfer price, to a shipping company headquartered in Bermuda. They provided the laughable response that the reason they locate their shipping company in Bermuda is to take advantage of the world-leading health and safety standards in that jurisdiction. BHP earned profits of $5.7 billion from its Singapore marketing hub, and the tax paid on that amount in Singapore was $121,000. Uber is a company renowned for being disruptive and innovative, and they are certainly disruptive and innovative in the way they approach taxation. Uber requires its drivers to submit 25 per cent of every transaction to its head company in the Netherlands. That profit, made off the backs of ordinary people driving cars for their company, is not recognised in Australia at all. Uber has 100-odd staff in Australia to facilitate its thriving and growing business—and I should say that it is a very important and interesting business, which I think is going to add great value to our country. Nonetheless, the 100 people headquartered here who are driving this business are not considered to be part of the company and not considered to create value for the company. They are simply described as a 'marketing operation'.

The ATO thinks this is a problem. On Wednesday last week at our hearings, Commissioner Chris Jordan explained it this way. He said:

For example, one thing I find odd is when firms are marketing goods and services here in Australia we're told that it's a 'low value add' activity. But when Australian goods and services are marketed to foreign countries through marketing hubs it is suddenly a highly valuable activity. It just doesn't add up.

This is a real problem. It is a problem that is recognised by the OECD, and we on this side of the chamber do not assert that transparency is the only solution, but we do say that it is a key part of the solution. Some people want to say that it is not necessary that we should be simply focusing on compliance. Indeed, it is very important that we properly resource the ATO. But the truth is that tax transparency allows us to have a proper conversation as a nation about the kind of tax regime we have in place and whether or not it is fair.

The purpose of a transparency regime is not to drive compliance. I agree that that is the job of the ATO. The purpose of transparency is to ensure that we as a nation can assess whether or not the laws currently in place are operating properly to ensure that everybody pays their fair share. Everyone here understands that the ability to fund the services that Australians expect—good health services, good education services, an aged pension and the kinds of things that make Australia a great place to live—is utterly dependant on a robust, fair and effective tax regime. Tax transparency is part of the process of ensuring that we can secure these into the future.

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

In two minutes or less, I say this: tax transparency is important because without a high level of transparency in our tax system, particularly for large corporate entities, public confidence in our tax system can be undermined and eroded. Parallel to that, having tax transparency can stimulate public discourse and debate as to whether some of our biggest corporations are paying a fair and appropriate level of tax. So it is relevant and important as part of this public discourse to be aware, for instance, that global energy giant Chevron paid just $248 on revenues of $1.73 billion. We need to know what the story is there. That is why I moved those amendments in relation to general purpose accounts in the last session of this parliament. I think it is important that we have that additional layer of information for companies that have a part of a global entity with $1 billion or more in revenue. If you are small or medium company that has $25 million or more in revenue you need to provide details to ASIC, which are public and transparent. There is a grandfather clause of close to 1,500 companies that do not have to provide that. Treasury itself, in its own inquiry back in 2006-07 said, 'We should get rid of that exemption.' That is part of this debate.

Finally, I want to make reference to Senator Edwards, who said that it is all my fault and that I was not part of the debate several weeks ago. I did miss the debate. The speaking list collapsed. I was doing an interview. I have been up-front about it. I have apologised for it but there was no division. Senator Edwards needs to be corrected in relation to that. Unlike Senator Edwards, I am not perfect. I will try to do better next time. That is why I am trying to make amends so that we can have greater levels of tax transparency in this nation. I think it is absolutely imperative that we have a good public debate in a great democracy such as ours.

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

I thank all senators for their contributions. It is always great to see the Liberal Party dragged, kicking and screaming, into a debate about taxation. In case anybody has misunderstood what this is about, it is about the Liberal Party protecting its mates. It is about the Liberal Party protecting its leader, who believes it is okay to run his assets through the Cayman Islands. That is fine, but he says, 'I want to make Australians pay a GST of 15 per cent on food'. This is a party—those opposite—who do not want Australians to understand exactly how much tax is paid or, most importantly, not paid by a select group of companies in this country. Company after company has been dragged to the economics references committee taxation inquiry, and over and over again they have come up with the most pitiful excuses as to why they do not actually pay any tax in Australia.

We have a government pretending that it is going to get some tax revenue from overseas companies or, what has become worse now, we have a trend where Australian companies set up their businesses in a deliberate way to artificially shift their profits to another country which has a lower tax regime. That is what is at stake here: the integrity of our tax base. Why don't the Liberal Party want Australians to know why and how much tax some people do or do not pay? Why is that the case? One blog this afternoon went through all the Liberal Party donors that are on a secret list and the hundreds and hundreds of thousands of dollars that the people on this list—who the Liberal Party are trying to protect today—actually donate to the Liberal Party. Is that the reason?

I looked on in amazement as certain big international companies fronted a tax inquiry in the United Kingdom. They were asked, 'Why don't you pay more tax?' Do you know what their simple answer to those British members of parliament was? It was, 'We pay all the tax that your laws require us to.' Those laws are so fraught with loopholes that you could drive trucks through, so set up with vested interests, that these companies say, 'I pay exactly the amount of tax that I am required to. These companies that set up all these tax avoidance mechanisms to make sure they pay as little tax as possible use the defence of, 'I pay all the tax I am required to.' Do you know who else said that recently? Do you know which other prominent Australian said recently, 'I pay every tax dollar that I have to, even though my assets go through the Cayman Islands'? Do you know who that was? It was none other than the Prime Minister of Australia, Mr Turnbull. He chose his words very carefully when he said, 'I pay all the tax that I am required to by law'. That is exactly what all those tax-avoiding companies that turned up in the UK said. That is exactly what they said: 'It's your fault, parliament. You haven't made us pay any more tax.' And now we have Mr Turnbull running the same defence: 'I pay all the tax I am required to by the laws of the country I'm the Prime Minister of.' Prime Minister, you can change that.

Today we have seen that the Prime Minister, when exposed as being one of the people who runs a company that is not required to disclose how much tax it has paid, has now written to ASIC and said, 'Please take me off the list.' If that is not an admission that he knows that this is the wrong thing to do, then why has he written that letter today? If that is not a smoking gun, nothing is. This is a government that wants to protect its mates, wants to protect its Prime Minister and argues that it is okay to run your assets through the Cayman Islands—because it is just a beautiful place. You have got to read some of the reasons that these people have set up in Bermuda and the Cayman Islands. Apparently it is really safe. The Bermuda Triangle is news to them. It is a very safe maritime regime. The Bermuda Triangle does not exist. It is just part of the fiction of the sixties and seventies.

These are companies that have set themselves up with structures that are designed to minimise the amount of tax that they provide to the Commonwealth so that the Commonwealth can provide services to Australians. That is what this debate is about. It is about the Liberal Party wanting to protect its mates, wanting to protect its donors and wanting to protect companies that are ripping off the tax base of this country. These are companies that actually engage in economic activity in Australia, that make sales and purchases here in Australia but manage to transfer their revenue and their profit streams to other countries like, say, Singapore—which has officially half the rate of tax. It is sort of like what they call the 'rack rate' at a hotel. That is if you are dumb enough to pay only the 15 per cent; you can get a much cheaper rate out of the Singapore regime just by asking nicely. Fifteen per cent is just the headline rate to get companies to register and set themselves up there.

I had to stop myself laughing when the chief executive of one of the big Australian international companies said, 'Yes, we do all this work here in Australia. We've got a billion dollars worth of revenue but, do you know what, our base is actually in Singapore.' Senator Xenophon asked him if he had ever been to Singapore. Here we had the chief executive of a company that sends all its revenue to Singapore because that is where they set up their business. How many times do you think he had visited Singapore in his period as CEO? Ten? Five? Two? One? No, you guessed it: he had never been to Singapore—to his own head office! That shows you what a sham transaction looks like: when the CEO of an Australian company says, 'We've set up our head office in Singapore'—nothing to do with tax—but he has never bothered to visit the country where his head office is set up for the region. What an extraordinary contempt for the Australian public. What an extraordinary contempt for that committee. But, most importantly, what an extraordinary contempt for Australian tax laws when you can divert all of your resources and your revenues to another country so that you do not have to pay tax.

So the challenge I put out to those opposite today is: do not stand here and pretend that you are doing anything other than protecting your Liberal donor mates. Do not stand here and pretend that you are going to fix the tax-base of this country, when you are not going to. You want to claim that there is a problem with the budget in this country that needs a GST fix—that ordinary Australians have to have a 15 per cent tax on food put on, while you want to protect your Liberal donor mates and your Prime Minister.

Do not pretend that it is about anything else. This debate is about why the Prime Minister of Australia says it is okay to put his assets running through the Cayman Islands and why companies run their assets, their profits and their revenues through the Dutch Antilles, the Bermuda based companies and the Cayman Islands based companies. This is a tax debate that is a fair dinkum tax debate. This is a piece of legislation that is going to come before us but those opposite are going to die in a ditch over. The signature moment for Mr Turnbull, the Prime Minister of Australia, is to protect Liberal Party donors, to protect companies that are ripping off ordinary Australian taxpayers and to try to pretend that he is much nicer than Mr Abbott. Well, Mr Abbott did not have assets run through the Cayman Islands. Mr Turnbull does.

It is time that Australians knew exactly how much these companies pay. It is exactly why this amendment and this debate is so important. Australians deserve to know how much those opposite are protecting their mates from paying tax in this country, and then they can make an informed decision about why they need a GST. Should tax companies, should Liberal Party donors, should the Prime Minister pay a bit more tax, or should I have to pay 15 per cent GST on food? That is what this debate is about. So come clean, those opposite. Come clean and do not insist on your bill without the amendments. (Time expired)