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

I am speaking in continuation on the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015. I did digress a little before the start of question time. We were discussing the fact that this is more work that has been done by the parliament, and by all political parties, to try to progress the issue of tax transparency and multinational tax avoidance, and to provide the ATO, the Australian Taxation Office, with better laws and information to tackle the problem. I was congratulating Labor for being constructive and working with the government and the Greens to deliver something on multinational tax avoidance.

I did not get a chance to talk to the amendments that Labor will be putting to the chamber in the committee stage, but I will leave that until then. I commend Labor for putting up amendments, although earlier they voted some Greens amendments down on the principle that we did not follow due process, which I find very interesting considering they were excellent amendments. We worked hard with tax transparency stakeholders to try to improve that legislation, and there was nothing particularly controversial about it.

I would also like to take this opportunity to especially thank the tax transparency network, who I know have worked with Labor to develop the amendments that we are going to hear about shortly. I also congratulate Dr Andrew Leigh's office on the work that they have done in helping to present these amendments. The Greens will be supporting the bill. Of course, we support the intention of the bill to provide new laws and powers to the Australian Taxation Office to help crack down on multinational tax avoidance. We will be working constructively and as adults, supporting the amendments, which improve this legislation and actually deliver an outcome for Australians on multinational tax avoidance. Good on you, Labor, for doing something constructive on this issue.

(Quorum formed)

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

Senator Ludwig.

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

On a point of order, Mr Acting Deputy President, may I correct, for Hansard, something that I said during my speech?

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

I think the appropriate time is at the end of the debate, but Senator Ludwig is ceding his time for a moment.

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

I wanted to thank the Tax Justice Network, not the tax transparency network.

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Tonight I rise to speak on the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015. The Common Reporting Standard is an important measure to combat international tax avoidance, and Labor have strongly supported this measure, just like we support cracking down on multinational tax avoidance. The Common Reporting Standard is a multilateral policy initiative of the G20 and the OECD. This initiative will allow financial account information to be exchanged between tax authorities in participating countries. With over 90 countries participating in this exchange of information, there will be far fewer places for tax avoiders to hide. It is important to note that the sharing of this type of information is crucial to make sure those individuals and companies pay their fair share of tax and to stop the money-shuffling operations. It follows on from other efforts in attacking money laundering. If you can achieve across-the-board agreement with countries to address this issue with appropriate laws then you will succeed in minimising these operations.

Labor want this well-coordinated system to come into effect as soon as possible. However, once again we see Mr Turnbull's government say one thing but do something else when it comes to tax avoidance. The government, in this bill, has proposed delaying the reporting on accounts held by corporate entities until 2019. This means that Australia will be lagging behind most OECD and other advanced economies. There are more than 40 countries which will begin this information exchange from next year. These countries include the UK, France, Germany, India, Argentina and Mexico as well as numerous European Union member states. Under the Turnbull government, Australia makes it glaringly obvious that it is not serious about tax avoidance by delaying this implementation for years. I do hope that in the second reading debate the government can outline cogent and relevant reasons for the delay and not just say that it is because they think industry needs time to adjust. If we wait this number of years, we will be in the same category as Russia, the United Arab Emirates and the Bahamas. This country has led the world in many areas, particularly in seeking to effect agreements across countries to stamp out money laundering, but instead we have now found ourselves at the bottom of the heap, dragging our feet. It does not speak highly of this government. What is more concerning is that this government will make individual reporting mandatory from 2018 while delaying corporate reporting for an extra year, until 2019, giving their mates in big business even more time. During this debate I encourage the coalition to provide a good rationale for the significant delay in making these changes.

The government have form when it comes to avoiding action on tax avoidance. They have cut 4,700 jobs from the Australian Taxation Office. They have done a dirty deal with the Greens to wind back tax transparency. Their multinational tax plan, if you can call it that, is so vague that Treasury could not even cost it. It is important to highlight the point about the multinational tax avoidance legislation, because it shows the government's complete insincerity when it comes to this important tax reform. After the Senate had already amended the government's bill so that companies at the lower threshold of $100 million in earnings had to pay their fair share of tax, the coalition made an agreement with the Greens at the last minute to keep the reporting threshold at $200 million. You have to put it in the frame of this government not being about transparency. It is not about ensuring that it can sign up to a multinational agreement to shed some light in this area to ensure that big business reports. Because of the last-minute deal they signed, instead of information being released about 900 companies, we will end up with information being released for only about 300 companies, and the rest will be kept out of sight, in the shadows. We would expect this type of manoeuvre from the coalition, but it just shows how deeply ingrained the Greens are in trying to move towards the coalition. Worse still, I can see—

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

It's the pot calling the kettle black on that one, mate!

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Of course, the Greens complain about it. But you did it. Do not hide from it. Own it and defend it if you will—but I do not think you can defend it. You certainly do not want to talk about it now. We could be here all day talking about the self-serving, hypocritical, narrow-minded and perpetually outraged little clique that is the Greens, but there is the business of actually holding this government to account.

A report by the ATO in December last year confirmed that one in four companies earning more than $100 million paid no tax in Australia in 2014—not one jot. Anyone would think that is unacceptable, and that is why Labor's $7.2 billion plan would further tighten the tax net by putting in place a measure such as the Common Reporting Standard and making sure it is up and running as soon as possible.

We would also address the practice of shifting money from different parts of the company's global corporate structure to its Australian arm, thereby sending their money overseas as repayment of these artificial loans and at the same time claiming tax deductions. Our plan would see companies only be able to claim tax deductions against the average amount of debt that they owe banks around the world. These plans are detailed, costed and responsible measures that Labor has outlined to make sure that companies which do business here pay their fair share of tax.

The bill, as it stands, does not require that information collected through the common reporting standard to be public. Labor believes in greater tax transparency, and we have proposed that the Commissioner of Taxation make this information public in an annual report by providing aggregated and, importantly, the identified information about the financial account holdings of foreign nationals. The government continues to oppose measures to bring the time line for the common reporting standard forward. It, along with the Greens, has clearly opposed greater transparency and it has only been forced to take any action on multinational tax avoidance by the work done by the Senate economics committee, particularly the Labor senators on that committee.

This government clearly has the wrong priorities when it comes to tax avoidance. But speaking of tax avoidance, there is another kind of avoidance occurring to the great detriment of our country and our economy. It is something that has emerged gradually—it is the policy avoidance that we have seen from the Turnbull government and the Treasurer. While Labor has announced tax policies to counter the fiscal vandalism that those opposite have wreaked on the budget, Mr Turnbull and Mr Morrison have actively avoided the debate on tax reform. I have never seen in this place a government that has avoided so many debates about tax. It trumpeted in the early stages that it would be a government that would have tax reform at its centre—it would have a white paper on tax reform; it would set out an economic plan on tax reform. To date there has not been a squeak from this government. I would be embarrassed if I were a backbencher for the coalition at this point in this debate. Not only have they avoided making any proposals to reform our tax system, they have actually gone out of their way to rule out everything and anything possible. In fact, they created their own scare campaign around the GST and then ruled it out. That is hilarious! I have never seen a government create its own scare campaign so that it could rule it out. It is unique, let me say.

Let me throw-out a policy for those opposite which I could announce—a national policy avoidance scheme. It seems germane to this government which has no big ideas. Its only idea is how to create a national policy avoidance scheme, which could be independently analysed by the Parliamentary Budget Office. Those opposite could figure out a way at least to have fines for not complying with the national policy avoidance scheme, because to date this government has failed to deliver an economic plan for this country. The shame of that is that it has been in government for 2½ years and its only explanation is: 'We'll get to that budget and we'll have our economic plan.' What are we going to do between now and the budget? What have we done between the last budget and now? This government does not have an economic plan and it does not seem to be prepared to have the wherewithal to put its shoulder to the wheel and develop one. It wants to wait for a budget. Budgets come and go, but I am concerned that the plan that this government might produce will never materialise.

In all seriousness, this is not good governance by a coalition which leaves ordinary Australians hanging and waiting for a plan which has not materialised. Announcing that it will have a plan is not a plan—that is not a plan that sells. That is not economic leadership. Mr Morrison, at the Press Club the other day, did not display economic leadership, and I would say the media thrashed him for not being able to articulate an economic plan to this country when he had the opportunity to do so. This was on display for all to see. At the end of the day, Mr Turnbull did not want to become Prime Minister because he had a grand vision he wanted to set out for this country on how we would move from here into a way forward. Really he just wanted to be Prime Minister. Why? Perhaps he thought he deserved to be Prime Minister. The day that Mr Turnbull challenged Mr Abbott, he said:

Ultimately, the Prime Minister has not been capable of providing the economic leadership our nation needs. He has not been capable of providing the economic confidence that business needs.

That is what Mr Turnbull said when he challenged Mr Abbott. He set him down as a failure.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

On a point of order, Mr Acting Deputy President. I am enjoying Senator Ludwig's contribution, but I do recall standing order 194 requires that senators not digress from the topic in question.

Zed Seselja (ACT, Liberal Party) Share this | Link to this | Hansard source

Senator Ludwig, we are discussing the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill, and I would ask you to be relevant to that bill.

Joe Ludwig (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

On the point of order, there is broad latitude given by the chair to allow us to cross areas such as those I am talking about. I am talking about tax and tax avoidance and I am talking about this government's lack of ability to hold a proper tax debate. But I am happy to listen to your ruling and come back to the point.

We have been talking about this government not having a plan for how they are going to implement the Common Reporting Standard. Today they want us to pass legislation and wait this huge time for the changes to be delivered. The reason they want to wait this huge time is that ultimately Mr Turnbull likes jetting around the world rather than putting his shoulder to the wheel to come up with a vision for Australia. The same can be said about Mr Morrison. The Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill is a good example of where they just want to kick the can down the road and hope that it is implemented in three or four years time. It is the same plan Mr Morrison has—he does not have a plan today, I think he said at the Press Club; he said he would show us a few graphs and kick the can down the road, and 'Trust me, we will come up with a plan in due course.'

The rubber hits the road between now and the budget. It is remiss of this government not to consider how they are going to explain to the public what their plan is or is not. They have a steering wheel but the engine is not even running. This government does not have a purpose, apart from it apparently being the most exciting time to be an Australian, which is just a slightly longer catchphrase than Mr Abbott's 'stop the boats'. This government continues to be devoid of ideas, including how it is going to implement its tax policy. I think it is even devoid of a plan to implement the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill. When you look around the world, it is evident that this government has completely failed to explain, in a succinct and sensible way, why it can take so long for the implementation of tax administration in this country.

The Common Reporting Standard for the automatic exchange of financial accounting information is ultimately a good thing. It will ensure the collection of financial account information, it will ensure the reporting of that information to the jurisdiction's tax authority, and it will ensure the exchange of that information with the respective tax authorities of the nonresidents. All in all, it is beneficial. What is concerning are the time frames for implementation, as I have outlined, but ultimately this legislation underpins this government's inability to act quickly, decisively and with purpose. This bill highlights the inadequacy of this government to deliver anything. It concerns me that, when you look at their phrases, they will have a tax plan but they will rule out everything and anything they can possibly think is contentious. Ultimately, at the end of the day, they will not have a plan and they will simply use catchphrases such as Australia is a great place to live and why shouldn't you vote for the coalition. This bill highlights exactly the reason you would not vote for the coalition, why you would not continue to support the coalition. They do not have a plan for how to implement the international legal framework underpinning the CRS and countries covered by it. With the completion of those few words, I will allow the government time to answer the earlier questions I raised.

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

I am conscious of the time and I am conscious of what has already been said. I want to make sure the government has the opportunity to have its say on this. The Common Reporting Standard is a multilateral policy initiative that has been led by the G20 and the OECD. This bill continues with what has been a lot of work that has already taken place and a lot of initiatives over the past period. It is important that we not look at the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill in isolation but understand that it is part of what has really been a series of bills and a series of initiatives in this chamber to address some of these taxation issues. I point out that while there has been quite a bit of political disagreement and a bit of rancour about certain aspects of legislation, the Senate itself, all parties in this place, have come at it from a series of genuine but different views that are largely supportive of one another.

It is important to understand that the initiatives here are largely being supported, but there are some differences. Those of us on this side of the chamber want to see the government go further. We would like to see the government go harder. We think there are other initiatives and other steps that can and should be taken that have not been taken. We feel there are good things that can and should be done that have not been done, and in fact there is more low-hanging fruit in terms of legislation. That being said, there are a lot of good intentions and goodwill in this bill, and when we get to the committee stage I will propose some amendments which will go a long way towards improving it. With that, being very conscious of the time, I do want to give the government the proper opportunity to wind up.

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I am delighted, almost brimming with surprise and delight, to be able to provide the summing-up speech for the Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 and to warmly thank all of those senators who, I have no doubt, have made extremely valuable, thoughtful and detailed contributions to this debate that I have been studying very closely.

This bill implements the Common Reporting Standard for the automatic exchange of financial account information. Globalisation and technological advances have made it easier for taxpayers to hold investments in financial institutions outside of their jurisdiction of residence, increasing the opportunities for international tax evasion. The standard tackles this type of tax evasion, improving the integrity of the tax system. Financial institutions will be required to collect financial account information of foreign residents and report it to the Australian Taxation Office for transmission to other jurisdictions' tax authorities. In exchange, the Australian Taxation Office will receive information on Australians with offshore accounts. It will use the information to ensure that they are complying with their domestic tax obligations. Over 95 jurisdictions have committed to implement the standard, including former tax secrecy jurisdictions such as Luxembourg, Switzerland, the British Virgin Islands, the Cayman Islands, the Isle of Man, Guernsey and Jersey. I commend this bill to the Senate and look forward to its passage.

Question agreed to.

Bill read a second time.