Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

The Common Reporting Standard is a multilateral policy initiative led by the G20 and OECD. The Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill embeds the provisions of the common reporting standard into Australian tax law. It will help with the exchange of financial account information between tax authorities such as the ATO in countries which are party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The Common Reporting Standard allows global tax authorities to automatically exchange information about the contents of company and individual bank accounts held overseas. Until now, multinational companies and wealthy individuals have often been able to avoid paying tax in one country simply by sending their money offshore to another jurisdiction so that tax authorities cannot see it. Under this standard, sometimes referred to as the CRS, certain financial institutions in Australia will report information to the ATO about financial accounts held by foreign tax residents. To be clear, we are talking about Australian banks reporting information about the financial accounts of wealthy foreign nationals resident in Australia for tax purposes. Once this information is reported to the ATO, it is shared with foreign tax authorities.

Importantly, as other countries such as Singapore sign up to the Common Reporting Standard, their banks will be required to report the financial account information of wealthy Australians to their respective tax collectors, such as the Inland Revenue Authority of Singapore. Such information exchanges are an important mechanism for combating tax avoidance and have the potential to be a very effective new weapon in the arsenal to combat global tax avoidance. Under the Common Reporting Standard there will be far fewer places to hide. More than 90 countries will now exchange information about what is held in bank accounts in their jurisdictions, allowing authorities to more accurately assess tax bills and better identify profit sharing and aggressive tax planning.

Before I address the bill, please allow me to respectfully remind senators that some countries who are a part of this joint G20 and OECD process have a financial year matching the calendar year, from 1 January to 31 December. The financial year in Australia, of course, starts midway through the calendar year, running from 1 August to 31 July. Unusually and notably, but not controversially, the first reporting period for this bill is for the six months from the middle to the end of the 2017 calendar year. However, we are concerned that with this bill the government is proposing a multistage implementation process, setting different reporting deadlines—one for individuals and a different one for corporate entities. Financial institutions would be required to report on high-value accounts held by individuals to the ATO by the middle of 2018 and report on high-value accounts held by corporate entities by 2019. However, no rationale has been given for delaying the reporting on corporate entity accounts by 12 months. We therefore propose amendments to the bill to align these two deadlines. This is consistent with Labor's ongoing efforts to strengthen Australia's tax system against tax avoidance. This is also consistent with Labor's ongoing efforts, acting in the best interests of the broader Australian community and in stark contrast to the coalition's willingness to tailor its tax policies to the preferences of big firms.

Labor wants the Common Reporting Standard to be implemented as soon as possible. It is disappointing that the Abbott-Turnbull government has committed us to a timetable which sees Australia lag behind most of the OECD and other advanced economies. More than 40 countries will be exchanging information on individuals in 2017. This group of so-called early adopter nations includes major economies such as the UK, Argentina, France, Germany, India, Italy and Mexico, as well as many European Union member states.

Over the past two years, Labor has repeatedly called for the Liberal government to sign Australia up to a timetable that matches these countries. Instead, the government has dragged its feet in bringing forward this legislation and Australia will not be exchanging information with other countries until late in 2018. That lines us up with countries like the Bahamas, Russia and the United Arab Emirates rather than with the leading G20 nations—hardly the actions of a government that is committed to fighting tax avoidance. There should be one reporting deadline, 2018, to ensure this information is available sooner. Labor will be moving an amendment to the bill to bring the deadline for reporting on corporate entities into line with that of individuals. We know that many of the Senate crossbenchers share our deep concern about big companies avoiding paying their fair share of tax and we urge senators to support Labor's amendment and ensure that the Common Reporting Standard starts capturing the information about companies' bank accounts sooner rather than later.

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

I am absolutely gobsmacked. We just dealt with some legislation in the committee stage, where the Greens moved a perfectly sensible amendment which we showed you a long time ago and you said, 'It's bad process to be moving amendments at this stage of legislation.' The hypocrisy! Seriously! You have done it yourself. We worked with stakeholders to get improvements to the bill that we just debated and you stood in here—

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

Senator Whish-Wilson, would you please address your comments to the chair . As a temporary chair yourself, you know that you need to do that.

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

I was facing in your direction, but I apologise if I was facing a bit too far to the right. Let me highlight this for those who are tuning in. We have just dealt with the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015, which was passed a few minutes ago and to which Senator McKim and I moved some amendments. For my amendment of schedule 2, we worked with stakeholders in tax transparency to come up with a perfectly reasonable set of amendments, and Labor, while they thought the idea was good, agreed with the government that you should not move amendments at this late stage because it is bad process. And yet we just heard from Senator Gallagher that Labor are going to do exactly the same thing with this bill. Seriously, we are here together to work as adults to improve legislation and you just voted down our amendment—for what reason except that you said it was bad process to do exactly the thing that you are about to do? It is no wonder you are in trouble.

Let us talk a little bit about this and we can go further into it when we move to the committee stage. The Tax Laws Amendment (Implementation of the Common Reporting Standard) Bill 2015 amends schedule 1 to the Taxation Administration Act 1953 and requires certain financial institutions in Australia to report information to the Commissioner of Taxation about financial accounts held by foreign tax residents. In turn, the commissioner will provide this information to foreign residents' tax authorities and, in parallel, will receive information on Australian tax residents with financial accounts held overseas. In order to verify relevant accounts, financial institutions will need to carry out the due diligence procedures outlined in the Standard for Automatic Exchange of Financial Account Information in Tax Matters, commonly known as the Common Reporting Standard, or CRS. The CRS is a standardised automatic exchange model that has been developed by the Organisation for Economic Cooperation and Development, or OECD, and non-OECD G20 countries at the request of the G20. As it is a standardised model, the policy options are limited to Australia not implementing the CRS and the timing of the implementation.

We saw the Australian tax office commissioner, Mr Chris Jordan, come out swinging during the last estimates. He said that the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015, which the Greens passed constructively with the government and which was opposed by Labor in the last week of parliament last year, is helping the tax office deliver on multinational tax avoidance. They have had a number of multinationals come forward, cap in hand, to discuss with them the settling of their tax bills. Certainly, I do not think anyone has seen Mr Jordan quite so animated as he was in those estimates. He was happy that he had been given new sets of laws and new powers to deal with this most controversial issue.

This is what we discussed here again today, and it is good to see Labor being constructive on multinational tax avoidance. It is good to see them putting up some positive recommendations to raise revenue for the Australian people rather than being obstructionist, like they were late last year when the Greens tried to get some good laws in place on multinational tax avoidance. What did they do? Listen to Chris Jordan if you want to know how well that bill is travelling with the tax office and how it is enabling them to get on with the job. What did Labor do? They went and paid for a billboard in Sydney. Senator Dastyari paid for a billboard in Sydney saying the Greens had voted against multinational tax avoidance. What a load of BS! The Greens have achieved a constructive outcome by working with the government and stakeholders on multinational tax avoidance. It is good to see Labor following the Greens' example by actually proposing some constructive legislation to help our tax office get some dollars for the Australian people rather than looking to their own short-term political gain—which, may I say, totally backfired on the Labor Party. The Greens will be happy to work constructively with the Labor Party, the government and other stakeholders to continue to help the ATO deliver on multinational tax avoidance and get tax transparency in place. I will keep talking for the next 45 seconds until question time starts, but I will get back to the substantive part of my speech when we recommence consideration of the bill.

Let me say, as the rest of you join us in the chamber, that Labor stood up in the debate on the last piece of legislation 20 minutes ago and voted down a perfectly good Greens amendment on the basis that it is 'bad process'—bad process in this chamber, a house of review—to introduce an amendment at the last minute. And then Senator Gallagher got up and said she was going to do exactly the same thing herself when we get to the committee stage of this bill. It is absolute bloody hypocrisy.

Debate interrupted.