Mathias Cormann (WA, Liberal Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

I move:

That the committee does not insist on its amendments to which the House of Representatives has disagreed.

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

These are, of course, the amendments related to grandfathered large propriety companies that don't have to make annual reports to ASIC. The amendments that I'm asking the Senate to insist upon seeking to eliminate a perverse provision in the Corporations Act which exempts 1,119 large propriety companies from having to lodge financial tax returns to ASIC.

There are two reasons why this archaic provision needs to be eliminated from the statutes. The first is that it creates an elite status for particular companies that is inconsistent with Australian values. We must eliminate a privilege to very large companies and wealthy people that is not afforded to regular Australians. That's inappropriate. The second thing that these amendments seek to do in eliminating this provision relate to the provision itself providing for or encouraging aggressive tax minimisation through a lack of transparency. It's a loophole that has been in existence since 1995. It was supposed to be a temporary measure. When I talk about aggressive tax behaviour, that's was not something that I've dreamt up. That was something that ASIC put to an economics committee back in 2015-16. I'll read from earlier comments I made on this:

The Senate Economics References Committee conducted an inquiry into multinational tax avoidance across both the 44th and 45th Parliaments. One of the submissions it received, submission No. 32, was from ASIC, who raised the concern about these exempted companies. That led the Senate economics committee to ultimately recommend:

… that the government require all companies, trusts and other financial entities with income above a certain amount to lodge general purpose financial statements with the Australian Securities and Investments Commission.

My amendment seeks to implement that particular recommendation.

In practical terms, my amendment removes that special status for these exempt companies. Again, we have 1,119 companies that don't have to lodge these returns, and they're owned by people who are familiar names to the Liberal Party—people like Kerry Stokes, for example, and Anthony Pratt, Lindsay Fox and so forth. They are companies owned by wealthy people. I don't mind people having wealth. That's fine. Good on 'em if they can get ahead in this world. That's what we like to see. But they shouldn't have a privileged status whereby they are exempt from doing what every other company in Australia does when they hit the threshold—that is, lodge financial returns. So that's what I'm seeking to do.

I note that this amendment has done a bit of ping-pong, as described in one of the Senate briefings, between the House and the Senate on a number of occasions. It's my understanding that Senator Hanson this time around will not support the insistence, and for that reason I won't call a division but will record my insisting upon the amendment. I'd ask that that be recorded. But I'll also just let the coalition know this: Michael West, who does a lot of journalism around tax avoidance and around companies, is running a very extensive investigation into this, so you've got a little bit of time before all of the warts come out into the open as to who you are trying to protect, who you are trying to allow this privilege to continue for. So I would ask the government, on the voices, to indicate that perhaps they've changed their mind after listening to me.

I do have a couple of questions for the minister. The first of those relates to conversations back when the amendment was dealt with last time around. The government hasn't yet responded to the 2015 Senate report into multinational tax avoidance, Corporate tax avoidance report—part III: much heat, little light so far. So I would ask the minister: can the government please advise when it will be responding to that report from two parliaments ago?

Zed Seselja (ACT, Liberal Party, Assistant Minister for Finance, Charities and Electoral Matters) Share this | Link to this | Hansard source

We dealt with this in part last time, but I will say that the government have taken and implemented some of the strongest multinational tax avoidance measures in the world and we stand by our record in relation to multinational tax avoidance. But, when it comes to the specifics of when that will be responded to, I'll take that on notice.

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

And again for the chamber, I know that Senator Whish-Wilson asked this question last time and the minister was unable to respond, but I'll give him an opportunity again to do so. What is the policy basis for permitting 1,119 large proprietary companies not to lodge their financial reports to ASIC? What's the policy basis?

Zed Seselja (ACT, Liberal Party, Assistant Minister for Finance, Charities and Electoral Matters) Share this | Link to this | Hansard source

Senator Patrick, I've got nothing to add to the last time we debated this. We've put forward our record on multinational tax avoidance. I've put forward the government's position in relation to considering other matters, but we don't believe that this legislation should be held up as a result of this particular point that you are trying to make. We've made our views known and, in fact, we stand by our record on multinational tax avoidance. But as to what will be coming from government, in terms of those other questions, in terms of further responses, we've put that on record, and I've got nothing to add from the last time we debated this in the Senate.

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

To be clear, a lot of these companies are not multinationals. They're Australian companies, but they just have a privileged, elitist status, in that they're not required to do what everybody else does, and that is to lodge company financial returns to ASIC. Again, noting that you might have been confused about the multinational aspects of this, what is the policy basis for rejecting this amendment?

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Madam Chair, given it appears as if the minister is just going to sit there and not answer Senator Patrick's question, I draw to your attention that I believe that Senator Whish-Wilson would also like to make a contribution.

The CHAIR: I've been watching and no-one on the screen has indicated they are wanting the call. I think Senator McAllister wants the call.

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

I want to place on record Labor's position. We do believe the Senate should insist on its amendments and we do support the amendment that is the subject of discussion today. Of course these companies should observe the same level of transparency as all other companies. There is, as has been made abundantly clear by the minister responsible for this debate, absolutely no public policy reason for these companies to continue to enjoy an exemption which was established in 1995 and was only ever intended to be temporary.

I'm not at all surprised that this is the government's position. This is a government that is allergic to transparency. It's a government that won't respond properly to questions in this chamber. It's a government that won't respond properly to freedom of information requests. It's a government that drags its heels on providing documents when they are ordered to be produced in this chamber.

The government are allergic to transparency for themselves and all their friends, and there is absolutely no reason why ordinary Australians should continue to tolerate the circumstances where a small group of people are exempt from a set of rules that apply to everybody else. There is no public policy reason for it, and it is incredible to me that the government continue to insist on their position when it cannot be justified and they are unwilling to even attempt a justification in this place.

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

I apologise; I was clicking my raise-hand icon on the screen, but I now realise I had to do it physically as well.

I think Senator Seselja's description of the word 'debate' the last time this came before the Senate was a very liberal interpretation of what was discussed in the chamber. There was no debate about the removal of this exemption, this 25-year loophole that has protected some of the richest Australians and biggest private companies from providing any tax transparency data. There is no policy basis for this. I would like to get on record today that the Greens would have supported a vote had it gone to division. We would have supported Senator Patrick's amendment.

I'd also like to place on record that the Senate inquiry, and I'd like to use the words 'groundbreaking Senate inquiry', that was initiated in 2015 was indeed initiated by the Greens. My previous colleague Christine Milne initiated that inquiry. I participated in all those inquiries, and we have seen significant legislation before this Senate; that is true. I will acknowledge that, which Senator Seselja added in his contribution earlier. However, it is a considerable anomaly that we have actually acted on various aspects of multinational tax avoidance but not this. This stands out like a sore thumb. I think I used a different analogy last time that may have been reported in the media, but, at the end of the day, the government has not provided any explanation to this chamber—this august house of review—as to why this loophole exists to protect the richest Australians. The only conclusion we can draw from this is that many of these people are indeed donors to the Liberal Party and that there's a reason, that there's some kind of cosy arrangement in place as to why this exemption hasn't been removed.

So this is something that we have worked on for many years. Indeed, I moved very similar amendments to what we have before the Senate today on numerous occasions, including two to three years ago when we had other debates around tax transparency. I would urge the government and Senator Seselja to remove this exemption. I understand Senator Patrick won't be giving up after today's amendment. We will see future amendments tacked onto a number of Treasury bills. I would also urge the government to respond to that 2015 Senate inquiry and the very numerous recommendations that it made. We have made progress, but we've got a hell of a long way to go before we can be confident that we've done everything we possibly can, as a chamber and as a parliament, to crack down on multinational tax avoidance and improve tax transparency.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

I'm just making it clear that the Jacqui Lambie Network will not be moving off this either until you remove those exemptions for your mates or your political donors. We're going to go to and from one house to the other. You're not going to go anywhere and you may as well give up on this bill, because that's where we're at. Stop wasting people's time. It's absolutely shameful where you are right now—that you have let your political donors influence you once again over what is best for this country. That is enough. So, unless you want this to go to and fro—or you want a win on the board, Minister—I suggest that there will be no exemption for your mates or your political donors. It's as simple as that. Until we get to that point, it's not going anywhere. You may as well put it back on the bench so it continues to collect the dust it's been collecting in the meantime.

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

I want to put on the record that Senator Whish-Wilson was correct: I do intend to continue moving this amendment on Treasury bills as we move forward.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

I understand Senator Patrick, that you wish to record your disagreement?

Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

That's correct. I think Labor did during its—

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Labor did, and I'm assuming the Greens did.

Bill agreed to.

Bill reported without amendments; report adopted.