Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. In 2022, Pfizer derived $1.4 billion in sales in Australia and an operating profit of $90 million, a ratio of just seven per cent. This is despite Pfizer earning $100 billion in worldwide sales and an operating profit of $35 billion, a ratio of 35 per cent. Pfizer Australia's intercompany assets show a loan balance with Pfizer Ireland of over a billion dollars. Australia imposes a 10 per cent withholding tax on royalties paid to Ireland, which, added to Ireland's company tax rate of 12½ per cent, means that at a total of 22½ per cent there is a lower rate of tax on profits sent offshore than profits retained in Australia. Will the Albanese government lift withholding taxes to stop profit-shifting by foreign multinationals?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator Rennick for the question. I think we've been clear about the tax arrangements that we've put in place to address multinational tax and some of the changes that this parliament has proposed. As I've said a number of times, in terms of our tax reform agenda we've dealt with the revised income tax arrangements, which gave every taxpayer in the country a tax cut and in a fairer and better way. We have also got our super tax legislation that is before this parliament that we would like for those high-balance super accounts. And we have moved some legislation—in fact, this year, the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill passed the parliament, which limited interest deductions for multinationals and improved corporate disclosures on subsidiaries, delivering on key parts of the October budget's multinational tax integrity package. So that is what the government have announced; that's what we've done. We don't have plans as outlined by Senator Rennick.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Rennick, first supplementary?

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

The income tax act exempts foreigners from paying capital gains tax on non-real assets if they own less than 10 per cent of the company. This exempts many foreign investment funds and holders of water rights. Why does the tax act exempt foreigners from paying capital gains tax, and how is this fair to hardworking Australians who do pay capital gains tax?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you very much. I'll see if there's anything further I can provide to this answer, but we do have arrangements in place to tax multinational firms in this country and we are always looking at ways to ensure that they are meeting the needs of our revenue base. We are also working globally on how we address some of the challenges around multinational companies. This is an area of interest for us. We are passing and have passed legislation to protect and improve our revenue base in relation to multinational tax, making sure multinationals are paying their fair share of tax and doing what we need them to do to support the services that we provide through the revenue that we do collect, Senator Rennick. But, if there is anything further I can provide in answer to your question, I will come back to the chamber.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Rennick, second supplementary?

Gerard Rennick (Queensland, Liberal Party) Share this | Link to this | Hansard source

The Income Tax Act exempts foreign holders of bonds purchased through a public offer from paying withholding tax on interest earned from those bonds. Why does the tax act exempt foreigners from paying tax on interest income, and how is this fair to Australians—especially retirees, who have to pay tax on their savings income?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you very much, Senator Rennick, and I am—

Hon. Senators:

Honourable senators interjecting—

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Senator Rennick has become a lot chattier since he left the opposition benches, that's for sure. Senator Rennick, I don't have the answer to that question with me. But, in a general sense—

Sue Lines (President) Share this | Link to this | Hansard source

Order, Senator Wong. Order.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

The approach that the government takes, when we look at all of our tax base, essentially, and the different measures we have—and there are a range of different exemptions and treatments, depending, as you pointed out, on what part of that base you're from, whether you're an individual taxpayer or a business taxpayer, and some of the different exemptions that exist. We do constantly look at ways to make sure that it's fair for all and that there is a level playing field, but I will come back, Senator Rennick, if there's more I can— (Time expired)