Jane Hume (Victoria, Liberal Party, Shadow Minister for the Public Service) Share this | Link to this | Hansard source

I rise to speak on the Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024 and its two associated bills. The coalition supports the continuation of the OECD two-pillar process on multinational tax avoidance, a process the former government initiated and that Labor is continuing. Working with like-minded nations and international forums like the OECD is critical to ensuring that multinational corporations from all jurisdictions pay their fair share of tax and contribute to the countries in which they operate.

The coalition took extensive action over our nine years in government to address multinational tax avoidance. As the host of the 2014 G20 summit, Australia played a leading role in the original OECD G20 base erosion and profit shifting project, the BEPS project, which was initiated in 2013 and delivered in 2015. Under the coalition's leadership, Australia adopted the OECD G20 BEPS recommendations, which established a multilateral approach to preventing tax avoidance and increasing tax transparency for administrators. At the time, the coalition government implemented several key measures, including the introduction of the diverted profits tax, the DPT, which limits a company's ability to shift profits out of Australia. We also introduced the multinational anti-avoidance law, the MAAL, ensuring that companies cannot avoid a taxable presence in Australia. We also strengthened the thin capitalisation rules, improved the transfer pricing rules and doubled the penalties for tax avoidance.

We established the ATO Tax Avoidance Taskforce in 2016. The ATO taskforce was designed to enforce existing laws and to support new government measures aimed at preventing tax avoidance. Between 2016 and 2021, the ATO raised $24.2 billion in tax liabilities against large public groups, multinational corporations and privately owned and wealthy groups. This effort generated collections of $17.3 billion. It's critical that we continue to pursue fair and consistent tax rules not just within Australia but also with like-minded nations around the world. This is exactly what we were doing through initiatives like the OECD two-pillar solution, in collaboration with our international peers. We commend the Labor Party for following our lead and continuing this important work.

However, while we support these efforts it's important to recognise that the current government has not fully delivered on its promises.

At the last election, Labor made a clear commitment that its sole focus on taxation would be addressing multinational tax avoidance. Yet, despite this promise, they have failed to follow through on even that basic commitment. Labor's handling of country-by-country reporting and changes to thin capitalisation rules has been nothing short of shambolic. The policy impotence of the Assistant Treasurer has been so glaring that at least once he has needed his senior minister and the Treasurer to intervene and fix his harebrained schemes. Labor, led by the Prime Minister and the Treasurer, assured Australians that there would be no tax increase beyond working with other countries to make multinational tax regimes fairer. But, as we've seen, this promise was not worth the paper it was written on. Labor's pledge to focus solely on multinational tax avoidance has been well and truly broken.

Instead of keeping his word, Prime Minister Albanese has raised taxes in several key areas that will impact the lives of everyday Australians. Labor has increased taxes on superannuation, even though it vowed not to do specifically that, capturing one in 10 Australians over time. According to Treasury modelling, young Australians earning an average wage today will be subject to this tax. This is also a new tax on unrealised capital gains, which is unprecedented in our tax system. This is an assault on family owned businesses and self-managed super funds, undermining the financial security of hardworking Australians.

In addition, Labor has targeted franking credits again, banking half a billion dollars in taxes from Australian companies, retirees, super funds and charities. This is a direct attack on the financial wellbeing of those who have worked hard and planned for their future. Labor has also ended small business tax concessions, dramatically reducing the instant asset write-off that so many Australian small businesses rely on to invest in their operations and to grow and failing to provide certainty due to their continued legislative mismanagement. Higher taxes will not help address the cost-of-living crisis that so many Australians are facing. Higher taxes will not solve the problem of anaemic economic growth. Higher taxes will not reverse the collapse in productivity that we are witnessing under this Labor government.

Our economy is shuddering to a halt. Personal income taxes have risen by 20 per cent thanks to bracket creep. Prices are up 10 per cent, and, for working households, prices have increased by over 18 per cent. Real wages have collapsed by nearly nine per cent, and living standards have fallen by eight per cent. Household savings have dropped 10 percentage points. Australia is now trailing behind our peer nations. A family with a typical mortgage of $750,000 is approximately $35,000 a year worse off. This is not responsible economic management. Labor's high spending, high interest rates and higher taxes, coupled with an additional $315 billion of spending across three budgets, have left Australians worse off. Their broken promises on taxes, including superannuation, franking credits and small businesses, have only added to the pain.

The changes to multinational tax arrangements in this bill do not make up for Labor's attacks on aspirational Australians. These changes do not compensate for Labor's inaction on inflation. They do not address the impact of rising interest rates on Australian households, nor do they undo the harm caused by Labor's tax policies. Australians deserve a government that's focused on the challenges they face today. While the coalition will not oppose this legislation, we will not apologise for holding the government to account for their broken promises on tax and their failure to take meaningful action on productivity and indeed potentially making the problem even worse. We will not apologise for holding the government to account for their lack of focus on fighting inflation. We need a government that prioritises the economic wellbeing of all Australians and takes real steps to address the cost-of-living crisis, to improve productivity and to restore confidence in our economy.

In conclusion, while we support the continuation of efforts to tackle multinational tax avoidance, we cannot ignore the broader economic challenges facing our nation. Labor's broken promises and their misguided policies have left Australians worse off, and we must continue to hold them to account. Our focus must remain on creating a fair and prosperous Australia where everyone has the opportunity to succeed.

Tim Ayres (NSW, Australian Labor Party, Assistant Minister for Trade) Share this | Link to this | Hansard source

Unlike Senator Hume, who thinks at this stage of the game, at 10.35 pm, Australians want more politics and more partisan negativity, this is a government that knows what Australians want. And I think what the Australians in this building want is for me to say: I thank senators for their contributions to the debate, and I commend the bill to the Senate.

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

There is a second reading amendment in the name of Senator David Pocock. Senator Pocock is not here, and my understanding is that he may have expressed views to the whips that he does not wish to proceed with it. If no-one is going to move it, then we'll move on.

Question agreed to.

Bills read a second time.