A Fairer Tax System for Millions, Not Millionaires - Media Release

CHRIS BOWEN MP

SHADOW TREASURER

MEMBER FOR MCMAHON

 

ANDREW LEIGH MP

SHADOW ASSISTANT TREASURER

SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY

SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS

SHADOW MINISTER FOR TRADE IN SERVICES

MEMBER FOR FENNER

 

A FAIRER TAX SYSTEM FOR MILLIONS, NOT MILLIONAIRES

 

A Shorten Labor Government will make Australia’s tax system fairer by clamping down on the loopholes used by millionaires that force the rest of Australia pay more.

We will cap the tax deductible expenses paid to lawyers and accountants that wealthy individuals use to reduce taxable incomes to zero.

Labor will also take steps to keep more of the money owed to Australia in Australia by cracking down on the use of tax havens and tax avoidance.

Malcolm Turnbull has a simple choice: he can stand up and fight for Australian workers and businesses who paytheir fair share, or defend tax havens and million-dollar deductions.

 

Managing Tax Affairs

In 2014-15, 48 individuals earned more than $1 million but paid zero tax. Nineteen of these people claimed an average of $1.1 million in deductions for the use of the lawyers and tax advisors that helped them pay no tax.

This is a rort. Allowing high-income individuals to reduce their taxable income to zero and then charging the taxpayer for the privilege is the sort of unfairness Australians are sick of.

Should an individual choose to pay an accountant more than $3000 to manage their tax affairs, that extra expense will be borne solely by them, not subsidised by other taxpayers.

Less than one per cent of all taxpayers will be affected by this measure.

 

Tax Haven Transparency

Tax havens hold an estimated $7.5 trillion of the world’s financial wealth, costing the global economy $200 billion in lost taxes every year. As Tax Commissioner Chris Jordan recently noted: ‘Many of these matters involve deliberate tax evasion, often using overseas tax havens or complex corporate structures to avoid detection and recovery.’

Malcolm Turnbull’s Government shirks every opportunity to clamp down on tax havens.

Unlike Malcolm Turnbull, Labor is not content to let wealthy individuals and corporations use tax havens such as the Cayman Islands, Panama, and the British Virgin Islands to rip of their fellow Australians who do the right thing.

A Fairer Tax System

Labor’s nine-point Fairer Tax System plan will restore integrity to the Australian tax system and increase enforcement and civil society oversight.

1.            $3,000 cap on deductions for managing their tax affairs for individuals. This measure delivers $1.8 billion to the budget over the medium-term, and affects approximately 90,000 people (less than one per cent of all taxpayers).

2.            Public reporting of country-by-country reports. High-level tax information about where and how much tax was paid by large corporations (over $1 billion in global revenue) will be released publicly.

3.            Whistleblower protection and rewards. Provide protection for whistleblowers who report on entities evading tax to the Australian Taxation Office. Where whistleblowers’ information results in more tax being paid, allow them to collect a share of the tax penalty (a reward of up to $250,000).

4.            Mandatory shareholder reporting of tax haven exposure. Companies must disclose to shareholders as a ‘Material Tax Risk’ if the company is doing business in a tax haven.

5.            Public reporting of Australian Transaction Reports and Analysis Centre (AUSTRAC) data.Require the annual public release of international cash flow data.

6.            Government tenderers must disclose their country of tax domicile. All firms tendering for  Australian Government contracts worth more than $200,000 must state their country of domicile for tax purposes

7.            Develop guidelines for tax haven investment by superannuation funds. The Australian Tax Office (in collaboration with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority) will develop guidelines for responsible investment by superannuation funds.

8.            Publicly accessible registry of the beneficial ownership of Australian listed companies. This will allow everyone to find out who really owns our firms. Shareholders should not be able to use complex structures and sham ownership to avoid complying with corporate transparency rules.

9.            Australian Taxation Office disclosure of settlements and reporting of aggressive tax minimisation. Require that the Australian Taxation Office’s annual report provide information on the number and size of tax settlements.

A factsheet is available here.


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