ABC MELBOURNE DRIVE
MONDAY, 6 NOVEMBER 2017
SUBJECTS: Paradise Papers, Labor’s multinational tax avoidance laws, Scott Morrison’s plans to give multinationals and millionaires a tax cut, Malcolm Turnbull’s citizenship crisis, John Alexander, Manus Island.
RAF EPSTEIN: To talk about the Paradise Papers and the latest political developments, we’re joined by the Shadow Assistant Treasurer. He is part of Bill Shorten the Opposition Leader’s team. Andrew Leigh, good afternoon.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Raf. Looks like Paradise Lost, doesn’t it?
EPSTEIN: [laughter] Very good. We’ll get on to Paradise Papers in a tick. The register for MPs and Senators to declare their background effectively, that would work, wouldn’t it? Barnaby Joyce would have had to declare everything. So too Stephen Parry. That would have made a difference.
LEIGH: Well, it’s not quite clear what would have happened if you just relied on MPs’ disclosure here. It could well be that Barnaby Joyce and Stephen Parry would still be illegally sitting in the Parliament under this regime. We’re happy to work with the Prime Minister, who’s clearly been dragged kicking and screaming to this approach, given that he was so firm last week that nothing needed to be done. But we do want to make sure that we have a rigorous process in place. Labor’s very confident in the vetting procedures we have for anyone who stands as a Labor candidate, but we’re concerned that we see reports of more and more Liberals MPs who potentially haven’t complied with the rules.
EPSTEIN: Are you sure that Barnaby Joyce and Stephen Parry would have been able to sit there? They’re pretty open and shut, cut and dry – they’ve got parents born in Britain. That’s an easy one. If they declare their parents are born in Britain, they’d have to put the documents in. The Prime Minister’s proposal would stop those two happening.
LEIGH: Well, we’ll meet with him and work through the details, of which we don’t have very many at the moment. But we are concerned that this process needs to have clear oversight and at the moment it’s relying on, what we can see from the Prime Minister’s recommendation, very much the word of MPs. Australians have to have confidence in the process. I think many Australians have just lost confidence in Malcolm Turnbull’s leadership over this issue.
EPSTEIN: You’re confidence every Labor MP and Senator is safe?
LEIGH: We are.
EPSTEIN: Full stop. Confident?
EPSTEIN: No problems?
LEIGH: Absolutely. We’ve got very strict vetting processes in place. Pretty easy on my part, given I’m Australian born and have two Australian born parents. But talking to friends in the caucus who have more complicated backgrounds, they went through a very rigorous process when they first nominated to stand, making sure that they renounced any other ties.
EPSTEIN: Ok. We won’t need to play that back unless you’re proven wrong, I guess.
EPSTEIN: Andrew Leigh is with us, part of Bill Shorten’s economic team. Let’s talk about tax avoidance, Andrew Leigh. The Prime Minister says they’re already doing a lot. What would you do differently?
LEIGH: Raf, I’m not quite sure what he’s referring do when he says ‘doing a lot’. I mean-
EPSTEIN: Do you really want me to read the Treasurer’s press release to you?
LEIGH: Let’s save us all that arduous ordeal, but it’s enough to say that when they were in opposition they voted against the laws which have now garnered billions of dollars of revenue. They’re patting themselves on the back for Labor laws which they voted against. They’re refusing to support Labor’s crackdown on debt shifting loopholes, which add more than $4 billion to the budget bottom line over the course of the decade. They won’t have big firms disclose to shareholders as a material tax risk their dealing in tax havens. They’re not supporting Labor’s plan for government tenderers to have to disclose their country of tax domicile. We need more transparency, we need to close the loopholes. Labor’s got a clear plan. The Coalition’s been running lots of ads at your expense, but not doing very much on multinationals apart from offering them a huge tax cut.
EPSTEIN: Let’s put the business tax cut aside. I know it’s a big part of your argument, but let’s talk about what you’re planning. The Treasurer Scott Morrison was on AM this morning. He’s particularly incensed. He says you want the public disclosure of international tax reports. I think what they are, they are reports exchanged by the ATO with its equivalents overseas. Let’s have a listen to the Treasurer this morning.
SCOTT MORRISON: The way country-by-country reporting works, and it’s now in place, is if you were to go down Labor’s path the information would turn off. It would just turn off. I think it shows extreme naivety on behalf of the Labor Party in not understanding how the base erosion profit shifting processes work.
EPSTEIN: So Andrew Leigh, is he correct? Do you want the tax authorities in other countries to have their reports released here?
LEIGH: I’m not sure Scott Morrison understands the way the system works at the moment. Right now, Australian law already requires country-by-country reports to be submitted to the Australian Tax Office. What we’re saying is that should be public. The European Union has already moved on this, the United Kingdom released-
EPSTEIN: Can I stop you there, only because I don’t want to get lost in the detail. The Treasurer and the Government have been citing all day evidence given by the Commissioner, the head of the ATO, saying that if you release those reports, people wouldn’t give them to Australian any more. So that’s the head of the ATO saying that, not the Government.
LEIGH: It seems to fly in the face, Raf, of the fact that there are already large firms doing this disclosure, that other countries are already moving towards that. The Liberals are always fighting against transparency for the big end of town. That’s what they did when we tried to disclose the amount of tax being paid by big firms. They came up with all sorts of spurious excuses for that-
EPSTEIN: Forgive me for interrupting again, but you are pitting yourself against the Australian Taxation Office, not the Government. There is a quote there from the Commissioner in recent Senate estimates, quote “we wouldn’t have any reports to release as no one would give us any”. So if you force them to disclose what foreign tax authorities are doing, the reports they hand to the ATO, they’d no longer get them. Is that right or wrong?
LEIGH: I think that’s simply spurious and flies in the face of the fact that other countries are already moving on this Raf.
EPSTEIN: What the Commissioner of Taxation says is spurious?
LEIGH: It’s yet another excuse that Scott Morrison is giving for not extending transparency to the big end of town. He’ll put the blowtorch onto welfare recipients over every last little detail and the robodebt scandal absolutely makes that clear. But when it comes to the big end of town, he’s out there running a protection racket for some of the world’s biggest firms. Why shouldn’t transparency extend to these firms? Why shouldn’t we have the Australian public knowing how much tax is paid by these firms? Scott Morrison is very tough when it comes to dealing with the vulnerable, but he’s pretty weak when it comes to taking on the strong.
EPSTEIN: Just another detail in your press release – and I’m all for transparency by the way, I always believe that, I think there’s not enough transparency about a lot of things. However, in your press release it says you want to create a register showing who really owns Australian companies and trusts. Create a register showing who really owns Australia’s companies and trusts. That’s impossible. How on Earth are you going to have a public registry showing who owns every company and trust that does business in this country?
LEIGH: A beneficial ownership register is pretty normal in many other countries around the world. Corporate watchdogs have frequently commented how ours is surprisingly opaque. There are outfits which are set up just in order to do the due diligence and try to track through the various ways in which our shareholdings are managed. We don’t need to have all of that. We can have a little more transparency in the system and again, Raf, I get worried when people say ‘it’s all too hard, we should just throw our hands up and let the big end of town go their merry way’.
EPSTEIN: Don’t get me wrong, Andrew Leigh. I’d love for there to be a registry that showed who really owned every Australian company and trust. I just can’t believe that that’s possible.
LEIGH: A beneficial ownership register is possible, Raf, and it would put us in step with the way in which other countries do it. What would be odd, in fact, would be for us to continue on our merry way allowing the opaque system that exists at the moment to continue. We just can’t rely on these sorts of Mossack Fonseca-Paradise Papers leaks. They’re too ad hoc. Waiting for the next exposé is not a good way to run a tax system. We need stronger laws, better transparency. Close the loopholes. It’s not that hard. If the government was willing to be half as tough with multinationals as they are with Australians with a disability, we’d actually be able to get this done.
EPSTEIN: Andrew Leigh, I can’t have a federal politician on the show and not ask about the situation on Manus Island. We had a detailed chat with our reporter there last Friday. Is any of this Labor’s fault, any of it?
LEIGH: I don’t believe that we need these people languishing on Manus Island. We’ve been absolutely clear, Raf, that Manus and Nauru just temporary facilities and people should have been resettled from those facilities into third countries years ago. It’s good that the government is dealing with the United States. It’s not clear why they’re unwilling to also deal with New Zealand and other countries. Because the situation there is pretty dire, I’ve spoken with constituents of mine who are regularly in touch with men on Manus and families on Nauru, helping them out with their day to day needs. I know the dire situation they’re in. I don’t think it’s good enough for the Government to be treating people like this.
EPSTEIN: Same question, that I’m not sure you’ve answered yet – in fact, I’m sure you haven’t answered. Is any of it Labor’s fault?
LEIGH: We set up the refugee resettlement agreement in order to make sure that people didn’t drown at sea. The refugee resettlement agreement never required for people to be held indefinitely. It was always predicated on the notion that you would have third country resettlement happening speedily. The government’s dropped the ball on that.
EPSTEIN: I think that’s a no. I’ll leave people to make their own judgement on it. If I can actually ask you on some breaking news, Andrew Leigh, where we started with citizenship. Fairfax are reporting that John Alexander, who holds the seat of Bennelong that John Howard used to hold – the former tennis player, John Alexander’s father Gilbert was born in Britain. He’s likely to have conferred citizenship by descent to his son. What’s your response to that?
LEIGH: Well, another day, another Liberal appearing to be in breach of the Constitution. This just isn’t good enough. Malcolm Turnbull has been dragged to the point at which he’s at today, but this approach that he’s taken – again, we’re just not sure it’s tough enough. Bill Shorten’s been absolutely clear that Labor would support a system of disclosure with proper oversight. This is just voluntary disclosure by MPs and it’s not clear it’s going to be enough.
EPSTEIN: Thanks for your time, Andrew Leigh.