MONDAY, 29 FEBRUARY 2016
SUBJECT/S: Tax reform, multinational tax
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning everyone. Today I'll be introducing into Parliament a private member's bill to toughen the penalties on multinationals. I want to say a couple of words about how we got here. In 2013, Labor in office introduced the biggest ever package cracking down on multinational tax avoidance. The Coalition voted against it. We introduced changes that provided more tax transparency and we saw the first data released last December. The Coalition voted against those too. In the first half of this Parliamentary term, Labor put together a $7 billion multinational tax plan carefully costed by the Parliamentary Budget Office and informed by the OECD. The Coalition are refusing to implement it. When the Coalition bring to Parliament their plans, they just have asterisks where the budget numbers should be. The Coalition are yet to bring a serious multinational tax plan to the Parliament.
Last week we saw Labor in the Senate amend multinational tax laws to provide more transparency and therefore ensure more tax paid by multinationals. And today I will be introducing a private member's bill that will ramp up the penalties. Because right now, for a multinational that fails to lodge its country by country accounts, the fine is $5400. To a billion dollar company, that represents 0.00054 per cent of their revenue. It's a slap on the wrist when we need a serious penalty. When we say to a company ‘obey the law or pay the fine’, we don't want them to chuckle out the side of their mouth and just go off and pay the fine. My private member's bill will increase the penalties on multinationals 50-fold from $5400 to $270,000 plus triggering an audit if firms don't comply. Australians have had enough from firms who don't play by the rules. Labor is the only party who is serious about tightening rules on multinational tax.
Yet again, Labor is leading the debate on tax. The chances of Malcolm Turnbull coming up with a fair, pro-growth tax plan are like the chances of Godot turning up midway through a Samuel Beckett play. Malcolm Turnbull is simply incapable of providing the tax leadership and the economic leadership that he promised before he got rid of Tony Abbott. Labor is serious about tax, we have a hundred billion dollars of carefully costed savings plans on the table and we're providing the economic leadership that Malcolm Turnbull promised but has failed to deliver. Happy to take questions.
JOURNALIST: Labor has been accused of being rough around the edges on tax reform. Labor plans to change the tax (inaudible) and the State and Federal governments to pay for the larger health and education costs down the track?
LEIGH: Labor's plans provide us with the means to properly fund our schools and hospitals into the future. We were able to announce the 'Your Child, Our Future' plan because we were able to point to carefully costed savings. The Coalition simply sloughing off their budget woes onto the States, thinking that somehow the answer to every budget crisis is to ask somebody else to pay for it. Australians want well-funded schools and hospitals and they want to make sure that the tax mix is fair. We've seen endless thought bubbles from this Government, we've seen them promising to cut individual taxes, cut company taxes, raise the GST, or give the problem off to a back bench committee because frankly policy making seems to be too hard for this Government. We're yet to see a clear and carefully costed plan from this government. Australians will continue to wait for that like waiting for Godot.
JOURNALIST: Dr Leigh, how did you arrive at the $270 000 figure? Surely that's still a slap on the wrist for multinational companies raking in billions and billions of dollars a year?
LEIGH: We believe that it's an appropriate penalty, $270 000 involves a serious imposition to a multinational that fails to lodge it's accounts. It's 50 times larger than the penalties currently available in the law. And it shows that when it comes to dealing with multinational tax avoidance, Labor is 50 times as serious about the problem as the Coalition.
JOURNALIST: We've seen reports this morning that the Government is considering changing taxing on superannuation, who tax the marginal rate plus 15 per cent, does Labor support that?
LEIGH: Well another day, another thought bubble from the Government. Presumably will have the predictable array of backbenchers trying to pop the Prime Minister's and the Treasurer's latest thought bubble. Australia doesn't need more thought bubbles from this government on economic policy, they need actual clear ideas. Australia was promised before the Abbott-Turnbull Government won office, a tax white paper within the first two years. That process began with the Re:Think discussion paper with millions of dollars spent by community and business sector groups getting involved on the Government's conversation about tax. All dumped the moment the Turnbull-Morrison team came to power in favour of – well who knows what – because who knows what the Government is actually going to do on tax reform. When they've got serious ideas, we'll seriously respond to them.
LEIGH: This issue has been thoroughly modelled, there has been careful work done on it by people like Saul Eslake, Richard Holden and by a range of other experts. Labor's plan on capital gains and negative gearing is absolutely critical to boosting housing supply and to reigning in some of the fastest growing tax concessions in the budget.
JOURNALIST: Is this ongoing uncertainty around the Coalition's tax policy making your job easy?
LEIGH: I think it's making the job of many Australian businesses hard. We know that the reason that growth is down and unemployment is up, the reason that confidence is down and the deficit is up is in large part because the failure of economic leadership under this government. The economic numbers that should be going down are going up and the ones that should be going up are coming down. When you're flipping and flopping all over the place on economic policy, it's no surprise that consumers and business groups don't have the certainty and confidence they need to make the long term investment decisions. No more questions? Thanks everyone.