Hockey offers nothing but hot air on global profit shifting

MEDIA RELEASE 

HOCKEY OFFERS NOTHING BUT HOT AIR ON GLOBAL PROFIT SHIFTING

Treasurer Joe Hockey has revealed he has nothing but talk to offer when it comes to making multinational companies pay their fair share of tax. 

In Parliament this morning, Mr Hockey spent 15 minutes mouthing empty words about tackling base erosion and profit shifting by major global firms. But despite all his big talk, Mr Hockey failed to outline how his government will make companies that evade tax pay a single dollar more tax. 

What’s more, Mr Hockey has heaped responsibility for pursuing global tax avoidance onto the Australian Tax office, at a time when his government is axing 2100 tax experts from that agency.  

Shadow Treasurer Chris Bowen said Mr Hockey’s comments show the Coalition Government is just not serious about tackling tax evasion.

“Joe Hockey is perfectly happy to take the Schoolkids Bonus away from 1.3 million Australian families and scrap superannuation tax cuts for the 3.6 million poorest Australians. 

“But faced with the challenge of making big companies pay a fair rate of tax on their Australians profits, suddenly the tough guy Treasurer becomes a total pushover,” Mr Bowen said.

“This again shows that the Abbott Government has the wrong priorities for Australia and lacks the guts to stand up to its corporate mates in the wider interest of our community. Empty talk just won’t cut it for tackling multinational tax.” 

Shadow Assistant Treasurer Andrew Leigh said that if Mr Hockey really cared about addressing global tax avoidance, he would not have walked back on over $1 billion worth of measures identified by Labor in 2013.

“Labor in office laid out a comprehensive package of tax measures that would have prevented $5 billion in revenue being moved offshore. By scaling back our plans Mr Hockey has ensured that over $1 billion can still be siphoned offshore through tax loopholes,” Dr Leigh said.

The Abbott Government has also stripped the Australian Tax Office of the resources it needs to pursue multinational tax avoidance, leaving it woefully under-powered to go up against big global firms. 

“The tax commissioner himself has acknowledged that every dollar invested in staff generates between $1 and $6 in revenue. By cutting $189 million from the agency’s budget, the Abbott Government is actually forgoing hundreds of millions of dollars in revenue,” said Dr Leigh.   

Labor tax measures abandoned by Joe Hockey:

Measure

Date Announced

Value over the forward estimates

Reforms to the offshore banking unit regime

13th May 2014 (BP 2)

-180 million'

Legislative elements of the measure to improve tax compliance through third party reporting and data matching.

13th May 2014 (BP 2)

-113.1 million'

Not proceed with changes that would have applied to multiple entry consolidated groups.

13th May 2014 (BP 2)

-140 million'

Abolishment of section 25‑90

6th November 2013

(Media Release)

‑$600 million'

Offshore Banking Unit

6th November 2013

(Media Release)

-$100 million'

   

Total sum= -$1133.1 billion

         

THURSDAY 4 SEPTEMBER, 2014

MEDIA CONTACT: JENNIFER RAYNER 0428 214 856


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