JOE AND JOSH PRESS THE PANIC BUTTON AS TAX INACTION LAID BARE
Joint media release with Shadow Treasurer Chris Bowen
The Abbott Government is a shambles on multinational tax, as ministers desperately try to hide their inaction on making multinationals pay their fair share.
Later today the Senate’s corporate tax inquiry will table a report which lays bare the worrying scale of tax avoidance by big multinationals.
Joe Hockey and Josh Frydenberg have been out spinning hard in response, but they can’t even get their own policies straight.
On ABC radio, Mr Hockey announced a ‘crackdown’ on tax dodgers and promised to introduce legislation to Parliament within a month for changes to Part IVA of the Tax Act.
This is at least the fourth time that Mr Hockey has announced this same measure, and the legislation has been scheduled for introduction to Parliament for weeks already.
As Mr Hockey was making re-announcements on the ABC, over on Channel 7 Josh Frydenberg was telling viewers that this change has already been legislated, saying:
“We have passed legislation through the Parliament to tighten the rules so that we can go after these companies. One is called a Part IVA anti-avoidance provision of the Tax Act.” - Josh Frydenberg, Sunrise, 17 August
Is this the Schrodinger’s cat of legislation: simultaneously passed and not yet introduced?
Back at the ABC, Mr Hockey rubbished the suggestion that there is a need for more transparency in the tax affairs of big companies, saying:
“[The Senate committee] should be aware that in December, all companies that have a taxable income over $100 million have to disclose how much tax they pay in Australia.” - Joe Hockey, ABC Radio National, 17 August
But this is the very transparency measure that Josh Frydenberg is currently hard at work dismantling. He is trying to gut the law by carving out almost half of all companies they would apply to. This follows the Coalition voting against tax transparency when Labor was in office.
The Abbott Government’s real record on multinational tax is one of inaction and hot air. Since coming to office, the only concrete things they have done are to re-open offshore loopholes worth $1.1 billion, and attempted to keep big companies’ tax affairs secret.
Only Labor has a proud record of firm action tackling multinational tax avoidance. In government, we:
- Delivered the Countering Tax Avoidance and Multinational Profit Shifting Bill 2013, which plugged loopholes in Australia’s transfer pricing rules and anti-avoidance provisions. The Abbott Coalition voted against this bill.
- Amended the Taxation Administration Act to require the Australian Tax Office to publish information about the income, taxable income and tax paid by companies earning over $100 million from 1 July 2015. The Abbott Coalition voted against this change.
- Passed the Cross-Border Transfer Pricing Bill 2012, which cracked down on companies overvaluing assets in international transactions. The Abbott Coalition voted against this bill.
- Signed 28 bilateral information sharing agreements with other nation’s tax agencies, including countries like the Cayman Islands and Monaco. Tax Commissioner Chris Jordan says better information sharing with other countries about the tax affairs of big multinationals netted $730 million in additional tax between 2012 and 2014.
- Gave the Australian Tax Office $109 million to set up a specific audit program looking at the use of offshore marketing hubs. This program has already paid dividends, with 13 companies hit with revised tax bills worth $250 million. Tax Commissioner Chris Jordan estimates that all up the program will return $1 billion in additional revenue to Australia over the four years funded by Labor.
In March this year we announced a further package of new measures which will return $7.2 billion to Australia over the next decade. By contrast, Joe Hockey’s much-announced Part IVA changes are so woolly that Treasury could not even cost them.
The Abbott Government should admit today they’ve done nothing to tackle tax avoidance during their two years in office. Their reheated announcements and attempts to mislead about their record aren’t fooling anyone.
MONDAY, 17 AUGUST 2015
MEDIA CONTACT: JENNIFER RAYNER 0428 214 856