Labor's Plan to Tackle Tax Havens - Speech, Federation Chamber

LABOR'S PLAN TO TACKLE TAX HAVENS

Federation Chamber, 20 June 2018

In 2012, the Coalition voted in the House and Senate against laws to close a multinational tax avoidance loophole. Last year, we saw that very same law being used to secure a $340 million judgement against Chevron. But, extraordinarily, we didn't see the Turnbull Government saying: 'Mea culpa. We got it wrong in 2012. If we'd had our way back then, the budget would now be hundreds of millions of dollars worse off, net debt would be rising even faster than it is today'—hard to believe given that net debt is rising faster than it did even under the global financial crisis. We saw none of that apology. Instead, we saw the government patting themselves on the back for the Chevron decision, patting themselves on the back for a court decision based on a law they had voted against.

Labor's record on closing multinational tax loopholes is an extraordinarily strong one. In government we tightened debt deduction loopholes, and we would do so even further under a Shorten government. We've said that we would move to a worldwide gearing ratio rather than the arm's length test and the arbitrary thin-cap thresholds, and that we would deliver more tax transparency by restoring the $100 million threshold for reporting to the public of total income, taxable income and tax paid. We said we'd appoint a community sector representative to the Board of Taxation, introduce public reporting of country-by-country reports, provide protection for whistleblowers who report on entities evading tax to the Australian Tax Office and introduce mandatory shareholder reporting of tax haven exposure, requiring firms to disclose to shareholders as a material tax risk if a company is doing business in a tax haven. We've said we'd require government tenderers to disclose their country of tax domicile if they're tendering for contracts worth more than $200,000.

The impact of tax havens on the Australian tax system was brought home by a recent paper from Gabriel Zucman and co-authors, which suggests that up to $16 billion could be flowing offshore from Australia to tax havens. The point the paper makes is that around 40 per cent of multinational tax profits are shifted to low-tax or no-tax jurisdictions and that, when that shifting occurs, for every dollar of tax which is raised in such jurisdictions $5 is lost in jurisdictions with regular company tax rates. Labor would develop guidelines for tax haven investments by superannuation funds, introduce a publicly accessible registry of the beneficial ownership of Australian listed companies and require that the Australian Taxation Office's annual report provides information on the number and size of tax settlements.

Yet from the Coalition we have simply mistruths about Labor's stance. We have repeatedly heard in question time the mistruth that Labor voted against the multinational anti-avoidance law. I can say this is categorically false. Labor voted against an amendment put together by the Greens and the Liberals that would have raised the tax transparency threshold and that took two-thirds of private companies out of the tax transparency net. We supported the multinational anti-avoidance law. I said as much in parliament and the votes reflect that, but what we didn't support was weakening our system of tax transparency.

Extraordinarily, on 23 August 2017, freedom of information documents reveal, the offices of the Treasurer and the Minister for Revenue and Financial Services requested the ATO media unit to urgently check a joint media release, allegedly about closing Labor's loopholes with a focus on the 'highlighted bit in particular'. I can table the documents if the House wishes. One of the highlighted claims was that Labor voted against the multinational anti-avoidance law. As I've said, this is absolutely false.

The question is: is it normal for the government to request that the ATO fact-check partisan political claims? We know that the government has a track record of using the Public Service for its own partisan ends. We've seen the use of Treasury in order to come up with concocted claims about Labor's dividend imputation reform policy.

(Time expired)

ENDS
 
Authorised by Noah Carroll ALP Canberra


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