FRIDAY, 19 MAY 2017
SUBJECT/S: ATO tax fraud case, federal corruption commission, Labor’s tax haven transparency package, whistleblower protections, Labor’s budget reply.
SABRA LANE, PRESENTER: The Government in last week's Budget revealed that is was pushing ahead with stronger anti-tax avoidance measures to try and ensure multinational companies pay their fair share of tax here. It's banking on the Australian Tax Office collecting more than $4 billion extra as a result during the next financial year. Labor this morning is proposing other measures like forcing companies to declare where they pay tax, and greater incentives for whistleblowers.
Joining me now to discuss it is the Shadow Assistant Treasurer, Andrew Leigh, from our Sydney studio. Mr Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Sabra, great to be with you.
LANE: We'll discuss your ideas in a moment. First, there's a lot of attention on the ATO right now given the arrests over an alleged $165 million fraud case. There are some concerns that this might actually jeopardise another investigation into the Panama Papers. Do you share those concerns?
LEIGH: That's certainly my first concern. It is obviously good that the Tax Office's systems flagged this issue up, but it is an incredibly serious challenge. Obviously I don't want to go to any of the specifics of the individual who has now been charged, but Labor is concerned that those ongoing multinational tax investigations continue to take place. We do believe that this reinforces the need for the Senate investigation into a national integrity commission which we have been calling for quite some time now.
LANE: Would you like to see some sort of statement from the Australia Taxation Office Commissioner about what happens now with the Panama Papers?
LEIGH: Less about a statement I think, Sabra, than just about ensuring that they are doing the work to maintain the integrity of those other investigations. Also, it is a reminder of the importance of transparency. Tax transparency is a vital tool here, and having the system as transparent as possible is critical for ensuring that big companies pay their fair share.
LANE: How confident are you that there are the right checks and balances in place within the ATO?
LEIGH: As I said, it's reassuring that their systems automatically flagged this up but deeply troubling that charges have been laid against someone of that seniority.
LANE: You said that this strengthens your calls for a federal corruption commission. Will you try and renew that push in the next parliamentary sitting session?
LEIGH: It is something we've been pushing consistently. It is really a matter for the Government and the crossbench as to whether we are able to get that Senate inquiry up. But many Australians, I think, want to have the assurance of a national integrity commission. And having a Senate committee carefully looking into the question is absolutely the right way to go.
LANE: You want better incentives for whistleblowers. What incentives are you talking about and why are they needed?
LEIGH: Sabra, just to take a step back. This is a package focussed on tax havens and making sure we don't have these small islands bleeding away global tax revenue. One of the ways in which we'd look to do that is a measure which exists in the moment in the United States and Britain which says a whistleblower whose evidence leads to a tax conviction is able to claim a very small share of the penalty - up to one per cent of the penalty. That is called the False Claims Act in the United States, and it does create an internal incentive for the truth to come out.
LANE: One per cent, it sounds like a small amount but given some of the amounts of money we are talking about when talking about these particular cases, that could end up being a huge windfall.
LEIGH: It is a significant windfall for the individual if they are the reason the prosecution takes places, if they have brought a public benefit to the rest of us. Then it is about maintaining the protection for those whistleblowers. Labor in the last term of Government advanced protection for public sector whistleblowers. This now looks at their private sector counterparts.
LANE: How do you ensure that people who may be up to no good don’t rat on co-conspirators and end up attempting to collect the rewards here?
LEIGH: Well, obviously there’s details as to how you would put it into place, but I think Sabra, the basic principle that you want less wrongdoing, strong incentives for disclosing wrongdoing are absolutely critical. It’s worked well in Britain and in the United States. There, it is not the bulk of cases that are brought - but in some cases it ensures that we’re able to get to the truth of what’s going on.
LANE: The government’s already proposed new protections from July next year. As part of that process, a parliamentary committee is looking at this issue right now. The AFP and I think ASIC have also suggested that incentives for whistleblowers would be a good idea. Is Labor sort of sniffing the wind on this and trying to look like it’s getting ahead of the Government on this and claim credit for something that it might already have in train?
LEIGH: Well, this goes significantly beyond what the Government announced in last year’s budget. It takes us much closer to the British/United States position in which whistle blowers receive a part of the penalty, rather than simply the proposals the government has, which are much more light touch.
LANE: Labor’s also proposing that multinationals and companies bidding for government work should declare where they pay tax and how much. Why do you want this in place?
LEIGH: Again, it’s an important transparency measure. If you're going for a large government contract - in this case, over $200,000 - we think it’s appropriate that Australians know your country of tax domicile. It’s not to say that companies are banned in any instance, simply that that information needs to be made public.
LANE: And how will that lead to more tax coming to Australia’s way, you think? Is it a case of sunlight being the best disinfectant, is that what you’re asserting?
LEIGH: It’s the old Louis Brandeis line. Making sure that Australians are aware of where a company is located then brings a degree of public pressure on. Australians do the right thing and the vast majority of us pay the tax that we need to pay. But the thing about tax havens, Sabra, is they don't just create a back channel through which some firms get away from paying their fair share, but they also undermine the integrity of the system. We need that integrity of the system, because one of the reasons I pay my fair share of taxes is because I know you pay your fair share of taxes. These sorts of measures reinforce that.
LANE: You’re factionally unaligned in the Federal Parliament. How did you interpret Anthony Albanese’s speech this week labelling the budget a victory for Labor in contrast with Bill Shorten’s sentiments deriding the budget?
LEIGH: I think this is a distinction without a difference. Both Mr Shorten and Mr Albanese have said the budget has the rhetoric of fairness and the reality of cuts; and that really what we’ve seen from the Prime Minister Turnbull is words, but not the dollars to back that up. Still the $22 billion cut away from schools, for example.
LANE: Well, these comments follow the critique of an ad a couple of weeks ago. Some are viewing this through a leadership prism. Is that how it should be viewed?
LEIGH: Again, both men criticised that ad and said that it shouldn't have been made. Sabra, I worry often that we’re getting to this mode of conflict journalism. We look for the differences between people. As a Labor person for all of my adult life, I'm just enormously proud to be in the same party as Bill Shorten and Anthony Albanese. I'm proud of Bill’s work as leader and Anthony’s work on our infrastructure agenda. Both of them are doing tremendous work and in this case, both of them are singing from exactly the same hymn sheet.
LANE: Andrew Leigh, thank you for talking to AM this morning.
LEIGH: Thank you Sabra.
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