More transparency, tougher laws - Transcript, 5AA with Leon Byner

E&OE TRANSCRIPT

RADIO INTERVIEW

5AA WITH LEON BYNER

MONDAY, 6 NOVEMBER 2017 

SUBJECTS: Paradise Papers, Labor’s multinational tax avoidance laws and Scott Morrison’s plans to give multinationals and millionaires a tax cut.

LEON BYNER: Tonight, Four Corners on the ABC are taking you inside what you call the secretive world of tax havens, where corporations and the wealthy operate far from public view. They’re going to reveal the lengths that some of the world’s most powerful business figures and global corporations are going to to avoid paying tax. As this is happening, there are ads on television – I’m sure you’ve seen them – where the federal government is saying that they’re now collecting billions of dollars more from companies like this, who have tax havens or who were avoiding tax. In fact, this morning on our 9am bulletin, they were suggesting that there’s over $3 billion – Scott Morrison, the Treasurer, said we’re getting good at this, we’re collection a lot more money. Let’s talk to the Shadow Assistant Treasurer, Andrew Leigh. Andrew, thanks for joining us today.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Leon. Great to be with you.

BYNER: Are we doing well in this collecting taxes that should be paid or is there a long way to go?

LEIGH: Leon, there’s a long way to go on this. We have a Treasurer who wants to give huge tax cuts to multinationals and at the same time wants to raise taxes on average workers. Labor doesn’t think that’s fair. We’ve got a strong history on multinational tax. We put in place the laws which accounted for most of that $4 billion that the Treasurer refers to. The irony is, Leon, that the Treasurer voted against those laws in Parliament when Labor introduced them in 2012-13.

BYNER: We’ve got them now, so are you saying that the laws need to be even more rigorous?

LEIGH: Absolutely. With regard to tax havens, which will be the focus on the Four Corners investigation tonight, Labor believes that if a public company has dealings in a tax haven then they ought to disclose that to shareholders as a material risk. If you want to go for a government tender, Labor believes that you ought to disclose your country of tax domicile. We want to see more transparency and tougher laws. We’ve got a package of reforms on the table to close multinational tax loopholes and bring in more than $4 billion over the course of the next decade. 

BYNER: Is that $4 billion more than what’s been collected now?

LEIGH: Absolutely. These are loopholes which remain open at the moment, which are defended by Scott Morrison and his colleagues when they go to industry conferences. Yet, at the same time as not being willing to close the loopholes, they want to bring down the rate that big corporates pay. And in the process, your listeners are going to have to make up the difference with Scott Morrison wanting to raise taxes on everyone earning more than around $20,000.

BYNER: Look, there was a G20 conference, as you well know, sometime back where everybody was suggesting that this was a global issue. By doing what you’re suggesting and be more rigorous, would that be a disincentive to investment? Because again, the G20 meeting at the time – which goes back a while and you’re aware of it – was suggesting that if countries individually step out of the ring and do something else, that that could actually hurt their investment. Is that fair comment or not?

LEIGH: It’s in important point to raise, Leon. We benefit from foreign investment and indeed, South Australia has historically benefited greatly from that. But the attraction of Australia shouldn’t be the latest boondoggle, lurk or tax loophole. It should be that we’re a great place with strong institutions, a well trained workforce and a good set of laws that encourage enterprise. I don’t think there’s anything inconsistent with saying that we welcome foreign investment but we expect those overseas companies to abide by good labour laws and pay their fair share of tax. The thing about the Treasurer is, he’s probably spent almost as much on multinational tax ads, pretending he was doing something, than the laws he has passed have actually raised! He won't get tough with the big end of town.

BYNER: So what you're asking him to do is invoke the rigorous laws which you are now proposing?

LEIGH: Absolutely. And this doesn't go to anything that other countries aren't moving towards. It closes a loophole around the amount of debt that companies can deduct using a principle called the Worldwide Gearing Ratio. It basically says that if you've got a lot of debt in your entire enterprise, you can deduct a lot in Australia but you can't use these little internal loans in order to bring down your tax rate. If you run a small milk bar, you can hardly take advantage of internal debt structures but somehow these multinationals seem to be able to do exactly that.

BYNER: Andrew Leigh, Shadow Assistant Treasurer, thank you for joining us today. It's good to know a little bit about the taxes. What happens is of course you've got the Cayman Islands, you've got all these different countries whose tax rate is much lower and invariably the businesses like to be registered there. I thought a smart rule is wherever you do business, it is wherever you pay the tax. It seems pretty fundamental doesn't it?

ENDS


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