Dr LEIGH (Fraser) (11:39): I move:
That this bill be now read a second time.
The image of blue Caribbean seas, golden island sands and a lonely coconut palm standing above a spot marked X on a faded map remains a powerful image in our social mythology.
And well it might, because the notion of buried treasure in the Caribbean is no myth. In the 2012 American election there was widespread outrage at the notion that Mitt Romney had been keeping a significant share of his wealth in the Cayman Islands. Perhaps this was because he and other wealthy people with money to hide from tax had noticed that the previous year the Tax Justice Network's Financial Secrecy Index had declared the Cayman Islands to be the world's second most significant tax haven.
In that year, according to Nicholas Shaxon, author of Treasure islands: Tax havens and the men who stole the world, the Cayman Islands hosted 80,000 registered companies, more than three-quarters of the world's hedge funds and $1.9 trillion on deposit—four times as much as all the banks in New York City.
It might also have been the fact that on the Cayman Islands law books the Confidential Relationships (Preservation) Law makes it a crime punishable by jail to reveal or even ask for information about financial or banking relationships in the Caymans. Making multinationals pay their fair share has always been a Labor agenda. From Opposition, we have led the debate and we have released strong policies. We have announced that if elected to government we will introduce further work.
A key aspect of Labor's multinational tax transparency policy is our commitment in this amendment to raise the penalties for noncompliance with country-by-country reporting. Right now the current penalty for failing to file country-by-country reports is a mere $5,400—lower than the fine that a streaker gets for streaking across the SCG. We do not believe that is fair. We believe that a company which has continued to fail to file its country-by-country reports should face a fine 50 times larger, of $270,000, and also, failure to file should lead to an automatic audit.
One in four of the 1,300 firms covered in the public tax transparency laws introduced by Labor paid no tax despite earning over $100 million. As tax commissioner, Chris Jordan, recently told the Senate:
Our Australian tax system is under fire from the actions of multinationals and large companies seeking to abuse it.
Nicholas Shaxon makes the important point that:
Companies that engage in tax avoidance are engaging in economic free riding—they are taking the benefits from a country without paying for it. This is not only unfair, but it is economically harmful, undermines respect for the rule of law, and distorts markets.
We believe that the right thing to do for companies with the revenue of $1 billion or more, significant global entities, is to ensure that they pay an adequate penalty if they fail to file country-by-country accounts.
This bill continues a strong Labor legacy of asking the big end of town to pay their fair share. If you ask the Prime Minister what he intends to do to help low- and middle-income Australian households, he will hem, whore and dither around. But if you ask him to defend the big end of town, he will be out of the box like Usain Bolt, standing at the dispatch box telling Australians why he cannot do anything serious to stand up against multinationals.
Labor takes a different view. Labor has brought to this place a package of multinational tax bills that will close down loopholes and add $7 billion to the budget bottom line. We believe in greater transparency and lowering the threshold for private companies to have their taxable income and tax paid reported.
We have also said that Labor will disclose the beneficial ownership of Australian legal identities, ensuring that the G20 principles Australia committed to in 2014 are properly enacted.
This bill provides the Treasurer, the Prime Minister and the coalition a clear map in which X is marked to show where Australia's tax treasure is being hidden and a chance to pass considered, constructive and effective tax policies. If the coalition will not act, Labor will. I commend this bill to the House.
The DEPUTY SPEAKER ( Mr Goodenough ): Is there a seconder to the motion?
Mr Stephen Jones: I second the motion and reserve my right to speak.