MONDAY, 02 MARCH 2015
SUBJECT/S: Labor’s multinational tax avoidance package.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: When Labor was last in office, Wayne Swan and David Bradbury put together a $4 billion package of measures to tackle multinational profit shifting. This is an issue that many around the world have been concerned with – whether it's the OECD, the G20, or even the Australian Tax Office. But the Abbott Government has dropped the ball. When they came to office, they gave more than $1 billion back to multinationals – firms that need a tax handout from the Abbott Government like Prince Philip needs a knighthood. Over the last year, Labor has been working on our own policies. Figuring that the Government wasn't going to act fairly, we felt we needed to put together our own package. Today, Bill Shorten, Chris Bowen and I will be announcing a $1.9 billion package that will deal with some of the forms of multinational profit shifting. This is a government which has given a billion-dollar handout to multinational firms while cutting the wages of the cleaners who clean their offices. Labor will take a fairer approach, one that ensures a level playing field for businesses and a fair deal for Australian taxpayers. Happy to take questions.
JOURNALIST: Has the potential for a shift in corporate behaviour been factored in, if other countries aren't putting similar things in place but Australia is acting somewhat alone in this?
LEIGH: It's a good question. There's a range of different approaches that can be taken on this. We've taken an approach which is consistent with Australia's tax treaties and which has been carefully costed by the Parliamentary Budget Office. But as firms change and as types of firms change, the challenge of ‘permanent establishment’ remains a live one. This will continue to be a conversation at the OECD and the G20. Labor is engaged in that conversation and we are acting. Meanwhile the Coalition, at every turn, is giving money back to the big end of town while slugging pensioners and families and making life harder for other Australians.
JOURNALIST: This kind of talk does worry overseas investors – what is your message to them in looking at this policy?
LEIGH: Labor's package is ensuring a level playing field. As we'll discuss more later this morning, it is grounded in OECD principles. Ours is a carefully-calibrated approach to ensure multinationals pay their fair share and don't double-dip across different countries' tax arrangements.
JOURNALIST: In terms of the package, you've mentioned that previously under Labor it was $4 billion and now it's $1.9 – does that mean this is a less ambitious approach?
LEIGH: Let me clear about those numbers. Labor brought in a $4 billion package, and the Coalition wound back $1 billion of that package. We're now coming forward with a further $2 billion package to address the challenge of multinational profit shifting. No more questions? Thanks everyone.