JORDAN JOINS GOOGLE TAX CRITICS
Joe Hockey’s Google Tax has yet another critic, with Tax Commissioner Chris Jordan describing it as only a ‘stopgap’ measure for tackling tax avoidance by global tech firms.
The Tax Commissioner is the latest in a string of experts to advise that the Treasurer’s thought-bubble will not solve the problem of big multinationals shifting profits offshore.
The independent Parliamentary Budget Office and tax experts such as KPMG and Minter Ellison have already warned that the Treasurer’s plans would violate Australia’s tax treaties and undermine the OECD’s international effort to build better tax rules.
SENATE TAX INQUIRY GETS UNDERWAY
The Senate Economics Committee is today launching an inquiry into the tax practices of the biggest firms doing business in Australia.
Labor supported this inquiry because we believe Australians deserve to know how much tax big companies are really paying.
We will be using this inquiry to help identify the practices and loopholes that let companies shift profits overseas so that we can work on closing them for good.
Bill Shorten and Labor have already proposed a package of measures to tackle debt deduction arrangements, stop companies double-dipping on tax benefits, and increase resources for the Australian Tax Office.
The Parliamentary Budget Office has confirmed that this package would see multinational corporations pay $1.9 billion more over the next four years.
HARPER REPORT SHARES LABOR’S FOCUS ON THE SHARING ECONOMY
The Harper Competition Review has underlined the importance of re-thinking regulation as new services and competitors emerge in the sharing economy.
Backing Labor’s launch last week of a Discussion Paper on this emerging sector, Professor Harper’s report flags the priority need for reform in areas like taxi licencing, property zoning and product standards.
These are some of the key areas where new services like Uber and AirBNB are disrupting existing rules and regulations.
TUESDAY, 31 MARCH 2015
SUBJECT/S: Tax discussion paper; Harper Competition Review; Martin Ferguson; Liberal sexism
PATRICIA KARVELAS: I'm joined now from Canberra by the Shadow Assistant Treasurer Andrew Leigh and from Melbourne by the Parliamentary Secretary to the Treasurer, Kelly O'Dwyer. Welcome to you both.
KELLY O'DWYER, PARLIAMENTARY SECRETARY TO THE TREASURER: Hi Patricia.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G'day Patricia, g'day Kelly.
KARVELAS: To the Treasurer's taxation discussion paper first: there's no prospect of an agreement on GST changes, but possible bipartisan support – I'm hearing noises, Kelly O'Dwyer – on removing tax breaks for superannuation contributions. Am I understanding the noises and the hand-signals right?
O'DWYER: It's only been a day since the paper has been released, so I think it's too early to rule anything out Patricia. I think that one of the key things we want to do with this tax white paper is make sure we have a proper discussion around whether our tax system is currently fit for purpose. We know that in terms of the revenue that is raised at the moment, around 70 per cent in Australia is raised from personal and company income taxes. That compares to just over 30 per cent of our OECD competitors on average. So there's a lot of work for us to do. We know that when it comes to company tax, we've got 800,000 companies in Australia and yet 12 companies pay a third of all those company taxes. There's around 125 taxes that are paid at a state, territory and federal level but of those, just 10 taxes raise 90 per cent of the revenue.
KARVELAS: It seems one area where you could get immediate support from Labor – and you always talk about this lack of bipartisanship – would be the tax breaks at the higher end for super. So why not do it?
O'DWYER: What we're looking at is making it simpler. The long and the short of it is making it simpler, making it fairer and making sure that what we put in place is going to stand the test of time to make us internationally competitive. Because we are in a globally-competitive marketplace right now and we need to be competitive on personal income tax rates and company tax rates. On superannuation...
KARVELAS: Let me just give Andrew Leigh a turn. Or actually, what were you just about to say on superannuation? That you need to reform it?
O'DWYER: On superannuation, we're very interested in seeing what people have to say about the system. We know that there's been some views already put forward. But it can't just be a matter of simply raising taxes, which is what we often hear from those in politics who are very keen to raise taxes. We need to look at how we can also lower taxes - personal income tax rates, company tax rates. Because that is what is going to make us competitive.
KARVELAS: Andrew Leigh, what do you think? I know that Labor supports superannuation reform, but when are you going to consider the GST? You keep saying you're playing the rule-out game on the GST, but so many significant business figures are saying this needs to be looked at. Why isn't Labor prepared to do it?
LEIGH: Patricia, the tax debate is a broad one as Kelly has outlined. We need to make sure that we're looking at where we sit relative to the rest of the world. Our consumption tax is lower than the OECD average, which you've raised; our income taxes on the average worker, low-wage worker and high-wage worker all sit below the OECD average. It's our company tax that sits a little above the OECD average. Chris Bowen has talked in the past about an aspiration to bring that company rate down because ultimately the company tax falls predominantly on workers, and we're able to boost total economic growth if we can get that down. But we also need to make sure we've got equity there. Public finance economists talk about equity, efficiency and simplicity as being the cornerstones of tax reform. When we look at superannuation taxes, we've got the top five per cent of earners getting five times their proportionate share of the superannuation tax concessions. As a nation we're spending $31 billion a year on these tax concessions so we need to make sure that is money that's really as well spent as it can be.
LESS ISN’T MORE ON MULTINATIONAL TAX
Joe Hockey’s only idea for tackling multinational profit shifting is to cut taxes for big multinationals and then cross his fingers they’ll pay them.
The Government’s tax discussion paper clearly states that base erosion and profit shifting pose an increasing risk to Australia’s corporate tax base.
It acknowledges that loopholes and complex offshore structures are letting some big multinationals avoid paying their fair share in Australia.
Despite pointing out the significance of the problem, Joe Hockey’s discussion paper is completely silent on serious ideas to fix it.
This is exactly the kind of backwards priorities we’ve come to expect from a government that handed $1.1 billion back to big multinationals while taking $6,000 a year from some of Australia’s most vulnerable families in its first Budget.
SATURDAY, 28 MARCH 2015
SUBJECT/S: Tony Abbott and Joe Hockey’s new Bank Tax
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon and welcome to Hackett where I've just been holding my annual Welcoming the Babies event – an event to celebrate community and the joys and challenges of new parenthood.
We've heard today that after going to the election saying there would be no new taxes, the Government is breaking that promise yet again. The Government, so far, has broken its 'no new taxes' promise when it has come to the high income earner levy, fuel tax, the GP tax, the NBN tax and now the Bank Tax.
This is the fifth time they've broken their promise on no new taxes. Joe Hockey really needs to start thinking about maintaining a touch of honesty, and to start worrying more about the Budget numbers than about his own numbers in the party room. He should spend a little bit more time focusing on the job needs of the unemployed – with unemployment rising – rather than worrying about his own LinkedIn profile and what he'll do for his next job.
Happy to take questions.
Innovation and reform: Labor’s multinational tax agenda
Speech to the Minerals Council of Australia Taxation Conference
I’d like to thank Brendan Pearson from the Minerals Council for the invitation to be here today. I’ve known Brendan for almost two decades, since he was a scribe for the Australian Financial Review, and I worked as trade adviser to the late Western Australian Senator Peter Cook. Brendan is consummately polite, thoughtful, and willing to engage with detail. I was very pleased when Brendan became Chief Executive of the Minerals Council in December 2013, and I know he has the respect of both sides of politics. At Brendan’s invitation, I’ve been involved in a number of Minerals Council events over the past year, and look forward to continuing our conversation in the years to come.
That said, I know I wasn’t your first choice for today, and I come bearing apologies from Shadow Treasurer Chris Bowen. Chris had a pre-existing commitment representing Australia’s interests at the 2015 Boao Forum, otherwise he would have been here.
On a visit to Perth earlier this month, I took a tour of BHP’s Integrated Remote Operations Centre. Many of you will have visited this centre – or its Rio counterpart. There’s something extraordinary about being at the heart of a network of computers that are operating one of the largest mining operations the world has ever seen. With my parliamentary colleague Alannah MacTiernan, we chatted with the rail operators, who are routing trains 1500 kilometres away; to the port team, who are monitoring dust levels in Port Hedland in real time; and to people who are operating individual machines. One man, sitting in front of half a dozen television monitors, was operating a machine to drill blast holes. He had worked for years as a drill operator, and reminded us that being in the cab is a lot tougher on your back. At its best, technology and ingenuity can boost productivity, and create better jobs.
Sharing works but we must define the rules, Herald Sun, Thursday 26 March
The founders of the accommodation app AirBNB got their start selling “Obama-Os” novelty cereal at the 2008 Democratic presidential conventions.
Brian Chesky and Joe Gebbia used the money raised to build a beta version of the app, which won them a spot at the famous Y Combinator start-up accelerator at Stanford University and $20,000 in seed funding.
Today, AirBNB is valued at roughly $US10 billion. More than 30 million guests have already stayed in an AirBNB-listed property in one of 34,000 cities across 190 countries.
We’re getting used to hearing stories like that: the little digital company that took the world by storm. The clever idea that turned an industry on its head and made millions. Beyond AirBNB, the past few years have seen ride-sharing apps like Uber, freelancing services like AirTasker, goods-sharing sites like Spinlister and the pet-minding service Pawshake.
TUESDAY, 24 MARCH 2015
SUBJECT/S: budget; Abbott Government’s broken surplus promise
EMMA ALBERICI: Joining me now from Canberra are the Assistant Treasurer Josh Frydenberg and Shadow Assistant Treasurer Andrew Leigh. Gentlemen, welcome.
SHADOW ASSISTANT TREASURER ANDREW LEIGH: Good to be here.
ASSISTANT TREASURER JOSH FRYDENBERG: Hi, Emma.
ALBERICI: Josh Frydenberg, when did the budget crisis end?
FRYDENBERG: Look, we were left a fiscal nightmare by our opponents and we've spent the last 18 months trying to repair it. There's still a long way to go. The key point here is that we were bequeathed spending growth at 3.7 per cent by Labor, and we've reduced that to 1 per cent. We are starting to see green shoots across the economy. Housing starts are up significantly, job advertisements are the highest they've been in 28 months. We're also seeing a good result following the lower Australian dollar – it's a boost for our export industries. Interest rate cuts as well as lower fuel prices are putting more money in the hands of families. So there are some very good signs across the economy but we are still very much focused on fiscal consolidation.
SKY PM AGENDA
TUESDAY, 24 MARCH 2015
SUBJECT/S: Rise of the sharing economy; Budget; Abbott Government’s cuts to pensions
DAVID SPEERS: You'll be aware of things like Uber – instead of catching a taxi and AirBNB – instead of staying in a hotel. This is a huge growth area at the moment. Services like AirBNB where you can go on a website and find a place to stay in thousands of cities around the world and do it relatively cheaply, it has had incredible growth. It has gone from a company worth about $20,000 to now being worth about $10 billion and it's available in 34,000 cities, 190 countries, 25 million guests have used it. Here in Australia, AirBNB has generated $114 million in economic activity in one year alone in Sydney. But it is completely unregulated at the moment, and is it being taxed enough? A lot of taxi drivers will complain that Uber drivers aren't paying a thing for a taxi licence, and they're cutting their grass essentially. Today the Shadow Assistant Treasurer, Andrew Leigh, gave a speech about all this at the National Press Club. He's launched a Discussion Paper and he joins me now. Thank you for your time.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good to be with you, David.
SPEERS: This is a fascinating area, because it's a growing part of the economy here and around the world. But potentially it's not really regulated at all at the moment.
LEIGH: That's certainly the challenge, David. And I thought you did a really nice job in your intro there in talking about the sheer growth of this sector.
SPEERS: Well, I pinched a lot of your numbers.
LEIGH: Just to give you a couple more: one in 10 Sydneysiders has taken a ride-sharing ride, despite Uber having launched there less than a year ago. One in 300 Australian homes are currently listed on AirBNB. So we see the possibilities of this being good for consumers. But Labor is also concerned to make sure that workers are looked after and that we have the appropriate public safety protections that really allow this industry to flourish.