During the last sitting of Parliament, the Senate voted to establish an inquiry into corporate tax avoidance and multinational profit shifting. The Senate's Economics Committee has now kicked off work on this; you can make a submission any time until 2 February 2015.
CORPORATE TAX INQUIRY GETS UNDERWAY
The Senate inquiry into corporate tax avoidance has kicked off today by asking 40 ASX-listed companies to explain the taxes they pay.
This week, committee chairman Senator Sam Dastyari has written to a range of major firms which have been alleged to pay as little as 10 cents in the dollar on their local earnings.
They have been asked to explain why their effective tax rate is so far below the 30 per cent company tax rate paid by other Australian firms.
Shadow Assistant Treasurer Andrew Leigh said cracking down on corporate tax avoidance is fundamentally about creating a level playing field for all Australian businesses.
Equal to our core: making the case for egalitarianism as Australia’s national value
Speech at the launch of the Bachelor of Economics (Advanced)
University of Adelaide
14 October 2014
I could not be more delighted to be with you this evening on this terrific occasion, the launch of the university’s Bachelor of Economics (Advanced) degree.
I know your degree will be one of only two available in Australia – and as the other one is being offered in Melbourne, I’m serenely confident yours will be the better. When I was Parliamentary Secretary to Prime Minister Gillard, I am sure she once told me she was glad to have had the dual benefit of a Melbourne degree and an Adelaide education.
Or perhaps I made that up. Never mind. I read in the publicity that the degree will be both a “pathway” to Honours and a “springboard” into leadership…I suppose as long as there’s a “ladder of opportunity” at the end of the “pathway” providing access up to the “springboard” it’ll all work just fine.
I kicked off the week by joining Phillip Clarke and Senator Zed Seselja on 666 ABC's Political Panel. Here's the transcript:
ABC 666 CANBERRA
MONDAY, 13 OCTOBER 2014
SUBJECT/S: ACOSS poverty report; national curriculum; national security legislation
PHILIP CLARK: Welcome to our federal political panel. Senator Zed Seselja, ACT Liberal Senator joins me in the studio. Morning Zed.
ZED SESELJA, SENATOR FOR THE ACT: Good morning.
CLARK: And Andrew Leigh, the Labor member for Fraser and Shadow Assistant Treasurer here in the studio as well. How are you?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Very well.
CLARK: Just back on that ACOSS report – it’s not good news, is it? It suggests that on the trendline, poverty in Australia is increasing. Something like two-and-a-half million people, 1 in 6 children, are struggling to fulfil basic needs. One third of children in single parent households live below the poverty line, more than 600,000 children in total. We're heading, as ACOSS suggests, in the wrong direction. What are we doing wrong, Senator?
SESELJA: Well look, I'm still getting across these figures, these I think are 2012 figures. But I think it's always concerning if we're seeing Australians who are doing it tough. We want to have a range of policies that will help people to get out of poverty, help people to better themselves, give them the safety need they need. But fundamentally, to encourage people to have productive work if that's possible, and where that's not possible, to get whatever kind of assistance they can. These are challenging areas of policy; this isn't an issue for one government or one side of politics.
CLARK: Of course not, but it seems to suggest things are getting worse not better?
SESELJA: I think it often depends, and without going into all the detail that I haven't pursued yet, it often depends on exactly how you look at the various figures. I think that there's no doubt that many Australians are doing it tough. And we don't want to see that. We want to see people improving their life, we want to see people at least having the basics of life and certainly going well beyond that where it is possible.
CLARK: There seem to be two things here, Andrew Leigh: there's income support – and in that sense I mean the welfare system – and there's also the issue of whether our economy is being resilient and flexible enough to provide jobs for people. After all, for most people, a job is the difference between poverty and being able to meet your bills. Most people are a month away from poverty in that sense.
LEIGH: You're right about that Philip, it's more true in Australia than most developed countries. Unemployment is a reasonable predictor of poverty in most countries but especially so in Australia. We do a better job than many developed countries in ensuring that we don't have a working poor. Over the last generation we've seen a rising gap between battlers and billionaires and this is seen in the data on relative poverty. So just as the gap between the middle and the top distribution has increased, so the gap between the middle and the bottom distribution has increased as well. I'm really concerned about it and particularly in the context in which we've had a budget brought down which is redistributing resources from the most vulnerable to the most affluent. There’s been a whole host of cuts to supports for the vulnerable but then giveaways for those at the top, such as a gold-plated parental leave scheme. This report really comes at an important time for Australia. We’re at a crossroad on inequality, and we have to work out whether we stay true to our egalitarian traditions.
The government might prefer talking about issues other than the budget, but we can't let them off the hook that easily. In today's Hobart Mercury, I've taken a look at how two particular budget measures favour the lucky at the expense of creating opportunity for all.
Government has an obligation to society's unlucky, Hobart Mercury, 13 October
In the pantheon of Australian sport, no-one sits higher than Don Bradman. Like Babe Ruth in baseball and Wayne Gretzky in ice hockey, Bradman dominated cricket like no other player.
And yet, even for Bradman, luck played a role.
In international cricket, half of all batsmen make their debut at home, and half abroad. That means half get to play their first international test on a familiar wicket, while the other half must confront an unknown one.
That difference matters: a cricketer who makes his debut at home averages one-third more runs than one who happens to play his first match overseas. What’s more, the scoring differential is persistent: a batsman who debuts at home will go on to have a career batting average that is one-fifth larger than a player who walks out on a foreign wicket.
A lot of Australia's economic and financial forecasting relies on data from the Australian Bureau of Statistics. So it's worrying to see what's happening at the bureau under Joe Hockey's watch.
ABS TURBULENCE COMES FROM TREASURER'S NEGLECT
The troubles at the Australian Bureau of Statistics are a direct result of the Abbott Government’s decision to hack millions from its budget, while also leaving the bureau languishing without a permanent head for almost a year now.
Comparing the Coalition’s May budget with Labor’s 2013-14 numbers shows it has slashed the bureau’s funding by $62 million over the next four years.
There has been an explosion of interest in behavioural economics over the past few years, and many interesting studies have shed new light on the often-irrational nature of human decision-making. I was fortunate enough to be invited along to the Grattan Institute in Melbourne to discuss how the insights of behavioural economics can help guide public policymaking.
‘WHAT ROLE FOR BEHAVIOURAL ECONOMICS IN PUBLIC POLICY?’
ADDRESS TO THE GRATTAN INSTITUTE
WEDNESDAY, 8 OCTOBER 2014
While I was in graduate school, two of my classmates, Stefano DellaVigna and Ulrike Malmendier, carried out a study on gym visits. They obtained data from three Boston gyms, and analysed the attendance patterns of members.
Dividing annual fees by the number of visits, they found that the typical gym member spent $17 per visit, even although casual visits cost only $10. In total, the average member loses $600 compared with if they had just paid as a casual. The title of the paper? ‘Paying not to go to the gym’.
It's really disappointing to hear that the Abbott Government is considering making further cuts to Australia's aid budget after already slashing $7.6 billion from it in the May budget. The government's approach is especially galling when there's clear evidence Australians support foreign aid and want to see us do our bit in the region.
Foreign aid cuts are counter to Australian generosity, Canberra Times, 8 October
In the beachside town of Tibar, in Timor-Leste’s Liquiçá District, there is a little community school where local children come each day to learn reading and writing. For a long time, the school’s staff taught only from a couple of outdated textbooks, while the children ground stubs of chalk down to nothing writing on battered slates.
That changed in 2010 when an Australian Government aid program began providing Tibar’s school with brand new textbooks, reading tools and learning materials. For the first time, the school could offer its students an education that fed and inspired their young minds.
Over the past few days, there's been a lot of discussion about how much tax Australian companies pay and whether big firms are paying their fair share. This video from United Voice and the Tax Justice Network gives a great rundown of the facts and figures behind that debate:
Multinational tax avoidance continues to be a hot topic of discussion across Australia, and this morning I joined John Stanley and Garry Linell on 2UE Mornings to talk about how we can tackle this challenge. Here's the transcript:
WEDNESDAY, 1 OCTOBER 2014
SUBJECT/S: Joe Hockey dragging his feet on multinational profit-shifting; New Senate inquiry
JOHN STANLEY: This is the question that we have been talking about for quite some time. This question of tax and the capacity of the Australian government to get some of these companies, particularly these big companies like Apple and Google to pay their tax.
GARRY LINELL: So we’ve got the big G2O meeting in Brisbane coming up later this year and the Abbott Government has pledged to tackle the issue there. But there are now even more concerns that the Australian tax office is ill equipped to deal with the problems. I mean if you look at the money that’s going missing, it could actually solve all of our budget deficits. Now they are currently in the process of axing about three thousand jobs at the Australian tax office, including most of the international tax experts. Now many of these experts are being poached to work for the big four accounting firms.
STANLEY: Can we just get this straight. We’ve got people, thousands of them who have been trained at public expense in our universities, they’ve gone into the public service, they’ve become tax experts, they work in the tax office, they’re laid off and then they go and work for the big companies that are helping these big international firms avoid their tax.
LINELL: But the best ones are being poached anyway, long before they are being laid off. They are being picked up by both the major companies who want to know how to minimise their tax and the big accounting firms.
STANLEY: Dr Andrew Leigh is the shadow assistant treasurer and he is one the line with us now.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Morning John, morning Gary.
The Tax Justice Network and United Voice has just released new research showing many companies in the ASX 200 have an effective tax rate well below the Australian standard. I joined Jonathan Green on Radio National's Drive program to talk about how we can ensure that companies pay their fair share of tax. Here's the transcript:
RADIO NATIONAL DRIVE
MONDAY, 29 SEPTEMBER 2014
SUBJECT/S: multinational profit shifting; corporate tax avoidance
JONATHAN GREEN: This may not come as a shock, but it seems that some of our biggest companies are paying the least amount of tax. The latest evidence comes in a report from the Tax Justice Network, and it’s a report supported by the United Voice union. Dr Andrew Leigh is the Shadow Assistant Treasurer and he joins me now, Dr Leigh – welcome.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Jonathan.
GREEN: We all know that businesses try to minimise their tax, but this survey suggests that one third of top Australian companies pay less than 10 per cent. Is that extent a surprise?
LEIGH: Certainly there is a challenge with what's known as multinational profit shifting which a lot of developed countries are facing at the moment. It arises because increasingly a lot of production is being globalised and we're increasingly becoming a service economy. So it's easier for accountants to move the nominal country in which production takes place around to a low tax jurisdiction. A lot of countries are now working out how they can crack down on multinational profit shifting.
GREEN: So do we have particular vulnerabilities?
LEIGH: Australia – as a small, open economy – is particularly vulnerable to this. One of the things that Labor did last year, in our final year in office, was for Wayne Swan and David Bradbury to sit down and put together a multi-billion dollar package of measures to crack down on multinational profit shifting. What was disappointing to me was that when the Coalition came to office, they didn't say 'well, what's the next thing we can do beyond this?' Instead, they began to wind it back. So they shrunk the size of that package by $1 billion, effectively losing $1 billion of revenue which went back to multinationals in the form of extra tax breaks.