Andrew Leigh

Tax privacy for the uber-rich

12 November 2015

'Protecting tax privacy for the uber-rich is a strange thing to take a stand on.' I wish I could claim credit for those words, but that is the title of Lenore Taylor's summary in The Guardian of the events of today. Rather than agree to getting its own multinational tax bill through the parliament, today has seen the government prefer to put the House in opposition to the Senate.

The government's multinational tax bill is a bill about which Labor has always been somewhat sceptical. After all, when one looks at the budget papers, where revenue estimates should be you only see a series of asterisks. But we have supported the government's multinational tax efforts on the basis that bipartisan activity in this area ought to be encouraged. In the same spirit, we would encourage the government to look at Labor's $7.2 billion plan for closing debt deduction loopholes.

Today, rather than seeing its own multinational tax package go into law, the government has chosen to stamp its foot and put the House in opposition to the Senate. It has done that over the issue of tax transparency. Tax transparency has a strong history in this place. In 2013 Labor put in place laws which would see the Australian Taxation Office report the total income, taxable income and tax paid of all companies with revenue over $100 million. The Australian Taxation Office said at the time that this would 'discourage large corporate entities from engaging in aggressive tax avoidance practices'.

The coalition since then has waged a guerrilla war against transparency, in favour of secrecy. Then Assistant Treasurer Josh Frydenberg told the coalition party room of a real concern that wealthy business people would be kidnapped as a result of these laws, leading University of New South Wales accounting lecturer Jeffrey Knapp to call this the 'stupidest excuse for non-disclosure I've ever heard'. We asked whether the government had sought security advice to verify a kidnap risk, and it turned out that no advice had been provided by the Federal Police, the Attorney-General's Department or the Australian Taxation Office. Labor then asked the government what representations had been received by the offices of the then Treasurer and Assistant Treasurer, and we were told that zero representations had been received favouring a wind back of tax transparency.

When the issue came to the Senate, a submission was received from an organisation known as the Family Office Institute Australia, an organisation which purported to be representative, but in fact it now emerges that it has no members. This practice, known as 'astroturfing' in the United States, has embarrassed the Senate. Senators have acknowledged that they probably should not have accepted a submission from an organisation which has no members.

Labor has been consistently on the side of transparency. I moved a private member's bill in this House calling for tax transparency to start a year ahead of schedule—to start based on the 2012-13 tax data rather than on the 2013-14 tax data. If we are going to have a debate about tax fairness in this country, let us see how much tax is being paid by large firms rather than simply slugging the bottom end of the income distribution. Instead, we have not only seen the Treasurer refuse to accept the Senate amendments to the government's multinational tax bill but we have now also seen him attack the crossbench. In this place the Treasurer said:

… the Senate, on the run and at the last minute, has sought to dramatically amend this bill and to include a raft of peripheral additions.

   …   …   …

This is a very shabby process that cannot be supported and should not be encouraged.

   …   …   …

This is the type of cynical, old politics that Australians are sick of.

That is the Treasurer speaking about the crossbench. The 'raft of peripheral additions' to which he refers is less than a page of amendments. The 'shabby process' to which he refers is democracy itself. It is the crossbench recognising that tax transparency is in the interests of all Australians.

I pay tribute to the work done by Senators Dastyari, Xenophon and Whish-Wilson in bringing together a set of reasonable amendments which allow a claim to be made to the tax office of commercial confidentiality but ensure that large companies—public and private—are within the transparency net.