19 March 2015
Since coming to office, the Abbott government has given $1.1 billion of tax breaks back to multinationals while cutting family payments for low- and middle-income households and cutting the wages of the cleaners who clean their offices. With so much recent speculation and concern about how much tax big companies really pay, there is a need for hard numbers to better inform the public debate.
At present there is simply no way to find out how much tax the largest companies pay or easily compare the reporting of publicly listed ones. A Senate inquiry into corporate tax avoidance has underlined the need for greater tax transparency in Australia. A third of the submissions to that inquiry backed the public release of more information on how much tax companies really pay. A majority of those submissions raised concerns about the availability and accuracy of corporate tax data. It is clear that the Abbott government needs to act to improve tax transparency.
The first step is an easy one. Labor has already provided a clear path to a more informed debate on multinational tax avoidance. Under new transparency rules introduced by Labor in 2013, the Australian Taxation Office is required to start publishing this data from the 2013-14 financial year. Labor has been working to bring forward the release of this data, giving Australians access to more information than ever before about the tax affairs of major companies. If the House were to pass my private member's bill, our plan would bring forward the release of data about the tax paid by companies with total income over $100 million.
We need an evidence-based debate on multinational tax avoidance, and we need it now. The choice for the Abbott government is clear: if it wants to support this informed debate, it will support Labor's plan to increase transparency.
Sadly, it appears that an informed debate is not part of the government's plans. Leaks coming out of the Liberal party room confirm the government is gearing up to dump Labor's plan to let Australians see how much tax big multinationals pay. The Assistant Treasurer has reportedly announced to his colleagues that he is working on plans to roll back the transparency laws and bring up the secrecy shutters. This would be yet another example of the Abbott government siding with the big end of town against the interests of the Australian community.
In government, Wayne Swan and David Bradbury put together a significant package to tackle multinational tax avoidance. In opposition, Labor has proposed a crackdown on multinational tax avoidance, improving the budget bottom line by an extra $1.9 billion through a package developed, based on OECD advice and costed by the Parliamentary Budget Office, which tackles things such as debt shifting, information exchange and providing the tax office with the resources it needs.
Instead of supporting this crackdown, the Liberals have reopened a billion dollars of tax loopholes. In MYEFO 2013, they promised a targeted anti-avoidance provision. In MYEFO 2014, they broke that promise. Now, by rolling back these transparency laws, they plan to further shield big multinationals from public scrutiny. Without transparent tax reporting, it will be easier for some big firms to continue to avoid paying their fair share of tax.
The Liberal Party has tried to block better transparency on the tax affairs of big multinationals since the day Labor first proposed it. Not content with voting against the transparency laws and dragging their feet on implementing them for 18 months, the Abbott government is now working to actively undermine them. The Treasurer and the Prime Minister are full of big talk about cracking down on tax avoidance, but when it counts in the party room and in the parliament, their government constantly lets multinational tax avoiders off the hook. When public reports come out about companies paying too little tax they question the accuracy of the figures; but when Labor suggests the tax office might report accurate data, they oppose it.
We currently have a bill before parliament to increase tax transparency, but the Liberals oppose it. Australians can judge for themselves which party is really committed to making sure multinationals pay their fair share. Inequality is at a 75-year high. Over the last generation the top one per cent share has doubled and the top 0.1 per cent share has tripled. Earnings have risen three times as fast for the top 10 as for the bottom 10. The wealthiest three people in Australia now have more wealth than the poorest one million. Just once I would like to see this government stand up for the little guy instead of for the top end of town.