What did we learn at the tax inquiry? - Richo with Janine Perrett

E&OE TRANSCRIPT

TV INTERVIEW

RICHO WITH JANINE PERRETT

WEDNESDAY, 8 MARCH 2015

SUBJECT/S: Senate corporate tax inquiry; multinational profit shifting; ‘Australia tax’ on downloads

JANINE PERRETT: So what did we learn from today's [corporate tax] committee hearings? To discuss these issues I caught up earlier with Shadow Assistant Treasurer Andrew Leigh. Andrew, it was billed as a very big day at the tax inquiry, there was a lot of noise but I don't think it lived up to the great Kerry Packer one. What was the highlight for you today?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Janine, I think we learned a good deal about the ways in which various multinationals are going about minimising their tax. The use of marketing hubs, the parking of profits offshore, and the use of debt shifting instruments in order to move profits from higher tax jurisdictions to low or no-tax jurisdictions. All of that points to the broad picture that Labor has been talking about for some time now… 

PERRETT: That's the point isn't it, you have been talking about it for some time. That's my point - did we actually learn anything today? Because even reading Michael West's excellent pieces in the Sydney Morning Herald, I've known about the shifting, the hubs; what was new that we actually learned under the guise of the much-heralded Senate inquiry?

LEIGH: Well I think for the aficionados, it was fleshing out much of what we'd been aware of already. But for many Australians the issue of multinational tax fairness is increasingly becoming important. Many Australians are saying: why is it fair that Joe Hockey and Tony Abbott give $1 billion back to multinationals while cutting the wages of the cleaners who clean their offices, and while cutting funding to the states for schools and hospitals? 

PERRETT: To be fair, they aren't the first government - I've been doing this for 35 years and governments of all stripes have known this kind of thing goes on, it happens everywhere. I know Labor has been making a lot of noise on it recently but a lot of the things alleged today can't just be blamed on this current government. 

LEIGH: This is a problem that crosses governments and which is naturally a global challenge. But you've got to compare the track records on this, Janine. When Labor was in government, Wayne Swan and David Bradbury put together a multi-billion dollar package to tackle multinational tax avoidance. Since coming to office, the Abbott Government has handed $1 billion back to multinationals. Now Labor, from opposition, has come forward with a carefully-costed plan to raise the tax on multinationals by $2 billion and the Government is again saying no. Labor has done the hard work of engaging with the OECD, getting the package costed through the Parliamentary Budget Office, and if Joe Hockey wants to reduce the deficit rather than increasing it as he's been doing recently, then he could do worse than to put our package into Parliament and have us vote for it.

PERRETT: Yet a number of the academics who gave evidence today and didn't get as much publicity warned that there's a lot of hype in all this and a lot of overblown figures being bandied around, but there's not really a huge pot of gold at the end. I mean, you can pick up numbers on what you might make, but it might not be that much.

LEIGH: Well that's what the experts have told us it is going to be, Janine. We have the Parliamentary Budget Office in order to cost policies, and Labor's plan is grounded in work that the OECD themselves have done. There's no consistent position that's been taken towards debt deductions around the world, and so it's one of those areas where Australia can move immediately to close loopholes. Naturally there's a longer-term agenda too…

PERRETT: Much of the debate today though concentrated on the issue of secrecy and the number of companies that are using Singapore as a hub, as a place to avoid tax is the theory. The Tax Commissioner said it is not helpful to name them, that everyone deserves confidentiality. Joe Hockey has backed him up, but it has also been noted in articles that previous Labor Governments have stood by this. Now, I know the Greens are pushing to name and shame, so does Sam Dastyari appear to be. Is that what this is all about? Do you want to go down the name-and-shame-corporations route? 

LEIGH: I think it is important, Janine, to have a sense as to who is paying what. That's why Labor in government put in place a law that would require, from the end of this year, the reporting of taxable income, total income and tax paid for companies that turn over more than $100 million a year. Again the Coalition is standing on the side of shutting down that transparency. They'd like to see us wind back transparency, but I'd like to see it wound forward. I put a Private Members Bill into the House that would have that tax transparency moved forward by a year so that the information could flow immediately. Because you can't on the one hand say that when a group like the Tax Justice Network puts forward figures, that those figures aren't precise, and then on the other hand say: well, we're going to oppose the accurate figures being put into the public domain. So I do think we need to get tax transparency going sooner.

PERRETT: Do you think there could be some payback here on the mining tax? Because it seems that at least one of the companies is a major energy company - given all the hysteria that surrounded the mining tax and what tax was paid, do you think it might turn out to put that whole debate in a different light and show a different hue on that?

LEIGH: No I don't think so. Some people have certainly asked whether this is sectorally-specific but I don't see this as being about any particular sector, whether it is manufacturing, high-tech or mining. It's really just about getting a level playing field. At the moment there are loopholes that these multinationals can access that aren't available to a mum and dad corner store, and that doesn't seem fair to me.

PERRETT: Ok, News Corp was one of the companies that spoke today. I alluded to the famous 1991 appearance by Kerry Packer, this time it was Rupert Murdoch's Australian operation. There has been a story in the Fairfax papers this week, but do you really think a Labor Government will take on the might of News Corp?

LEIGH: Again Janine, this isn't about taking on particular firms or taking on particular industries. It's just about a level playing field. If your ultimate agenda is to cut the corporate tax rate, which many economists believe is good for investment, then you can't support a system that is riddled with unfair loopholes. You've got to broaden the base if you're going to lower the rate. This is a pro-business measure that Labor has put forward, because we don't believe that James the Plumber ought to be paying a higher rate of tax than James Hardie.

PERRETT: Just finally, what did you think of Chris Jordan – the ATO Chief – of his performance today? Do you have confidence in him, do you think he's tough enough for this job?

LEIGH: I think that Chris Jordan is a strong servant of the public. Clearly Labor members will have their differences with particular aspects of the way in which he's doing his job, but it did strike me that the Labor-initiated program to tackle multinational profit shifting and to give the ATO more enforcement powers is yielding substantial dividends.

PERRETT: Just on another matter, because we're running out of time – we've seen business lobby groups banding together this week and putting pressure on the government over budget reform. This prompted Scott Morrison to say: why don't you take a look at the other lot, and where were you when we needed your help? But even some within Labor are saying that business seems to be abdicating a lot at the moment, even though it is to your advantage, there is a lot of blaming governments when things go wrong but wanting them out when things are alright. Do you think business groups have a point, or do you think they should probably just get on with it themselves? 

LEIGH: Janine, I think the big point that Catherine Livingstone was making is that when you're focusing on long-term economic challenges for the nation, not all of that can be done through the Expenditure Review Committee process. I'm a fan of the ERC as a way of getting rigor into spending and taxing decisions, but I do think that there's big economic challenges for Australia such as innovation, climate change, inequality, engagement with Asia, and one of my real criticisms of this Government is that they've taken their eye of the ball on those things. Not only have they failed to meet their own test on debt, but they've failed to deal with some of these seismic challenges for Australia in the decades ahead.

PERRETT: Ok, final question: your colleague Ed Husic has just come out and slammed film and music groups over that decision yesterday about illegal downloading. He's claiming they've been ripping off Australian consumers for years and they're hypocrites – what do you say to that?

LEIGH: Ed has done very important work looking at what’s referred to as the 'Australia tax' – the differential costing of downloaded products for Australians compared to people in the United States. I think that is really important work and it has troubled me that again, there hasn't been enough action on this from the current government. So many Australians enjoy downloading apps and song and iTunes and they don't see any reason why they ought to be paying more because they're an Aussie rather than an American. 

PERRETT: Andrew Leigh, thanks for your time tonight.

LEIGH: Thank you, Janine. 

ENDS

MEDIA CONTACT: JENNIFER RAYNER 0428 214 856


Be the first to comment

Please check your e-mail for a link to activate your account.

Stay in touch

Subscribe to our monthly newsletter

Search



8/1 Torrens Street, Braddon ACT 2612 | 02 6247 4396 | Andrew.Leigh.MP@aph.gov.au