Hockey must advance a crack down on global tax avoidance - Inside Canberra - 21 February

E-newsletter Inside Canberra has published my piece on the importance of reforming the international tax system. The context is the meeting of finance ministers and central bankers from the G20 grouping of nations gathering in Sydney. International tax avoidance is a key agenda item.

International tax rules are not keeping pace with changes in the digital age and the realities of doing business in our globalised world. Rapid and dramatic shifts in global economic activity, driven largely by e-commerce, pose very real and significant risks to Australia’s corporate tax base and the tax bases of countries right around the world.

Multinational companies can take advantage of slow-moving tax laws by shifting profits to low-tax countries. This is particularly true for digital companies that don’t sell physical goods. This has obvious implications for tax revenue: companies avoiding their fair share of tax mean higher taxes or reduced services for you and me. Equally important, however, is the disadvantage incurred by local businesses which lack either the savvy or the scale to implement these complex taxation avoidance schemes.

Local Australian digital media companies such as Mi9, together with the corporate heads of websites such as ninemsn, RAE and, have called for action on multinational profit-shifting ahead of this week’s G20 Finance Minister’s meeting. With the job losses that we’ve seen at Holden, Toyota and, this week, at Alcoa, it’s vital that Australian media companies are competing on a level playing field so that they can create the jobs of the future.

Since coming to office, the Abbott government has talked a big game on multinational profit-shifting. Unfortunately, all it’s done is water down Labor’s sensible reforms to ensure that multinationals pay their fair share.

On 14 December 2013, Assistant Treasurer Arthur Sinodinos announced that the government would abandon a $700 million measure to prevent multinational firms reducing their tax bill. On 4 January 2014, Senator Sinodinos announced that the government was considering abandoning measures that required 200 of Australia’s largest firms to disclose their total income, taxable income and tax paid. That’s hundreds of millions of dollars of tax revenue lost that could go towards Australian hospitals, schools and infrastructure.

The Abbott government must walk the talk. Labor advanced a fair agenda to combat tax avoidance and evasion. It’s up to Joe Hockey and Arthur Sinodinos to take up the baton left by Wayne Swan and David Bradbury so multinationals pay their fair share of tax. Until they do Australian households and businesses will have to take on a higher tax burden. This not only means less in the pockets of Australian taxpayers, but also fewer jobs in the innovative companies that represent the future of the Australian workforce.

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


Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.