6PR MONEYNEWS WITH KARALEE KATSAMBANIS
MONDAY, 23 OCTOBER 2023
SUBJECTS: ATO’s Multinational Tax Avoidance taskforce; benefits of competition policy in assisting small businesses and the Royal Australian Mint's recent win at the Mint Directors Conference in Canada.
KARALEE KATSAMBANIS (HOST): I'm always delighted to catch up with this gentleman, the Honourable Dr Andrew Leigh, who is Assistant Minister for Competition, Charities and Treasury and Employment. Good evening, Dr Leigh.
ASSISTANT MINISTER FOR CHARITIES, COMPETITION, TREASURY AND EMPLOYMENT ANDREW LEIGH: Good evening, Karalee, great to be with you.
KATSAMBANIS: Well it's lovely to be with you too, and I thought we'd do a bit of a round-up this evening because there's a lot of things happening, you're in charge of a lot of portfolios and you're always very accessible here for our West Australian listeners and to tell us what's going on.
So I thought we'd sort of kick off with one of the things that is one of your babies I should say, but what's been happening with the multinational tax amendments and the things that are going on there and the various measures that are being progressed by the Government?
LEIGH: Well thanks, Karalee. Multinational tax is obviously a really important area because fundamentally when multinationals don't pay their fair share, Australians have to pay more.
What we've seen this week is an announcement that the Tax Avoidance Task Force, which is a crack task force in Treasury that makes sure that multinationals are doing the right thing, has garnered over $6 billion for the national coffers in their engagement with large multinational firms. That $6 billion is significantly more than it costs to run the task force, making this possibly one of the best investments that the Federal Government makes.
We're also, though, making sure that the laws are up to date. There's been loopholes that multinationals have driven a truck through and that's meant that they're not paying their fair share. So we're cracking down on debt deduction loopholes, which basically is where a firm sets up in an offshore low tax jurisdiction, loans money to the Australian company and so they can use the interest payments as a deduction. We've put a stop to that lurk. We want to make sure that these big firms aren't taking advantage of tax dodges that wouldn't be available to a small business in Western Australia.
KATSAMBANIS: And, Dr Leigh, I guess it's also important to say that it's important to remind our listeners that, you know, when the global multinationals exploit these loopholes to pay less tax they're gaining an unfair advantage over local businesses, and I wanted to actually now just sort of segue into something that is important but, you know, small business in Western Australia as well. I believe there's 234,971 West Australian small businesses and we know that we're very proud over here of the great job that our small businesses do in regards helping to build the nation.
LEIGH: Absolutely. You've got over 200,000 small businesses in Western Australia, 18 per cent of those in construction, 13 per cent professional services, other big areas are real estate and agriculture. Those small businesses, many of them employ workers, they're engaged with the local community, and we want to see them grow and thrive.
Troublingly though, if you look at surveys over time, small business founders have tended to be getting older and older, faster than the population is aging. So that suggests that there might be a challenge facing Australia in terms of getting these young whippersnapper start-ups. Now, you have a few examples of those; the Atlassian or Canva or Kogan founders, but fewer than we had a generation ago.
KATSAMBANIS: So I wanted to say, Dr Leigh, and as I said, and everybody, we're speaking with the wonderful Honourable Dr Andrew Leigh who is Assistant Minister For Competition, Charities, Treasury and Employment here on Money News this evening.
You wrote a really good opinion piece on why competition policy is important for helping people start their own businesses, and there have been many, many West Australian success stories. Can you elaborate a little bit for our listeners as to why it is, you know, why it's becoming rarer and rarer and why it's important for people to have the ability to start, you know, to start their own businesses?
LEIGH: Well new businesses are a bit like saplings in a forest. If you don't have new trees emerging then the forest ultimately gets old and starts to rot. We need more new businesses coming up in order to challenge existing firms, but also to offer new products into the market. That sort of innovation and dynamism comes from the creation of new firms and the ability of those new firms, Karalee, to get the workers that they need. But things like-non compete clauses that make it harder for one in five Australian workers to move to a better paying job are potentially impeding the growth of firms.
So that's why Jim Chalmers and I have set up the Competition Taskforce within Treasury, looking at practical ways in which we can get more competition into the Australian economy. Good for small business, great for the economy.
KATSAMBANIS: And in the recent budget, as I said, you know, the Federal Government, you're backing small business, providing around a million small businesses with that direct energy bill relief, and you're also putting in place the small business energy incentive to help those businesses with annual turnovers of less than $50 million to save on their energy bills. What other things are you doing to make it easier for small business in Australia and here in Western Australia?
LEIGH: We've got the instant asset write-off, a $20,000 instant asset write-off for firms with turnover under $10 million. As you've mentioned, the energy incentive, and we're also focused on how small businesses can benefit through this competition reform.
You know, you look back to the Hilmer reform process of the 1990s, that delivered some $5,000 a year into the pockets of the typical Australian household. So there's big benefits to be had from more competition.
I think economists now are recognising that the Australian economy isn't as competitive as it could be. We've seen a rise in market concentration, an increase in mark-ups, that decline in job switching that I mentioned before. All of those suggest that economic dynamism might have fallen in Australia.
The Parliamentary Committee chaired by Daniel Mulino, which is looking into this, alongside the Competition Taskforce, it really is a big challenge for Australia, how to become more competitive and therefore more productive.
KATSAMBANIS: I don't want to sort of labour on this point, Dr Leigh, but one of our listeners has texted in and we've had a few texts like this as well, but we know the result of the recent Voice Referendum that was, you know, more than $400 million spent on the referendum and a lot of people, a lot of taxpayers are angry. We're already getting some texts through saying that that money could have been used to help small business or it could have gone to direct help for the people that really actually need it. What do you say to that?
LEIGH: I can understand people having a range of different views, but we as a Government we took the Uluru Statement from the Heart, the united statement from a whole range of First Nations leaders in 2017 and we put that to the Australian people.
This was a statement from First Nations people in the largest gathering of its kind. I think it would have been unwise for the Australian Government simply to have fobbed it off, to not have taken that question to the Australian people.
Needless to say we respect the view of the Australian people. I don't think Australians have said no to reconciliation or to closing the gap. But they have said no to this particular constitutional change. So we'll move on. We'll look to consult, we'll look to engage, and of course we look to close the gaps which I know matters to all of your listeners.
KATSAMBANIS: And look, we'll just end this evening on a brighter note, but the Royal Australian Mint, it's won an award, another one.
LEIGH: It has indeed. For its Honey Bee coin. So this is a remarkable little coin out there in circulation. The Honey Bee coin has managed to win yet another award, this time at the Mint Director's Awards which were announced in Canada. It's a coin that's created quite a buzz in the international community. A sweet little coin. I encourage your listeners to get their hands on one.
KATSAMBANIS: You're doing mental gymnastics with me at this time of night so I will say it has been very sweet to talk to you, Dr Leigh, and I hope I haven't stung you too much this evening.
LEIGH: Love it! Thank you Karalee.