ABC Radio Brisbane Mornings with Steve Austin - 4 July 2024


SUBJECTS:  Making multinational pay their fair share, Greens joining Coalition to oppose two-state solution, Senate Economics Committee on ASIC.

STEVE AUSTIN, HOST: No one likes paying tax, but also things that we hate more is when multinational companies avoid paying tax when they make money in this country. But then say, yes, our business is in Australia, but our head office is in, I don't know, the Cayman Islands or the Jersey Islands, so we don't have to pay you tax. Well, as you know, for many years there's been pressure on both sides of politics federally to do something about it. Now Federal Labor apparently has. You can make money in Australia and avoid having to pay your share. But Andrew Leigh is Labor's Assistant Minister for Competition, Charities, Treasury and Employment. Andrew Leigh, good morning to you. How big is the problem of multinational companies avoiding tax in this country?

ASSISTANT MINISTER ANDREW LEIGH: Good morning, Steve, and good morning to your listeners. It's a serious issue. We now have numbers suggesting that about two-fifths of multinational profits pass through low-tax or no-tax jurisdictions. So, that means globally, hundreds of billions of dollars are being funnelled through these places. And these so-called ‘Treasure Islands’ are part of what's been eroding the global tax base at a corporate level for many decades. That's why more than 100 countries around the world got together in a global agreement to say, we're going to put a floor on company tax, a 15 per cent floor. And if countries weren't charging 15 per cent, then other countries could levy top-up taxes. Today I'm introducing into Parliament legislation that will see Australia enact that measure, allow us to claim top-up taxes where other jurisdictions aren't pulling their weight.

AUSTIN: Explain to me how that works. How will it be that this legislation you're introducing today will guarantee that you're capturing a percentage of this money that multinational companies are currently able to avoid? Physically, how do you do that?

LEIGH: Well, we're asking for global returns, and if those global returns show that there's jurisdictions where they're not paying an effective rate of 15 per cent, then other jurisdictions are able to claim a share of that. One of the things about this agreement, Steve, is it's got an inbuilt incentive for countries to adopt early. So, we're part of around 60 countries that are moving to adopt in the early timetable. It really matters for Australia. Our corporate tax base is an important share of revenue for Australia. That's how we fund schools, hospitals, roads and the like. So, we've got to make sure that we stop this global race to the bottom on company tax. We've got to get multinationals paying their fair share. We welcome the investment from multinationals into the Australian economy. We welcome the jobs and prosperity it generates, but it's no licence to avoid paying tax.

AUSTIN: Which companies are the worst avoiders of tax globally, Andrew Leigh?

LEIGH: Well, there's been a lot of accounts in the media over time. Apple turned out to be stateless for tax purposes, in evidence that it gave to a US congressional committee a couple of years back.

AUSTIN: All of the big media companies, aren't they? Alphabet that owns Google, Apple, Meta and the like.

LEIGH: Yep, certainly a variety of those tech companies were using tricks like the Double Irish Dutch sandwich, in which you move revenue forwards and backwards and ultimately end up not paying it. And we've seen even our own mining companies sometimes looking to use so-called marketing hubs in Singapore, a practice that's been shut down by the tax office with around $1 billion returned to the Budget bottom line.

AUSTIN: Who was doing that? Name the Australian companies, mining companies that were doing that, Andrew Leigh?

LEIGH: Well, BHP and Rio both acknowledged that they'd made settlements with the tax office, which not only saw them paying back taxes but also committing not to using those Singaporean marketing hubs. So, we've got to keep on updating the laws, Steve. We passed another multinational national tax integrity bill through Parliament earlier this year. I'm now introducing a new one to Parliament. We've got transparency measures that implement country-by-country reporting. We've got obligations on firms that want to get government tenders in Australia, that they disclose their country of tax domicile, and that for public companies, they tell their shareholders where their countries of tax domicile are. Transparency, integrity; it's all about making sure multinationals pay their fair share. Because when multinationals don't pay their fair share, individuals and small businesses have to pay more.

AUSTIN: This is 612 ABC Brisbane. My guest is Andrew Leigh. Andrew Leigh is Federal Labor's Assistant Minister for Competition, Charities, Treasury and Employment. Andrew Leigh, I'm assuming that the Greens will support this when it goes through Parliament because they've been talking about this as well. What about the Opposition? Has the Opposition indicated they'll support this in Canberra?

LEIGH: Well, I'd hope that all parliamentarians would support it, but, Steve, you can never be quite sure. We were in a vote in Parliament last night in which the Liberals and the Greens voted together against a motion for a two-state solution peace process in Palestine and that really surprised me. We've seen a little bit of that going on lately in other economic areas as well. So, Parliament is unpredictable, but I can't see why any parliamentarian of integrity wouldn't want multinationals to pay their fair share.

AUSTIN: Sorry, can you clarify? The Greens voted against a government call for two-state solution in Palestine. Did I hear you correctly?

LEIGH: The motion that was moved in Parliament was supportive of a two-state solution as part of a peace process and the Greens and Liberals -

AUSTIN: And the Greens voted against it?

LEIGH: The Greens and the Liberals voted against it, it was a remarkable vote.

AUSTIN: They've been calling for it. They've been calling for it.

LEIGH: It's up to them to explain their position there. But it was very strange to have Labor on the side of voting for a motion which is recognising a Palestinian state as part of an enduring peace and two-state solution and the Liberals and the Greens voting no.

AUSTIN: All right, other stories around Andrew Leigh, while I've got you, the Senate Economics Committee has found that Australia's corporate regulator, ASIC, is under-enforcing corporate law in Australia. They've made a number of recommendations after 200 submissions were made to the committee. Now, government members on your side seem to diminish some of those recommendations. But does the Federal Government think that ASIC is performing adequately in Australia, Andrew Leigh?

LEIGH: Well, we need to make sure that ASIC's stepping up and doing its job. Steve -

AUSTIN: And are they?

LEIGH: They can do better, as can all regulators. The proposal to break them up though, was considered and rejected by the Hayne Royal Commission on the basis that having a regulator that's looking at financial issues as well as corporate issues is able to do better intelligence sharing and therefore is potentially better able to track down misconduct. We've given ASIC additional funding, around $380 million of additional funding since we came to office. Obviously, we'll carefully consider this report. I mean, I can understand the disquiet of some of the other members of Senator Bragg's committee, given that he only gave them the draft report 24 hours before its public release.

AUSTIN: That did seem unreasonable. Yet government members in the dissenting report did acknowledge that there were some ongoing issues of concern with ASIC. The report recommended creating financial rewards for whistleblowers who reported bad corporate behaviour similar to what's in place in the United States. Is the Government of a mind to do something like that?

LEIGH: Look, those qui tam laws have worked well in the United States and in the United Kingdom where they exist. We'll certainly look carefully at those recommendations along with the others. We're aware that ASIC has cooperated with the inquiry. It's responded to some 400 questions on notice, appeared at three hearings, made six submissions to the inquiry. So, it is engaged. But it recognises that, like all regulators, it can do a better job.

AUSTIN: Andrew Leigh, thanks for your time. My apologies. When does the legislation to capture this multinational tax avoidance. When does it physically get introduced into Federal Parliament?

LEIGH: In about 15 minutes time.

AUSTIN: There you go. Thanks for your time.

LEIGH: Keep me talking and I'll be in terrible trouble!

AUSTIN: Thank you very much.

LEIGH: Thanks, Steve.

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  • Andrew Leigh
    published this page in What's New 2024-07-04 15:27:22 +1000

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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.