Andrew Leigh

LABOR’S TRANSPARENCY LAWS REVEAL THAT ONE IN THREE BIG COMPANIES PAY NO TAX

Data issued by the Australian Taxation Office today showed that 722 out of the 2109 companies examined failed to pay any tax the 2016-17 tax year. The companies that paid no tax include 100 firms reporting more than $1 billion in total income.

The only reason we know that one-third of large companies failed to pay any tax is because of Labor’s tax transparency laws, which passed the Parliament in 2013 amid objections from the Coalition. This is the same Coalition which voted against Labor’s 2012 tax laws, which were directly responsible for BHP being forced to pay a $529 million tax bill 24 days ago.

The Abbott-Turnbull-Morrison Government has failed to make our tax system fairer. While a Shorten Labor Government would crack down on multinational tax avoidance, Scott Morrison’s one-point economic plan has been an unaffordable tax cut for multinationals and big banks.

While Labor has a multinational tax plan raising nearly $5 billion by closing loopholes and curtailing tax havens, the Coalition has managed to double net debt since coming to office.

If the Coalition is re-elected next year, Australians should have no doubt that they will again try to cut company tax rates for large firms. As Scott Morrison said less than six months ago:

We're fully pursuing our Enterprise Tax Plan. Nothing's changed on that. We remain committed to this. We don't flip and flop on these things. We know what we believe is right for the economy. We took this to an election. I put it in the 2016 Budget and we went to an election and I stood everywhere from Burnie to Townsville and over in the West and said, "This is what's right for the Australian economy."

Labor will continue to lead the debate on multinational tax avoidance and cracking down on tax havens. If the Coalition was serious about tax fairness, it would adopt Labor’s plan to:

• Tighten debt-deduction loopholes used by multinational companies, improving the Budget by $3 billion over the medium term.
• Cap deductions for managing tax affairs at $3,000.
• Close a debt deduction loophole to ensure consistent treatment in related party financing arrangements.
• Automatically deny deductions from companies for travel to and from tax havens.
• Increase penalties for individuals and entities promoting tax evasion and avoidance.
• Crack down on citizenship shopping by requiring all individual Australian taxpayers to notify and declare to the Australian Taxation Office if they have residency or citizenship of any other jurisdiction and the name of that jurisdiction.
• Introduce public reporting of country-by-country reports, ensuring the release of high-level tax information about where and how much tax was paid by large corporations (over $1 billion in global revenue).
• Provide protection for whistleblowers who report on entities evading tax to the Australian Taxation Office and, where whistleblowers’ information results in more tax being paid, allow them to collect a share of the tax penalty (a reward of up to $250,000).
• Introduce a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts, allowing the public to find out who really owns our firms. 
• Introduce mandatory shareholder reporting of tax haven exposure, requiring companies to disclose to shareholders as a ‘Material Tax Risk’ if the company is doing business in a tax haven.
• Appoint a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes.
• Introduce public reporting of Australian Transaction Reports and Analysis Centre (AUSTRAC) data and require the annual public release of international cash flow data.
• Require all firms tendering for Australian Government contracts worth more than $200,000 to state their country of domicile for tax purposes.
• Develop guidelines for tax haven investment by superannuation funds. 
• Require that the Australian Taxation Office’s annual report provide information on the number and size of tax settlements.
• Restore Labor’s $100 million threshold for public reporting of tax data for private companies, which was raised to $200 million by the Liberals and Greens in a move which exempted two-thirds of private firms from tax transparency

Australians don’t want the world’s biggest tax loopholes, they want the world’s best schools and hospitals.

ENDS

Authorised by Noah Carroll, ALP, Canberra.