Malcolm's medium is Australia's XXXL, Business Spectator, 28 October
Calling a firm earning $100 million a year a “medium-sized company” is like describing Andre the Giant a featherweight. It’s so wrong as to be laughable.
Yet that is exactly how Prime Minister Malcolm Turnbull has described the companies his government chose to shield from Australia’s tax transparency laws.
In the last sitting fortnight the Turnbull Government rammed a bill through the Senate that gutted transparency rules put in place by Labor in 2013. Our laws required the Australian Tax Office to publish information about the income, taxable income and tax paid by companies earning more than $100 million. The first report was supposed to be published by the end of the year.
Mr Turnbull’s changes mean around 850 private companies are now exempt from having their information published. That means we won’t know how much tax huge companies like 7-Eleven pay, even after learning that they’ve been ripping off their workers for years.
In changing the law to help big companies keep their tax affairs secret, Malcolm Turnbull has used the power of the Parliament to protect the interests of Australia’s largest firms at the expense of our entire community.
But in defending this decision, he has also revealed himself to be completely out of touch with the reality of Australian businesses.
The latest figures from the Australian Bureau of Statistics show there are around 2.1 million businesses in Australia. Over half – some 1.3 million businesses – turn over less than $200,000 a year. Just six per cent earned more than $2 million a year.
Here’s the real kicker. Let’s try and find some of those “medium-sized companies” the Prime Minister mentioned – the ones earning over $100 million a year. They make up around 0.02 per cent of all Australian businesses. That means 4,999 out of every 5,000 businesses don’t make that much. If that’s where Prime Minister Turnbull thinks the middle is, he needs to spend more time with start-ups and less with structured investment vehicles.
Most Australian business owners know what it’s like to struggle with cash flow because an invoice has been paid late. They know about coming home from work and doing the books after dinner to save on accountant’s fees. They dream of one day making $1 million a year, with $100 million a far-off fantasy. That’s the reality for the vast majority of Australian businesses.
These business owners are rightly concerned that one in five of the companies now exempt from the transparency rules didn’t pay any tax at all last year. They’re also aware that the more opportunities there are for $100 million firms to shirk their taxes, the more their own businesses will end up having to pay.
It’s time the Prime Minister stops backing secrecy and loopholes, and starts standing up for transparency and tax fairness. The millions of Australian small and medium businesses that do the right thing and pay their taxes deserve nothing less.