Andrew Leigh

This weekend the Coalition will again schlep off to the G20 summit without a strong plan for confronting the global epidemic of tax avoidance by multinational companies.

In the aftermath of the decision taken by the European Union against Apple’s international tax liabilities, as well as the revelations within the Panama Papers, now is the time for an effective Australian multinational tax strategy.

But on this critical budget problem, like so many others, Malcolm Turnbull and his government are compromised, in chaos and making it impossible for Australia to provide moral or legislative leadership.

Every year, the Abbott-Turnbull Government has grandly promised to tackle multinational tax loopholes. But every year those promises are broken, forgotten or abandoned.

This useful table demonstrates the difference between what the Abbott-Turnbull Government has promised on multinational tax reform, and what it has delivered: 

In contrast, making multinationals pay their fair share has always been a Labor agenda.

In the lead up to the election, Labor proposed to restore the $100 million threshold for reporting the tax paid by large private firms.

We also proposed closing debt deduction loopholes that allow multinationals to siphon money out of Australia by subjecting them to a worldwide gearing ratio. This means they can only deduct debt from their Australian operations up to the overall level of debt held by the multinational group

Malcom Turnbull has described Australia’s budget debt as our “great moral challenge.”

But there’s a bigger moral challenge: closing down tax havens, improving tax transparency, and making multinationals pay their fair share.