Andrew Leigh

LABOR CONTINUES TO SHINE LIGHT ON THE DARK CORNERS OF MULTINATIONAL TAX

Making multinationals pay their fair share has always been a Labor agenda. In government, we closed loopholes and improved transparency, over the repeated objections of the Liberals.

From Opposition, we have led the debate, releasing strong policies to reduce excessive debt-loading and properly resource the tax office. The Government is still welcome to adopt our $7.2 billion package.

If elected to Government, Labor will introduce an additional comprehensive suite of new measures to increase transparency on the tax affairs of multinational corporations.

In Government, Labor will:

• Increase penalties for non-compliance with country-by-country reporting:

It is simply wrong that the current penalty for failing to file country-by-country reports is a mere $5400 – less than you get for streaking across the SCG. Labor will increase that penalty 50 times. Should a company continue non-compliance after the maximum fine is reached, the Commissioner of Taxation is empowered to conduct a broad review of the company’s tax affairs.

• Restore the $100 million threshold for reporting the tax affairs of large private firms bringing them back in line with public companies:

Labor’s original threshold was watered-down in a dirty deal between the Coalition and the Greens last year, with 600 companies being shielded from public scrutiny as a result.

• Obligation to disclose the beneficial ownership for Australian legal identities:

Labor will ensure that the G20 principles Australia committed to at the G20 summit in Brisbane in 2014, which are based on guidance from the Financial Action Task Force, are implemented fully and quickly to ensure that Australia cannot be used as a destination for money-laundering, tax evasion, terrorism financing or other criminal behaviour.

This will be achieved by establishing a publicly accessible central registry of the beneficial ownership of companies, trusts and other corporate structures.

AUSTRALIANS AREN’T BETTER OFF THAN AT THE LAST ELECTION

Are you better off than at the last election? If you answered no, you're in the majority. Living standards are lower today than they were in 2013.

Sure, we keep hearing about those 25 years of uninterrupted economic growth Australia will clock up this year. But what often gets ignored is that this is based on total national output – a measure called Gross Domestic Product. It isn't adjusted for population growth, money that gets paid to overseas shareholders, or the relative prices of exports to imports.

Each of these adjustments makes a difference, but the easiest one to get a handle on is the mistake of looking at total production rather than output per person. In recent years, Australia has had one of the fastest population growth rates in the advanced world. Looking only at the total is like measuring an exercise regime by adding up all the calories burned at your gym. When another person walks in the door, they raise the total, but that doesn't mean you're any healthier.

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

MONDAY, 18 APRIL 2016

SUBJECT/S: Recall of Parliament; ABCC; ASIC; Opinion polls

KIERAN GILBERT: On the program now Shadow Assistant Treasurer, Andrew Leigh. Good to see you. In terms of substance of why we are back for this special sitting today, the Government wants the Australian Building and Construction Commission legislation through or some would argue they don't want it through and they want to trigger for the double dissolution election. Either way, it's a special sitting. Does Labor really want to be fighting an election on this particular matter?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Well Kieran, it's a strange set up isn't it, stopping Parliament and starting it again. Your viewers will of course know that the precedent for this goes back to King Charles recalling the English Parliament in 1640 to raise money to declare war on the Scots. Lord Wentworth then recommended it to King Charles that this would be a great idea, it turned out kind of badly for him. I suspect that Malcolm Turnbull could be going down the same path.

LABOR CALLS ON GOVERNMENT TO ACT ON TAX AVOIDANCE

Leaders around the globe have stepped up efforts to crack down on international tax avoidance by large companies and high net worth individuals in the wake of the Panama Papers leak. 

Meanwhile, the Australian Government continues its lackadaisical approach to tax avoidance.

Australians are right to ask why Mr Turnbull and his Government are refusing to take meaningful action on tax avoidance. 

 

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC NEWSRADIO

FRIDAY, 15 APRIL 2016

SUBJECT/S: Scott Morrison’s sextupled budget deficit; economic management; entitlements for Queensland Nickel workers.

MARIUS BENSON: The Federal Treasurer Scott Morrison redirected the Government's budget direction yesterday when he briefly and critically declared that the government is planning some tax increases. At least that is the general reading the Treasurer indicated yesterday when he said this. Listen closely, it is quick.

MORRISON: Of course there will be revenue measures in the Budget.

BENSON: 'Of course there will be revenue measures in the budget', said Scott Morrison. I did say it was brief. On that basis however, and subsequent briefings from the Government, there are reports that the Government is set to curb tax breaks on superannuation for the wealthiest contributors, as well as increasing cigarette excise. For a Labor view on the Budget battle – the Budget just over two weeks away now, the first Morrison-Turnbull Budget - I'm joined by the Shadow Assistant Treasurer Andrew Leigh. Andrew Leigh, good morning!

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning, Marius.

BENSON: Labor's principal response to the latest words on the Budget seems to be a small amount of gloating saying “Look, they're doing we said we'd do”. 

LEIGH: It is just a gentle head-shake and a smile. Let's go back through all the trial balloons that has been floated since the Turnbull-Morrison team come to office. We had a 15% GST, dealing with bracket-creep as the great moral challenge of our age. We’ve had suggestions of state income tax rises and company tax cuts. When Labor in last November unveiled our policy around cigarette excise, Kelly O'Dwyer called it ‘another tax take’ and Susan Ley called it 'a grab for money'. Now they seem to be turning around and adopting this very same approach. 

BENSON: And presumably if they do go for the cigarette excise increase and the trimming of superannuation tax breaks they will enjoy the support of Labor.

LEIGH: Well let's wait and see what they do. You'd be a fool to support any particular balloon the Government floating on any day. Because rather than laying out a clear plan and backing-in their argument in the tradition of great economic reformers in Australia, the Government always seems to go for the cheap headline rather than go for the long game reform. We have got a fresh new team in the Treasurer's office preparing their first budget. A team in the Prime Minister’s office who are coming up again to their first election. It's almost like the Government has put the training wheels back on. 

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TV INTERVIEW

THE LATEST WITH LAURA JAYES

WEDNESDAY, 13 APRIL 2016

SUBJECT/S: Malcolm Turnbull’s deficit disaster and warped priorities; royal commission into the banking and finance sector; Road Safety Remuneration Tribunal.

LAURA JAYES, PRESENTER: I spoke to the Shadow Assistant Treasurer Andrew Leigh this afternoon, and began by asking him why now is no longer a good time to implement a company tax cut.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Laura, the cost of a company tax cut is very large. Over the course of a decade it would cost around $35 billion in order to cut the company tax rate for big business. Our view is that if that money is going to be met by cutting services or by borrowing more money, then it doesn't make a lot of sense.

JAYES: But this was Labor's policy and you do see that there is a growth dividend in cutting company tax, so why not look at that growth dividend now?

LEIGH: Labor always aspires to have tax rates as low as they can be in order to deliver the services we need. But right now, Laura, we have seen the deficit go up massively under this Government. The deficit for this year alone has gone from $5 billion to $37 billion, it has more than sextupled. So when the Government is blowing out debt, blowing out deficits, the idea that they should borrow more money in order to give a tax cut to some of Australia's biggest firms seems a little strange to me.

EVEN AFTER THE PANAMA PAPERS, MALCOLM TURNBULL IS SOFT ON TAX AVOIDANCE

Labor welcomes Tax Commissioner Chris Jordan’s involvement in helping a global effort to analyse data and launch prosecutions in the wake of the Panama Papers scandal.

The Australian Taxation Office is currently investigating 800 Australians identified in the Panama Papers. One in ten of those identified are on the Australian Crime Commission’s serious and organised crime database.

Whether it’s large companies operating throughout Australia being named, or an electrician in Perth emailing Mossack Fonseca to “reduce or zero my tax”, Australians begin to question the integrity and fairness of the tax system, and who it really benefits.

It is clear the Prime Minister and the Treasurer do not share these concerns.

Too busy shielding banks from the transparency and scrutiny of a Royal Commission, the Government has been nowhere to be seen on combating tax avoidance.

AUSTRALIANS WANT TAX FAIRNESS

Community members at last night’s Fairer Tax System Forum in Ingle Farm, SA, were unequivocal about the need for a fairer tax system.

Speaking at the forum, Shadow Assistant Treasurer Andrew Leigh and Member for Makin Tony Zappia warned of the risk to South Australians from the Abbott-Turnbull Government’s budget priorities.

So far, the Government remains soft on tax avoidance; hard on families and the schools and hospitals they rely on.

The growing sense of anger and frustration in the community is palpable, as the views expressed at the forum confirm.

Attendees noted the Prime Minister’s deafening silence on the Panama Papers, which have revealed the shocking lengths some companies and high net worth individuals will go to in order to avoid paying their fair share of tax.

OF MULTINATIONAL AGREEMENTS, BILATERAL DEALS, AND LOBSTERS, Australian Financial Review, 7 April

Growing up, one of my favourite television shows was Minder. Its lead character, dodgy salesman Arthur Daley, lived by the philosophy ‘You make contact with your customer. Understand their needs. And then flog them something they could well do without.’ Daley sold water-damaged umbrellas, dodgy cars, fake watches, and one-legged chickens (‘they're easier to catch’). He spent his life chasing ‘nice little earners’, and lived by the saying ‘the world is your lobster’.

I hadn’t thought much about Minder until I watched the Abbott-Turnbull Government claiming that its trade policy was the best in Australian history. As an economist, I’m a strong supporter of scrapping quotas and lowering tariffs. Alas, the Liberals measure success not in terms of cutting tariffs, but signing deals.

Just as anyone can sell a car in five minutes, anyone can sign a bilateral trade deal. The question isn’t whether the Trade Minister can get the handshake, it’s whether the agreement is in our national interest. And this is where things start to get murky.

When it comes to lowering trade barriers, economists agree that it’s better to strike worldwide agreements. As the Productivity Commission noted last year, ‘Well-founded unilateral reform based on most favoured nation and national treatment principles can afford larger and timelier economic gains than achievable through preferential deals.’

E&OE TRANSCRIPT

TV INTERVIEW

SKY AM AGENDA

WEDNESDAY, 6 APRIL 2016

SUBJECT/S: Land tax; ABCC; Company tax rates.

TOM CONNELL: In an area you are very familiar with as an economist. Land tax, increasing that, broadening that and putting it on the family home these sort of different issues to raise more money in getting rid of stamp duty. A lot of economists say it is efficient, it's a good idea it will boost the economy ultimately without collecting more revenue, your thoughts?

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Tom I've made exactly that argument on this program before. Stamp duty is essentially a tax on mobility. Indeed I've done academic work in the past showing that higher stamp duty impedes mobility and reduces the amount of transactions that we see in the market. Land tax isn't politically popular but it's far more economically efficient.