2CC CANBERRA LIVE WITH LEON DELANEY
WEDNESDAY, 16 JUNE 2021
SUBJECTS: Morrison Government’s failure to tackle tax havens and multinational tax dodging; Morrison Government’s crackdown on charities engaged in public debate.
LEON DELANEY, HOST: Well, we've heard a lot of talk about making multinational companies pay their fair share in tax. This is a topic that has emerged once again after a decision taken at the G7 meeting in the last few days, in order to levy taxes on companies like Facebook, Google, and other internet giants that shift their sphere of operations from one jurisdiction to another to avoid tax and the G7 nations have vowed to take steps to combat that. Somebody who's been beating this drum for some time, the Federal Member for Fenner and Shadow Assistant Minister for Treasury, Shadow Assistant Minister of Charities, Andrew Leigh. Good afternoon.
ANDREW LEIGH: Good afternoon, Leon. Terrific to be characterized as a drum beater. I like that description.
DELANEY: Well, that's what you've been doing. You've been beating this particular drum for quite some time, about getting multinational companies to pay a decent share of tax. Now the basic problem is that a company like Google or Facebook or whatever can come and operate here in Australia, generate revenue here in Australia, but because the parent company is in some offshore tax haven, they have to pay fees to their parent company for intellectual property or some other such nonsense, which means they don't make any taxable profit here in Australia and hence pay little or no tax. It's a dodge isn't it?
LEIGH: Sure is, and if you're a video game designer in Gungahlin, I know we've got a bunch of terrific local firms, then you can't headquarter yourself out of Ireland or Netherlands or the Cayman Islands. You've got to pay tax like everyone else. If you're a pay-as-you-go earner then you end up paying the regular tax rate. But multinationals have been getting away with too much for too long and the Group of Seven rich countries has finally said we need to put a floor under company taxes. It's quite a different philosophy, Leon, from the one that Scott Morrison was touting a couple of years ago when he said we had to be part of this race to the bottom in company taxes. Back then there was a race he believed in. It was a race to the bottom. Now we're actually seeing Britain and the United States looking to raise rates, and all of these rich countries putting a floor under the company taxes, which I think is a great thing for making multinationals pay their fair share.
DELANEY: What exactly was the decision taken at the G7 meeting? What will actually be done?
LEIGH: It's an in-principle decision to set a 15 per cent floor under the company tax rates. There's a lot more work to be done in terms of making sure that firms don't headquarter themselves in a place that's convenient for tax purposes, but actually has absolutely nothing to do with where their operations are based. That wasn't a problem back in the days when firms were producing widgets. Physical things have a physical place where they're made, but if you're producing bits and bytes then you can pretend that you're located in a little tax haven which has no company tax, and as a result bilk the taxpayers.
DELANEY: OK, so what's the next logical step here? How's this going to be implemented.
LEIGH: Australia really needs to be part of this discussion. There used to be an OECD steering group that we were a part of. The steering group still exists, but we're no longer part of it. Metaphorically, we've moved from holding the steering wheel to sitting in the backseat. That's not in our interest. We ought to be part of cracking down on tax havens, not just because they're used for tax dodging, but also because they're used for all kinds of other dodgy activity, money launderers, kidnappers, terrorists use tax havens because of their secrecy provisions. We should have no part of tax havens. We ought to be part of raising the standards around the world, ensuring that companies pay a fair share. Those multi-billion-dollar firms can afford to contribute to schools and hospitals like everyone else does.
DELANEY: Now another drum you've been beating for a while, and we've discussed this before, but Anglicare have put out a media statement yesterday calling for the Government to rule out introducing rules targeting charities. This is a topic we've discussed before, but the proposed change to the law will give the Government extraordinary powers to shut down charities on the suspicion that they might possibly maybe think about doing something wrong.
LEIGH: Exactly, and that something wrong could be something as simple as blocking a footpath or trespassing or failing to close a gate. The idea that you can shut down a charity because it is somehow involved in a summary offense, or which you anticipate will be involved in a summary offence, really goes beyond the pale.
DELANEY: Characterized like that it sounds ridiculous. What's the actual intent of this proposed change?
LEIGH: Well, really, what they're angry about is charities that are involved in public protest. They think charities should be seen and not heard, that if you're an anti-poverty charity, it's fine to be running a soup kitchen but God forbid you should actually be talking about the root causes of poverty. So organisations like Anglicare, which are involved in the public conversation - and the public conversations better for it, Leon - they're being forced out by ongoing attacks on charities from the Morrison Government that doesn't want them to have their say. It's a real danger. Suppose that there is a protest taking place next week, Anglicare promotes it on its Facebook page, and when the protest takes place someone blocks a public path. Well, then Anglicare could be, in principle, deregistered because it has encouraged people to attend a protest at which a summary offense was committed. It's just ludicrous. I think the outcry from a whole lot of religious charities should make the Morrison Government recognized that this isn't just progressive activists. It's people across the spectrum who want charities to have their say who are outraged by this measure.
DELANEY: How far advanced are their plans to introduce this change?
LEIGH: Well, they want to do it by regulation, which means it has to be tabled in the parliament and then parliament has 15 sitting days to disallow. They haven't yet tabled it. My hope is they just do the right thing and back down. They've done that on other crackdowns on charities. A couple of years back they trying to kill the entire charities commission, a body that had been supported by a dozen inquiries in the years beforehand. They back down on killing the charities commission. Let's hope they back down on this absurd overreach when it comes to charitable advocacy.
DELANEY: Well, as I said, it certainly sounds ludicrous. Thanks very much for chatting today.
LEIGH: Real pleasure. Leon. Thank you.
DELANEY: Thank you. That's Andrew Leigh, the Federal Member for Fenner, Shadow Assistant Minister for Treasury, and Shadow Minister, Assistant Minister for Charities.
Authorised by Paul Erickson, ALP, Canberra.