2GB MONEY NEWS WITH BROOKE CORTE
MONDAY, 3 MAY 2021
SUBJECTS: Multinational tax avoidance; Government’s failure to seek JobKeeper repayments.
BROOKE CORTE, HOST: Andrew Leigh's the Shadow Assistant Minister for Treasury. He joins us on Money News this evening. Andrew Leigh, welcome to the show again.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: G'day, Brooke. Great to be with you.
CORTE: The multinational anti avoidance legislation actually came into effect five years ago. Has it done anything?
LEIGH: Well, it's done less than the Coalition promised. They were planning that that would be the be-all and end-all to multinational tax avoidance, but you can see the debate moving on well beyond what the Government's done in the conversations at the OECD and the G20. There's a key steering group there. Australia used to be a part of it, but we no longer are. We're not part of those big conversations about how laws need to update to stay in pace with the tech giants. As production's become more and more weightless, it's become easier to move it around different countries.
Netflix booking its Australian revenue through the Netherlands looks pretty dodgy to me. A billion dollars in revenue, $550,000 in company tax - that doesn't seem fair.
CORTE: As you said, though, in fairness to the Government, it's not just a problem for Australia. We live in a very seamless world these days. Good news is, I guess, that Cormann is at the OECD now. He can push the cause.
LEIGH: Well, let's hope that Australia does better engage with the OECD. You know, one of the interesting things is the OECD does a country report every year and most countries treat that as a great opportunity to get good scrutiny of their policies, Australia treats it like a problem and we try and do our best to avoid any sort of critical comments from the OECD. So, I hope we do better engage with a whole lot of those OECD processes with Mathias now at the helm, and one of those is multinational tax.
We've got to be thinking about whether it's appropriate to get some sort of minimum taxation. We ought to be looking seriously at the conversation around digital services taxes, as Britain and France have done. All this needs to be on the table if we're to make sure that the tech giants pay their fair share.
CORTE: I mean, credit to the Government, Cormann's at the OECD, him leading it's going to be great for Australia. They were good to push him. It's a good call, isn't it?
LEIGH: Labor supported it, in contrast, of course, to the way in which the Government chose not to support Kevin Rudd for the UN Secretary General's job. That's water under the bridge. The fact that he's there is a good thing. I support Australians in international organizations. I support the fact that since Mathias Cormann got to Paris he seems to have suddenly discovered that action on climate change matters, as well.
We've got to be doing more on this this tax conversation, Brooke, because when multinationals don't pay their fair share Australian small businesses need to pay more. Your typical Aussie small business doesn't have the opportunity of booking their revenue through a Netherlands subsidiary, so they end up being out-competed by a firm using a tax loophole they can't access.
CORTE: So what policy are you taking to the next election to do something about this?
LEIGH: Well, we took a whole suite of multinational tax policies to the last election. We'll certainly have a ferocious suite of policies going to the next election. It'll be informed by the fact that two-fifths of multinational profits are now booked through tax havens. The tax havens are being used to subvert the international tax system.
Unlike a few years ago, most of the advanced world is not engaged in a race to the bottom in company tax. In fact, Joe Biden and Boris Johnson are both aiming to raise the company tax rate, as well as making sure that we don't have these systems of low-tax jurisdictions like the Caymans or the Bahamas taking all of the revenue from advanced countries.
CORTE: And Andrew Leigh, I got to ask you about something else that happened today: the billionaire Solomon Lew performed a stunning backflip. He should be at the next Olympics. He's agreed to repay about $15 million in JobKeeper payments that it received last year. It made a profit of $188 million, so $15 million's small change. Better late than never, I guess, but I reckon it might have been the influence of JB Hi-Fi's Richard Murray, who's jumped ship from JB Hi-Fi and he's heading over to Premier by October. I suspect, they haven't said that today, but I suspect maybe he's had something to do with that.
LEIGH: Well, I've been campaigning since last September for firms that had highly profitable years to repay their JobKeeper. Premier Investments had its most profitable year last year. It paid its CEO a $2.5 million bonus in contravention to what the Business Council and the Tax Office said you should do. It also paid out a stonking dividend to shareholders.
We don't actually know how much JobKeeper Premier Investments has gotten, Brooke, but one estimate suggested could be up as much as $110 million. So, $15 million is good. They've backflipped, as you say, but I'd like to see them handing back every cent they got. Congratulations to them and their strong profit figures, but they're the last firm in Australia that needs corporate welfare.
CORTE: Andrew Leigh, Shadow Assistant Minister for Treasury, thank you for your time as always on Money News.
LEIGH: Always a pleasure, Brooke. Thanks again.
Authorised by Paul Erickson, ALP, Canberra.