Matt Keogh (Burt, Australian Labor Party) Share this | Hansard source

I think it only right, before getting to the body of what I want to say on the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017, to refer to the remarks just made by the member for Brisbane, and particularly to those he made towards the end of his contribution, where he had a bit of a crack about the Labor Party's policies in relation to tax avoidance, which, it has to be said, are much stronger than the approach taken by the government. His remarks were almost like being flogged by a wet lettuce leaf.

The critical thing is that the government has seriously mismanaged its budget and has put the AAA credit rating of this country at risk. The figures that we are seeing and have seen in the budgets and in the mid-year financial statements is that the debt and deficit that this government has been delivering for the nation are continuing to grow. Net debt has blown out to an estimated $317 billion since the Liberals took office. That is up from the $184 billion it was when they took office. They have blown out net debt for the nation, and the deficits over the forward estimates have net debt blowing out by a further $10 billion. Since their first budget, the budget deficits have blown out tenfold, from $2.8 billion to $28.7 billion.

When it was announced in the last budget that the government would introduce this diverted profits tax, Labor signalled that we would support it. We supported it because we support any attempts to close tax loopholes. Labor supports these measures, but we do note that the government has squibbed the opportunity. It has lost the opportunity to close even bigger loopholes in multinational tax. If the government was actually serious about getting tough on multinationals, it would do something about the one in three big companies in Australia that are paying no tax; 109 companies are paying no tax, despite having over a billion dollars in income. All of this really boils down to one thing, the attempt by this government to distract from its $50 billion tax cut for big business. It will do anything to distract from what it is trying to do, give tax cuts to the people earning the most in this nation. What will the government get for its diverted profits tax? It will raise $200 million over the forward estimates. It will give away $50 billion but it will only be raising several hundred million dollars.

Labor led the way when it came to putting forward a policy for tackling multinational tax avoidance. Right back in the time of the Gillard government, the Labor Party was looking at how we could make sure that companies were paying their fair share of tax here in Australia. The Labor government looked at investing $100 million to give the ATO the proper resources so that it could raise $1 billion of additional tax revenue in this country. But what did former Prime Minister Tony Abbott, the then Leader of the Opposition, say? He criticised the Labor government for trying to invest in the ATO to make sure that it had the proper resources to raise revenue from multinational companies that were avoiding paying their fair share of tax in Australia. Now, in its last budget, what has this government done? Now it wants to invest over half a billion dollars—$679 million—to try and raise $3.7 billion. Which is it? Is the government saying that you cannot give the ATO resources to raise the revenue that companies should be paying here or is it saying that we can invest lots of money to raise that revenue? When we look at the track record of this government, what do we see that it has actually done? It has axed 3,000 jobs from the tax office over its time in government. Imagine how much revenue we could have been getting if we had had a properly resourced ATO over the term of this government.

The hypocrisy of this government is shown in its approach to dealing with the fair payment of taxation by multinationals in this country. It highlights the difference between Labor and the Liberals. We will put people first, and the Liberal Party is just looking after its mates in big business and multinationals. Our reforms, which we took to the last election, if implemented would have delivered $1.6 billion over the forward estimates. Look at that difference: $200 million over here from the Liberal government and $1.6 billion would have been raised under Labor's approach if we had been put into power at the last election. That would have been $5.9 billion over the next decade in comparison to several hundred million dollars and a whopping big $50 billion tax cut. The thing about that $50 billion tax cut, of course, is: who is the major beneficiary of that tax cut? It is foreign shareholders. It is not Australians, because we have tax imputation in Australia. Who gets the main benefit of a tax cut for big business? Foreign shareholders. Thanks very much, Turnbull government.

This is all while the government wants to make cuts and changes that will negatively affect households across the nation. It wants to make changes to family tax benefit and changes and cuts to Medicare and it wants to not properly fund our school system. All of the things that this government wants to do will hurt working families. They will hurt ordinary Australians. Meanwhile, the government makes this piddly little attempt to try and say it is chasing multinational taxation, but it is not doing the job properly. All of this, meanwhile, is putting our AAA credit rating at risk, because the people on that side of the House cannot manage a budget properly. The people on that side of the House are driving up debt and deficit. They like to talk about how they are the great fiscal and economic managers of the Australian political scene but, in reality, they are fiscal vandals, and this legislation only serves to highlight just how out of touch they are with managing the nation's finances.

When it comes down to it, this $50 billion tax cut—Malcolm Turnbull's one-point plan for jobs and growth—by the mid-2030s will result in a rise in household income of 0.1 per cent. Well, knock me over with a feather. That is an entire—wait for it!—one month's income growth in the 13 years that we have between now and 2030. It is absolutely ridiculous, if this is what you are pinning all your hopes and dreams on for economic recovery. Yet this is what they bring us.

There are a few other points in this bill that I want to turn my attention to. There are the increased administrative penalties. That is a good thing. We support an increase in the administrative penalties. It is good to see they are making a substantial increase, to make sure there is proper compliance with taxation laws in Australia and these proposed changes to the taxation law.

It is great to see that the government has decided that they really want to enforce compliance with the taxation law—which is really not doing half the job it needs to do—but what are they doing about increasing the penalties on a range of corporate offending provisions in the Corporations Act that ASIC and many others have been screaming about for probably more than a decade? They have been saying, 'We need higher penalties to make sure that the law is complied with in a whole range of areas.'

Everyone agrees that this needs to happen, yet all we get is a slight change to the penalty unit, which is great, but no wholesale analysis of the changes that need to be made to corporate regulatory enforcement. They will make this change to taxation law—that is good; we support that—but if you are going around making changes to ensure there is compliance by business with the laws of this country, which are so important, let's get on with the program and get it right.

The other issue addressed by this bill is transfer pricing. This implements the new OECD-consistent guidelines that have been updated to include issues surrounding intellectual property and hard-to-value intangibles, which are vitally important to make sure there is effectiveness in the regime that is being implemented by this legislation.

There is one other thing I want to touch on before I end. It is the amendments that have now been moved to this legislation by the government. These are supported by the Labor Party. We are not taking any issue with what they are seeking to do. The amendment clarifies the interaction between the diverted profits tax and the rules for controlled foreign companies to ensure that double taxation does not occur. That is the right thing to do. We have no difficulty with that. It does concern me somewhat, though, that given the commitments made by the government about when this legislation would be introduced and the way in which they dragged their feet and only got it into this parliament after they said it would happen, they could not even get the law right that they introduced.

That is a very troubling and concerning thing and it is not the first time I have had to raise this point. We saw it with the crowdsource funding legislation that has been put up by the government, where a failure to consult properly with industry, in that situation, has led to legislation that is probably not going to be as effective as it could be, and that is something that we on this side of the House would like to see.

It is very concerning that we see a detailed tax law amendment—that we desperately need to see, to make sure that multinationals pay their fair share of tax in this nation, as they should, especially as we need to arrest the debt and deficit that has been growing massively under this government—yet they could not get the legislation right when they introduced it. Of course, this is the process: you move an amendment. I am not filled with confidence about this government's capacity.

Let me close by saying Labor does support the bill, but the bill does demonstrate the wrong priorities of this government. It raises $200 million. It does not get anywhere near the $1.6 billion that Labor says these sorts of tax reforms should be raising and, at the same time, it is not delivering the sort of revenue it should. We have a government that is making cuts to family tax benefits, changes to pensions, is not supporting education or Medicare and is delivering a $50 billion tax cut to business with most of the benefits going to overseas shareholders. This is a shame and a travesty, and it demonstrates the wrong priorities of this government.

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