Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

Labor will be supporting the Tax Laws Amendment (Implementation of the FATCA Agreement) Bill 2014. The bill requires Australian financial institutions to collect information about their customers who are likely to be taxpayers in the United States of America and to provide that information to the Australian Taxation Office, who, in turn, will provide that information to the United States Internal Revenue Service. This gives effect to the Australian government's commitments set out in the agreement between the government of Australia and the government of the United States of America to improve international tax compliance and to implement FATCA, which was signed in Canberra on 28 April 2014.

The opposition welcomes any sensible steps to assist tax authorities, whether in Australia or overseas, in ensuring compliance with their tax regulations. However, we would like to see the government implement measures to prevent tax base erosion and profit-shifting by multinational companies in Australia to ensure that the United States nationals are complying with their domestic tax laws. Cracking down on multinational profit-shifting is not just about making sure that firms pay their fair share of tax. It is also about making sure that the tax burden is fairly shared across companies. It is hard for a local Australian company without subsidiaries in offshore tax havens to compete against a multinational that is able to get away with paying a lower tax share.

Unfair tax arrangements also distort investment decisions by creating an incentive to invest overseas and put local companies at a disadvantage compared to international conglomerates. The Labor Party welcomes sensible steps to assist tax authorities in ensuring compliance with tax regulations. However, Labor is concerned that multinational profit-shifting will invariably become more tempting as industries internationalise, and we urge the government to close corporate tax loopholes to address this issue.