Wayne Swan (Lilley, Australian Labor Party) Share this | Hansard source

Certainly. Mr Turnbull and Mr Abbott say, 'We need a company tax cut to generate growth and jobs,' when the reality is that the ATO data shows that private companies in Australia pay, on average, a tax rate of only 19 per cent when weighted for company size and before taking into account deductions, deferred losses, minimisation and evasion.

Who could forget that they have managed to spend $80 million on a trumped-up royal commission into trade unions but have dragged their feet and doing anything about multinational tax evasion, including voting against every measure Labor introduced in this area whilst we were in government. But courtesy of Labor's transparency legislation, which the Liberals voted against but which was passed in 2013, we now know that over a third of all public companies paid no tax in 2013-14. We know that half of all foreign companies in Australia paid no tax. We know that one in three private corporations paid no tax. We know that 55 millionaires paid no tax. And we now know through the Panama papers that around 800 high-net-worth individuals have connections to activities in tax havens.

In the face of this evidence, it is farcical and tragic that the Prime Minister and his ministers can keep a straight face and claim Australia has a spending problem and not a revenue problem, and continue to lay at the feet of trade unions the blame for their economic mismanagement. The Panama papers revealed that the increasing use of tax havens by multinationals and high-wealth individuals has reached epidemic proportions. Some of Australia's largest global companies have been exposed. When global companies operate in a cavalier way, it normalises this behaviour and gives the green light for everybody else to have a go. Tax havens are used by individuals and corporates to keep their activities in the shadows.

For years, Australians have watched the Liberals pander to corporate and media interests. Now, in a world where inequality is rampant, how could anyone have any faith in a leader who professes to believe in equality of opportunity but leads a government that has opposed strong measures to stamp out multinational tax evasion and has voted in this parliament against those measures? And all the while he was doing this he was a fully paid-up member of the Cayman Islands club, watching his capital fund grow under the palm trees. If this was a leader with faith in his leadership, faith in his Treasurer and faith in his country, he would put his money here, not in the Cayman Islands.

The use of tax havens by wealthy individuals and corporates is destroying progressive taxation right across the developed world. The principal reason for using a tax haven like the Cayman Islands is to avoid tax, either in countries where they live or are based or to act as an end point for tax minimisation. Strong actions against tax havens will never be taken by public officials who use them. That much is very clear.

Tax avoidance and evasion is a huge part of the trashing of public faith in democratic legitimacy right around the world. We are seeing it play out across country after country. Everyday workers have a sense that the economy is an inside-outside game in which the wealthy play by different rules and everyone else is denied opportunity.

It is clear, for example, that over a decade there has been a culture of tax avoidance and evasion at BHP, as they plan to evade tax on $5.7 billion held in their Singapore tax shield. Not only have they flouted federal tax law but they have also behaved disgracefully in seeking to avoid state royalty payments. No wonder there is a revolt going on in Western Australia when you look at what the have been up to with transfer pricing. Transfer pricing is exploited when a company sells a product between two arms of its operation in order to book its profits into a lower tax jurisdiction. The BHP tax shield in Singapore is used to smuggle profits out of Australia. Mr Beavan, BHP's chief financial officer, may choose to cutely describe aggressive transfer pricing as a 'valuation dispute'. But, in a world in which we all live, it is evasion.

We have still yet to hear from the BHP board any cogent defence of its actions despite these matters being raised with it by the media and others at its recent meeting in London and its meeting only last week in Brisbane. BHP does have an experienced board, but this board, individually and collectively, has questions which need to be answered—very serious questions. The board has not been true to the values that it espouses in its charter of corporate responsibility.

It is very disappointing that when they were in Brisbane they did not provide any defence of the fact that they have diddled the people of Queensland of very substantial amounts of money through transfer pricing on loyalties to the extent that, from the Queensland revenue office, they now have a bill for $300 million. It is not clear how much they may owe to the same revenue office in the state of Western Australia, but it could be substantial. The governments of Western Australia and Queensland have been treated very, very badly by the big Australian, because the evidence against them is damning. Over a decade BHP has ramped up its Singapore marketing hub to camouflage aggressive transfer pricing which has cost Australia taxpayers at least $1 billion. Historically, BHP has wrapped itself in the Australian flag, but this sort of behaviour would indicate that it is simply a meaningless gesture.

In the face of all the international evidence—when we would put together what has been going on in the government's actions against the trade union movement, its attempts to provide unfunded tax cuts to multinational companies, the farce of its jobs-and-growth slogans—one thing is clear in the international economic debate. We need a fairer distribution of income and wealth to drive economic growth. The increasing concentrations of wealth and income is a handbrake on global growth, holding back the global economy. The only answer our government has is a 1980s trickle-down Reaganomics-type agenda, where workers have fewer rights and lower wages, and companies enjoy lower tax and lower regulation.

There is only one problem with that formula—it suppresses demand. Demand is what is seriously lacking across the global economy and seriously lacking even in our own. You do not solve that problem by needlessly and stupidly attacking workers rights and workers conditions—attacking the minimum wage and attacking penalty rates. In this world, it is okay for Malcolm Turnbull to attack Bill Shorten—

See this speech in context