Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

I listened carefully to the speech of the member for Kingsford Smith on the Treasury Laws Amendment (OECD Multilateral Instrument) Bill 2018, and I was a little disappointed to find that it was devoid of so many facts. So, I appreciate the opportunity to now set the record straight when it comes to the government's commitment to tackling multinational anti-avoidance of tax. If a multinational corporation makes money in Australia, it is right they pay tax in Australia. The Turnbull government has introduced new laws to close loopholes, to ensure that profits are taxed here. The Turnbull government is absolutely determined to make sure that everyone is paying the right amount of tax, and large multinationals must pay their share. Deliberate tax avoidance will not be tolerated, and tax cheats will be tracked down and will face the full force of the law.

Whilst the Turnbull government have taken strong action and introduced tough new laws, Labor, by contrast, when they were in government, did virtually nothing to combat tax avoiders, and in opposition they opposed our Multinational Anti-Avoidance Law and the introduction of the country-by-country reporting regime. Paying tax is not optional. The Turnbull government will ensure that multinational companies pay the tax that they owe in Australia. As a result of our new laws, more money will be invested here, benefitting our community and helping guarantee the essential services and infrastructure that Australians rely on.

Given the fact-free contribution by the member for Kingsford Smith, I'd like to place on record that, since the government established the Tax Avoidance Taskforce, the Australian Taxation Office has raised around $7 billion in income tax liabilities against large public groups and multinationals. The Australian Taxation Office has collected $4.1 billion in cash, with $3.1 billion of that amount from multinational enterprises. Of that $3.1 billion, the Australian Taxation Office has collected over $1 billion from ecommerce companies. The government's coordinated plan to tackle profit shifting and avoidance of Australian tax law will keep paying dividends as well. The Australian Taxation Office confirms that the Multinational Anti-Avoidance Law alone has seen additional sales income of $7 billion each year now being returned in Australia. Furthermore, hundreds of millions of dollars of additional GST revenue is now being paid. The Australian Taxation Office has publicly indicated that there is a significant change in how multinational companies are approaching their Australian tax obligations as a result of the tough new anti-avoidance laws put in place by this government and not supported by those opposite. In fact, Australia is leading the way in combatting multinational tax avoidance—no thanks to those who are not trying to find solutions to the problems that we have identified and tackled.

I would, though, like to thank those who have made a contribution to this debate. This bill will help Australia to quickly and efficiently modify the majority of Australia's bilateral tax treaties to bring them into line with international best practice when it comes to tackling multinational tax avoidance. It will complement the other measures implemented by the government to enhance tax system integrity, including the Multinational Anti-Avoidance Law, country-by-country reporting and the diverted profits tax. The multilateral instrument is a unique tool that is expected to update more than 1,100 bilateral tax treaties worldwide. At present, based on the known positions of other jurisdictions, the multilateral instrument will modify 31 of Australia's 44 existing bilateral treaties. Modifying these treaties through the multilateral instrument will save time and expense, significantly, for Australia, compared to the alternative of bilaterally renegotiating each treaty to achieve similar outcomes.

The multilateral instrument will ensure that multinational entities are no longer able to exploit Australia's bilateral tax treaties in order to avoid paying tax. Additionally, the multilateral instrument will provide greater certainty for taxpayers by strengthening current tax treaty related dispute resolution procedures. Australia has committed to working closely with its treaty partners to resolve treaty related tax disputes through the multilateral instrument. Where both treaty partners agree, taxpayers will also have access to independent and binding arbitration, thereby allowing disputes to be resolved more quickly.

Looking to the future, the government will continue to work with the G20 and the OECD bilaterally to ensure that the international tax system operates as efficiently, fairly and effectively as possible. The multilateral instrument clearly demonstrates the benefits of international cooperation, and the government encourages other jurisdictions to adopt it to the fullest extent possible. I commend the bill to the House.

See this speech in context