Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Hansard source

A hallmark of the Abbott-Turnbull-Morrison government has been to be as soft on multinationals as they are tough on the vulnerable. We've seen, during the time the government have been in office, continued attempts to try and reduce taxes on multinationals, defences of tax havens—particularly under former Prime Minister Turnbull—and an ongoing unwillingness to act on the scourge that is multinational tax avoidance. Those opposite voted against important measures that the previous Labor government put in place to ensure that multinationals pay their fair share, and they continue to mislead this House by falsely claiming Labor has not supported their measures. It's not true. They haven't done enough, but in what little they've done they've had the full backing of the Australian Labor Party.

Now we can see the world moving against the coalition. We can see very clearly the United States, under President Biden, now moving to increase the corporate tax rate. We see in Britain, under a Conservative Prime Minister, Boris Johnson, an attempt to pay for public services by increasing the corporate tax rate. And we can see, with the latest announcement through the OECD-G20 report Statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy, 138 countries around the world committing to a two-pillar solution. This solution will, in pillar 1, allocate taxing rights of 25 per cent of the residual profits of the most profitable multinational enterprises to the jurisdictions where the consumers are located, and, in pillar 2, provide a global minimum tax of 15 per cent on all MNEs with annual revenue over 750 million euros.

The argument that the conservatives in this country and in some others have made—that we need to engage in a race to the bottom in company tax—is belied by recent moves from the United States, the United Kingdom and the global community. Yet the Morrison government is nowhere to be seen on this. Australia used to have a key seat on the steering committee in the OECD in charge of these conversations around multinational taxation. We no longer have that role. And, at a time when tax havens are being recognised as a danger to the global tax system, you don't hear a peep out of the Treasurer about them.

It is a fact, according to careful research that's looked at tax havens, that some 40 per cent of multinational profits are now being channelled through tax havens and low-tax jurisdictions. Tax havens aren't simply a means of reducing the tax bill; they're also a hidey-hole for illicit wealth. Tax havens have been used by Mexican drug lords and by al-Qaeda. Tax havens have been used by those involved in extortion and kidnapping. Tax havens have financed terrorism. They should be ruled out of any engagement with the sensible multinational tax community. But we've seen from this government an approach of being soft on tax havens—of being unwilling to recognise the sheer amount of money that is hiding in tax havens. On one estimate, some A$100 billion is in tax havens at the moment. Another study has found that four out of every five dollars in tax havens are there in breach of other countries' tax rules, often because the secrecy surrounding tax havens means that tax authorities, such as the Australian Taxation Office, simply aren't able to get to the bottom of what's happening there.

We've seen leaks from tax havens—such as the Panama Papers; the Pandora Papers; and LuxLeaks, the PwC leaks—which have revealed the abuse of tax havens and highlighted very clearly the way in which tax havens are being misused. The Australian Taxation Office has taken up a range of the cases which have been exposed through these leaks, but we shouldn't be relying on whistleblowers in order to crack down on tax havens. We need a government that is as tough with tax havens as it is with social security recipients—a government that is as tough with multinational tax dodging as it is with people with a disability.

We've seen from this government a failure on multinational taxation and, as a result, Australian small businesses and individuals pay more tax. In order to pay for the public services that we all use, the revenue has to come from somewhere, and too often under this government we've seen an expectation that it will be ordinary Australians that pay those taxes, rather than multinationals and those who are tax dodging through tax havens.

This bill contains some perfectly sensible measures, but the reason that the member for Whitlam, the shadow Assistant Treasurer, has moved this important second reading amendment is to highlight the importance of multinational tax dodging to this side of the House. Under an Albanese government, we will crack down on multinational tax avoidance. The shadow Treasurer, the shadow Assistant Treasurer, the member for Kingsford Smith and many others on the Labor economics team are firmly of the view that we need to do far more to crack down on tax-dodging multinationals, and we will continue that campaign right up to election day.

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