Tania Lawrence (Hasluck, Australian Labor Party) Share this | Hansard source

Australia is the country of a fair go, not the country of 'anything goes'. When we see the lists, posted each year, of very wealthy companies that have not paid any tax at all, or paid only a pittance, the hackles quite naturally start to go up. A few years ago an Australian Treasurer, Hon. Joe Hockey, managed to simplify his party's policies for everyone by suggesting that there were two types of people: leaners and lifters. It was the sort of ugly, divisive world view that explains why we still see policies like robodebt. The coalition are the masters of piling onto people who are already doing it tough.

When we turn the gaze to the other side of town, however, we can quite legitimately ask whether a wealthy corporate citizen is also a good corporate citizen. If they are making a million bucks or a billion bucks and not paying their fair share of tax—not funding schools and hospitals, not doing their bit for the very community they're making money from—then I think we can well identify them as leaners, can't we? This applies regardless of whether a company is domestic or international, but somehow it rankles with me even more when it's a multinational not doing its fair share, not pulling its weight. It's like someone you don't even know showing up at your house and helping themselves to the roses in your front yard. But we do know who the multinationals are—the large ones, at least.

Technology companies, like Amazon, Apple and Google, operate all over the world, as do many mining and manufacturing companies. We know a lot about these companies. We know how much they are valued at, what their assets are and, to a great extent, their annual revenue, and that annual revenue is sometimes quite large. For example, in the case of the advertising revenue of Google and Facebook in Australia last year, the Financial Review noted that Google reported $8.4 billion in revenue but only $1.95 billion in Australian revenue, after naming the rest in its reseller arrangements with its international parent company. It paid $92.6 million in income tax. If there's anyone else who is paying 1.1 per cent in tax, please step forward. Facebook made $1.62 billion, but only $224.6 million in Australian revenue locally after accounting for its own reseller expenses. Facebook paid $42.8 million in tax. That's 3.4 per cent.

These are ballpark figures, but you get the idea. They are great tax rates if you can get them. It's not the case, however, that the tax missed out on by the ATO and the Australian community somehow shows up on the ledger of another country. Rather, multinational companies shop around and station themselves in places where they can simply make the most money. The other side of the coin is that communities—not just Australian communities but communities all over the world—miss out on the tax revenue that they need. Some of these countries are desperately poor. There, the motivation to fix this issue is not so much a question of the fair go but, rather, is rooted in a severe need for predictable food, water, housing and social services.

The Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023 is our response to the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. Australia is one of over 135 countries and jurisdictions that are implementing 15 actions to tackle tax avoidance. That list of countries includes China, the USA, Russia, the UK, most EU countries and many poor countries, which need their tax base to be firm and not eroded. The OECD notes in its action plan that globalisation has had many good effects. It has boosted trade and investment, supported growth, created jobs and lifted millions of people out of poverty. The OECD also notes that over the decades there has been a trend towards the evasion of just tax payments by multinationals and that, as a result, governments are harmed, individual taxpayers are harmed and businesses are harmed.

This legislation also acts to improve the competition and dynamism in our economy. How can a new local player enter a realm of business where there is a dominant multinational in place that is hardly paying any tax at all? The new domestic player isn't suddenly going to have a headquarters overseas. They are here and are expected to pay tax here. It is hard enough for a new entrant in technology, in manufacturing or in whatever field of commerce, without having to compete on price with a dominant player whose tax burden is tiny compared with theirs. As the member for Paterson remarked earlier in this debate, Australians expect everyone to pay their fair share. An economy where new entrants are welcome is a more dynamic, more competitive and fairer economy. These changes will have useful effects, not just for the revenue base but in assisting the economy as a whole.

The legislation does a couple of useful and reasonable things. Schedule 1 requires public companies to provide information about subsidiaries in their annual financial reports—completely reasonable. Schedule 2 amends the thin capitalisation rules by replacing the current asset base test with an earnings based test, as recommended by the OECD—totally reasonable. We have for many years simply put up with a worsening situation whereby corporations have been allowed the fiction of moving profits to locations where they have little or no actual activity and, conversely, failing to pay tax where their activity is in fact occurring, such as right here at home.

This legislation is in the public interest, not just here but across the world. It is, as my friend the member for Bean said, a step in the right direction. Will it result in an act that remains unamended for the next 20 years? I sincerely doubt that. Should we wait until we're sure it is perfect? Absolutely not. We enact this legislation knowing that it is a start to creating a fairer Australian tax system and that there is more work to be done. Some corporations will do the right thing and respond constructively to these parallel and similar legislative changes in many like-minded countries across the world. Others will slide about the globe like pieces of soap, and that will require further action.

This legislation was part of the Albanese government's platform going to the election last year. The Australian people voted for this legislation. We have a mandate and a duty to act, and we begin now.

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