Steve Georganas (Adelaide, Australian Labor Party) Share this | Hansard source

This Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023 is an important piece of legislation that is way overdue. It was a commitment by the Labor opposition in the lead-up to the 2022 election campaign, and this government is committed to ensuring, that multinationals pay their fair share of tax—that people who set up offshore companies where there is not much transparency are brought back into the fold to be on equal terms with other businesses that are doing the right thing and not offshoring assets, setting up accounts overseas and keeping that grey area over transparency. So this bill is a good thing. It's something that's way overdue and something we should be supporting in this House, and we heard the member for Newcastle say that she hopes every 151 members of this House support it. As I said, this legislation will provide a level playing field for Australian businesses and increase transparency.

When I think of the businesses in my electorate of Adelaide, small, medium and large businesses, some are doing it tough, are working extremely hard and have put everything into their business to create a business that creates jobs and assists our economy. These people are doing the right thing, paying their fair share of tax, which goes into our education, our hospitals, our police and a whole range of things. What do you say to those people when there are companies out there who are evading our local tax laws by setting up companies overseas, offshoring their money and having zero transparency? That creates an uneven playing field and it creates uneven competition.

For example, we know that Chevron paid very, very little tax. They're a big multinational company, they've got offices set up all around the world—hard to track et cetera. What do you say to BHP, who have been doing the right thing in terms of paying their fair share? But it is even worse when we look at the current economic climate that exists today here in Australia, because many families are doing it tough. Interest rates have gone up. People are struggling to pay their bills et cetera, and the parliament, both the opposition and the government, are doing all that we can to assist those people. But what do you say to those people who pay their fair share of tax—the nurses, the workers, the policeman, our everyday supermarket workers?

It is a very unfair system when a very small group of people have the ability, through tax agents and through the resources that they have, to avoid paying tax in this nation. Paying tax means, as I said earlier, that we can afford our hospitals, our education, our roads and everything else that we perhaps sometimes take for granted in this nation. And it helps the economy because, when money is spent here in Australia, it spins off into other areas.

As I said at the outset, this was a commitment in 2022 in the run-up to the election, and the Albanese government is ensuring through this legislation that multinationals pay their fair share of tax and that it levels the playing field for Australian businesses, and that it ensures transparency—knowing exactly what the make-up of a particular business is. This legislation will hold companies to account, particularly large corporate groups for their corporate structures and whether they are operating with opaque or atypical tax arrangements. Given the global momentum towards ensuring that firms pay their fair share of tax, it is in the public interest that shareholders also have more information and know that the companies they're investing in are legit and not avoiding tax in the country they're based in or where they live.

Most companies are doing the right thing. We know that. But there are a proportion of multinationals that are not doing the right thing. They're operating under the current rule. That's why we need, in schedule 1, the 'Multinational tax transparency—disclosure of subsidiaries'. This will target Australian public companies, listed and unlisted, to disclose the subsidiaries and where they are located—in other words, if they have offices overseas, where they are and what income they earn, and to monitor and ensure that they are doing the right thing.

This will hold companies to account, particularly those larger corporate groups, requiring them to be more transparent about their corporate structures and whether they are operating under opaque tax arrangements, such as through subsidiaries located in low tax jurisdictions. We know where they all are—the Cayman Islands, the Bahamas and a whole range of places.

This information will support better economic analysis and help inform whether tax laws are operating as intended in collecting the right amount of revenue. It's not a tax grab and it's not the governments wanting to take your money. It's about doing the right thing. It's about ensuring that those companies are paying the correct tax, just like all those companies I mentioned earlier, in my electorate—and in everybody else's electorate—small businesses, medium-sized businesses and large businesses, who work extremely hard. It's a tough gig, running your own business. But it's also about the everyday Australians who earn a salary or small wage. They don't have much to declare on their tax, in terms of expenses, yet these people are paying their taxes. It's an unfair playing field.

Australia has always prided itself on being a fair country, a country of equal opportunity, a country that gives everybody a level playing field. This is not the case with our big corporates and massive multinationals. That's why companies will have to disclose the information I mentioned earlier, as part of their annual financial report, to help reduce compliance burdens. This is in line with international approaches. For example, the UK has a similar measure already in place, as do the EU countries and many others around the world.

The other part of this is the revenue raising measure. It targets known tax planning arrangements by limiting M&E debt deductions and ensuring that they pay their fair share of tax in Australia. This helps level the playing field for Australian businesses. We have to give Australian businesses all the support that we can, and the least we can do is offer them an economic or business climate that is on the same playing field. At the moment, it's not.

This bill was campaigned on and promised by the Labor government, and we intend on delivering it. We want to make sure that it's harder for businesses to be opaque, to ensure that they're paying their taxes, that those taxes go into the revenue that can then be used in Australia's public expenditure, on building roads and hospitals, making sure that our kids and grandkids get an education, and to ensure that we have enough money for the different funds and grants that support small and large businesses. So it's an important measure. It's a measure, as I said from the outset, that I hope every member of this House supports.

We've seen too many stories of massive companies in the media, such as on 60 Minutes. There's always an expose of particular multinationals who pay zero tax yet have estimated earnings in the billions of dollars. What we're saying is that this is not a fair system. Even though it's a small group, they are jeopardising our legitimate businesses, who work hard—even our large businesses. I mentioned BHP earlier, where one of their competitors is paying zero or very little tax in Australia. These are the things that will assist our economy and raise revenue for us, as I said, to spend on those things that we need to spend on.

An earnings based approach to debt deductions will ensure that deductions are directly tied to an entity's economic activity earnings. This is a good approach in the legislation to addressing the tax planning practices of multinationals as well. We've seen many stories in the media in this area where those that can afford the big tax agents or accountants and have lots of resources at their fingerprints can set up this specific bookwork et cetera to get away with it, or to make it so opaque that no-one can actually follow up on it et cetera. Schedule 2 amends Australia's interest limitation capitalisation rules. The amendments alter the exemptions with the existing thin capitalisation rules, and this excludes smaller entities with less than $2 million in debt deductions.

There are a lot of things in this bill, but, as I said, the most important part is that we ensure that they have a level playing field. We owe it to our small businesses and those businesses that are doing the right thing. More importantly, we owe it to everyday Australians who earn minimal wages yet are still expected to pay their tax and have very few deductions. In the majority of cases, these are the people that look after us in hospitals, like nurses; the police that secure us and protect us; and our teachers, who educate our children and grandchildren. I think we owe it to those people to ensure that these big multinationals cannot get away with that. They have an obligation to this nation, just like we all do and just like everyday citizens do, to do the right thing. I think it's abhorrent that in today's world, where we know this is happening, we are letting them get away with it.

I urge everyone to vote for this particular bill because it brings a level playing field. It is the right thing to do. We spend a lot of time in this place doing all sorts of things. We've spent the last 10 or six years with one side denying that anything was wrong with robodebt and the other side pushing it. There's a case where we went after the poorest of the poor in this nation and no-one shrugged a shoulder, yet here are people who are actually ripping off this nation, working people and businesses doing it hard. I find it hard to believe that there may be some opposition to this. It's mind-boggling to think that anyone would oppose this particular bill. As I said, it is the right thing to do. We've got a duty, and we owe it to our constituents and to those Australians that pay their tax in the proper manner. These Australians perhaps have no other choice but to pay, and earn much less than what these multinationals earn, yet we spent six to seven years chasing after the poorest of the poor with robodebt. In this case we shrug our shoulders and think nothing of it. That's why this is important.

This is perhaps a bill that should have been passed in the last 10 years, after the exposes on 60 Minutes and a whole range of things that we've seen on TV and in the media. I did a google before I came in here to have a look at what came up. There is page after page of different exposes on multinational companies that pay zero tax and have no allegiance to any country but themselves, yet we chase after people with a small debt to Centrelink. This is not right. That's why, once again, I urge everyone in this place to ensure that they vote for this bill. It would be unthinkable to not vote for it. We've got a duty to those people that I mentioned earlier.

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