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

I rise in support of the pharmaceutical success story in my electorate of Lilley. Sanofi Consumer Healthcare, based in Virginia, employs more than 300 locals at their manufacturing facility. Sanofi has tapped into the lucrative Chinese market, with a trusted Australian-made labelling on its product that has helped drive sales in that region towards $1 billion.

By making the decision to set up manufacturing plants in Australia, Sanofi has chosen to pay a level of wages consistent with our status as an advanced economy. There are 300 workers in my electorate who benefit from Sanofi's decision to set up in Virginia, on Brisbane's north side. Inevitably, some aspects of Sanofi's supply chain are not Australian made. The raw ingredients for many of its supplements simply cannot be grown on a sufficient scale in the Australian climate and must be sourced from overseas. Nevertheless, there should be no reason to deny Sanofi's deep connection to Australia or to question the Australian-made endorsement its products receive, particularly when the same endorsement is given to other goods assembled, manufactured or elaborately transformed in Australia by Australians from local or imported ingredients. I commend Sanofi for their ongoing service to the electorate of Lilley and for their commitment to the Australian-made ethos; long may it continue.

I also refer to the ongoing blatant tax avoidance by many of the world's largest pharmaceutical companies. An Oxfam report released today has found that four of the biggest pharmaceutical companies operating in Australia have avoided four times as much tax as they have paid. Tax avoidance by these four multinational companies amounts to $215 million in Australia, the equivalent of five million medical prescriptions each year. Nor is the tax-dodging behaviour of these big four confined to Australia. Oxfam estimates that their tax avoidance costs advanced economies nearly $4.8 billion in lost revenue and robs developing countries of an additional $146 million per year.

Typically, these big four pharmaceutical companies avoid paying tax in advanced economies by booking most of their profits in tax havens in Belgium, Ireland, the Netherlands and Singapore. Where tax rates are as low as zero per cent, these companies have notched up profit margins of 31 per cent. In Australia, their combined profit margins are a negative seven per cent. The booking of high profits in tax haven countries and low or negative profits in countries with decent tax rates has been well documented by my colleague, Gabriel Zucman, from the Independent Commission for the Reform of International Corporate Taxation.

By now, we know well the consequences of multinational profit shifting: higher inequality, entrenched corporate power, a massive redistribution of the tax base away from countries like Australia and the undercutting of our world-class health and education systems. Tax avoidance on such a grand scale impoverishes all of us, not just in the developed world but in the developing world also, where it is a threat to the Sustainable Development Goals. They will simply not be able to fund health and education— (Time expired)