Elizabeth Watson-Brown (Ryan, Australian Greens) Share this | Link to this | Hansard source

One in three corporations in Australia pay no tax. That stat isn't just pulled out of thin air; it comes from the Australian Taxation Office itself. The ATO publishes a corporate tax transparency report each year, and the most recent data from the financial year 2020-21 is, as you would expect, damning: Ampol made $20 billion income with zero tax paid; BP made $17 billion income with zero tax paid; Glencore made $14 billion income with zero tax paid; ExxonMobil made $11 billion income with zero tax paid; Woodside made $6.7 billion income with zero tax paid; Chevron made $9 billion income with $30 tax paid. I'm not sure if paying that $30 in taxes is more or less offensive than paying nothing. These companies avoid taxes by taking part in a process called 'profit shifting'. This technique involves multinational companies moving their profits from Australia, for example, into another country that has a low or no corporate tax rate. Does that seem confusing? Let's just break it down.

Let's use the example of Nike. The Paradise Papers scandal confirmed that Nike had engaged in profit shifting. They did this by registering the country of Bermuda as the location of their intellectual property—their designs, logo and so on. This Bermuda Nike subsidiary then charged ridiculously expensive royalties to other Nike groups around the world for the use of the intellectual property. Intellectual property is very often tax deductible, and so Nike subsidiaries around the world could claim these very expensive royalties against the profits they were making in their own country. Does that sound complicated? That's because it is. It's also very expensive for governments. In fact, the OECD estimates that multinational corporations shift $1.38 trillion of profits every year, costing governments around the world a collective US$245 billion in lost tax revenue. This is completely unjustifiable and unsustainable.

One sure-fire way to address this issue is to establish public country-by-country reporting. This would force companies to provide a breakdown of which countries their profits are made in, instead of allowing this figure to be posted as a lump sum. This is something the Greens and tax justice advocates have been long calling for. In November last year, the Assistant Treasurer and the Assistant Minister for Competition, Charities and Treasury put out a media release, promising that Labor would require, by 1 July this year, multinationals to publicly disclose revenues, profits and taxes paid in each jurisdiction. The exposure draft of this commitment proposed the first unrestricted and mandated public country-by-country reporting framework. Of course, this was not so widely welcomed by big business—businesses like who else but the globally renowned facilitators of multinational tax avoidance schemes and disrupters of government attempts to crack down on these schemes, our old friends at PricewaterhouseCoopers! They said in their submission:

… based on our own observations and discussions with stakeholders, domestically and internationally, there has been significant concern with these measures as currently drafted. In summary, in our view, the design of the proposed legislation may not meet policy objectives of enhancing transparency and trust without an excessively onerous compliance burden.

Just like that, country-by-country reporting was removed. When these companies avoid paying their fair share of taxes—or any taxes at all, as is often the case—it's the Australian people who suffer. For every dollar that these giant multinationals shift offshore our communities lose vital funding for essential services such as education, transport, health—the list goes on. So the next time a government tells you, 'We just can't afford that,' just remember that we don't have dental covered by Medicare because our health needs are apparently trumped by the Chevrons of this world only wanting to pay $30 in taxes.