Bill Heffernan (NSW, Liberal Party) Share this | Hansard source

I would like to talk today about something which should concern all governments of all persuasions in the Western World and all their constituents. Can I just start by outlining what we see for the future: by 2050, there will be nine billion people on the planet, and 50 per cent of them will be poor for water. Ninety-seven per cent of the world's water is actually sea water; three per cent of the world's water is fresh water, and two-thirds of that is tied up permanently in snow and ice. Two-thirds of the world's population by 2050 will be living in the Asian area; 30 per cent of their productive capacity will be gone; about 1.6 billion people on the planet will possibly be displaced. That is the challenge for the planet.

The challenge for the human race of course is the low intake of antibiotics in the food chain—and bacterial resistance—the great challenge for feeding humanity. We do not have a solution to the global food task. By 2070, barring human catastrophe—there is always that caveat—there will be 12 billion people on the planet. China itself will have close to two billion people and will have to have an organisational concept to feed half their people from someone else's resources.

The next great challenge for the Western world and the world to which we have become accustomed in its sovereignty is capturing the revenue base, which is really where I want to go today. I have to say that we are not even noticing the cost that we are going through and the revenue leakage we are going through. We are taking it for granted that 'she'll be right', whether it is paying for the ABC or paying for whatever governments expect—schools and public hospitals—although there are some exceptions to that. Senator Leyonhjelm does not think we should have public schools and public hospitals. I happen to think we should. We are not even noticing revenue leakage.

Last year the World Bank estimated we missed out on about $3 trillion involved in revenue leakage in the G20, which is mainly the Group of Eight nations. And most of that is through derivative swaps and transfer pricing. The derivate swap market was about $700 trillion. The shadow banking market is 69 per cent of China's banking. And you wonder why they don’t put the currency on the market! These are serious issues which the electorate needs to be informed of, because what we should be doing—whoever is in government should be doing it—is modelling where we have come from in the last 20 years and modelling where we are going in 20 years time if we do not change the law to catch up with the times in capturing our revenue base.

The Foreign Acquisitions and Takeovers Act 1975 is completely out of date. It does not deal with how we capture revenue from sovereign investors. It needs to be redefined globally. Why does the Future Fund—and I noticed Peter Costello the other day saying 'Oops! Why would the Future Fund want 14 and now 17 companies in tax havens?' It is because they do not want to pay tax where countries still charge sovereign investors tax. Australia does not. A passive sovereign investor coming into Australia does not pay tax. A passive investor investing in investment and production in Australia, if they declare that production for humanitarian purposes, gets charitable status, for God's sake! So we have some serious issues.

Ninety per cent of the world's economy is involved in G20 and the OECD countries. As a group of nations we should solve this, unless we want to be the generation that redefined sovereignty. I went to a bitcoin inquiry the other day and was just amazed that the people promoting it could not tell me whether it was defined as a commodity or a currency—and that included people on the phone from the US and the UK and some bright young people from Australia. Yet it is trading. To me, it aids and abets revenue leakage, so there is tax avoidance.

I absolutely think that we have to come to terms with this. Last year the turnover of the shadow banking world was about $120 trillion, which is 1¼ times the global GDP. These are challenges that most people do not want to talk about. I noticed the US corporate world responded the other day—and congratulations to the government on their G20 approach and putting revenue leakage on the agenda—by saying, 'we don't think it's such a crime to have all this revenue leakage going overseas because they are creating jobs here'. That is alright if you do not want to have schools and hospitals and they leave you in the gutter if you get sick. But the US last year estimated they missed out on between $650 billion and $800 billion in tax that was avoided. In fact the largest anti tax-avoidance case last financial year was with an Australian identified company.

So I think it is time that we in the parliament took a responsible stand. There is an inquiry—I think there ought to be a select committee that looks at this—to model where we have come from and the things we have taken for granted. These people are not breaking the law; the law is out of date. We need to model where are we going to finish up.

If you want to finish up like southern Europe—or Greece or somewhere where they do not collect their taxes and they have no enforcement regime. The euro is the common currency—and southern Europe goes to sleep after lunch and northern Europe goes back to work—and they think the currency should be commonly denominated. These things need to be thought through.

I am concerned about the legal point-scoring that is occurring in Australia with things like whether we should have a $7 Medicare co-payment or not. All of these things are well and good to be debated politically but, if we do not solve the issue of having the revenue to pay for the expectations of the electorate, we are wasting our time.

Madam Acting Deputy President, I seek leave to table a document, which I have notified the government and the opposition about.