Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Hansard source

You are absolutely right, Senator O'Neill—shame! Labor in government also signed 28 bilateral information-sharing agreements with tax agencies in other countries, including the Cayman Islands and Monaco, which netted around $730 million in additional tax between 2012 and 2014. And we gave the Australian Taxation Office $109 million to set up a specific audit program looking at the use of offshore marketing hubs. This program has already paid dividends, with 13 companies hit with revised tax bills worth $250 million. The tax office estimates that this program will return $1 billion in additional revenue to Australia over four years. Of course, there is more to be done in this area. In March this year, Labor announced a further package of new measures, which will return $7.2 billion to Australia over the next decade. This package was developed after extensive consultation with experts and was independently costed by the Parliamentary Budget Office.

Like Labor, this government talks tough on multinational tax avoidance. But unlike us, those opposite talk the talk but they do not and cannot walk the walk. In the 2015 budget, the former Treasurer Mr Hockey announced changes to part IVA, the anti-avoidance provisions, of the Income Tax Assessment Act. I wonder if those opposite know how much revenue the Treasury estimated that this so-called crackdown would extract in additional revenue. Does anyone want to guess? Heads are down. According to the budget papers, it would extract zero, nothing, absolutely zip. It is interesting that Mr Hockey as shadow Treasurer referred to Labor's tightening of the part IVA provisions as 'an unnecessary overreaction' and 'more red tape for business'. I guess at the time he was revealing what he really thought, because his subsequent changes were mostly cosmetic.

Let us not forget that, while puffing their chests and claiming a crackdown on multinational companies, the government have actually wound back antiavoidance measures put in place by Labor, handing back $1.1 billion to multinational companies. Yes, that is absolutely right: $1.1 billion. While we are disappointed with the government's record on multinational tax avoidance, we will support the current bill. We are willing to support the reforms contained in this bill because we believe that some action to crack down on multinational tax avoidance is better than none.

The bill has four schedules. Schedule 1 introduces the concept of a 'significant global entity', a term which applies to 1,000 companies with annual income over $1 billion. Schedule 2 amends the existing antiavoidance provision to counter instances where multinational firms use artificial arrangements to avoid paying corporate tax in Australia. Up to 100 companies are likely to be affected by this measure. Schedule 3 doubles the maximum penalties for firms involved in tax avoidance and profit-shifting schemes, except where they have a reasonably arguable positon. And schedule 4 implements the Organisation for Economic Cooperation and Development's action plan on transfer pricing documentation and country-by-country reporting. There are no precedents anywhere else in the world for the corporate tax measures in this bill.

Given that these measures are untested, not even Treasury has been able to estimate how much revenue it will bring in. In fact, it remains to be seen if this bill will raise even one extra dollar of Australian tax. Imagine what the reaction of those opposite would be if Labor introduced a package of tax avoidance measures which had a series of asterisks next to the costings. But of course we did not do that. Instead, we laid out a detailed plan, in consultation with stakeholders, and had it costed by the Parliamentary Budget Office. Unlike the bill currently before the chamber, the PBO has determined that it would raise $7.2 billion in revenue.

The government's bill focuses on companies that artificially avoid booking revenue in Australia—in other words, ensuring that revenue raised here is declared here. However, the bill does nothing to address the major problem underpinning multinational tax avoidance—the use of debt deductions to send money offshore. Tackling debt deductions is a core element of our reforms and will close one of the major loopholes that multinational companies use to avoid their tax obligations. We have never said that our package is the final word on tackling multinational tax avoidance, but we have called on the government, and will continue to do so, to adopt our measures alongside their own.

Mr Turnbull recently said the following at the Prime Minister's Prizes for Science dinner:

If somebody else has done something that is even better than what we have thought of, then we will, recognising that plagiarism is the sincerest form of flattery; we will pinch it and use it.

Well, Labor has a package that would represent some real action in cracking down on multinational tax avoidance. Labor's plan has been independently costed by the Parliamentary Budget Office and we know that it will raise real revenue—$7.2 billion of it. If the government have the good sense to pinch our ideas, if they have the good sense to adopt our package, then we say, 'You're absolutely welcome to it.' We want and need real action to make our tax system fairer. We want and need to take the burden off small businesses and low- and middle-income earners. Perhaps, if the Turnbull government raises some real money from those who can most afford it, they will not have to spend so much time attacking low- and middle-income earners.

Each dollar raised by making multinational companies pay their fair share of tax could replace a dollar that the government has sought to rip from the pockets of pensioners, young jobseekers, university students or people just visiting the doctor. It just goes to show the twisted priorities when the government is openly canvassing a 15 per cent tax on everything—a tax which hits the people who can least afford it the hardest—yet they will not take strong action to ensure that our biggest and wealthiest companies pay their fair share.

The government really needs to get serious about multinational tax avoidance. Our new Prime Minister, Mr Turnbull, is trying to tell us that we have a 21st century government. Let me tell you what a 21st century government does. It considers the problems of the 21st century and it applies 21st century solutions. But that is not what the government have done. As I keep reminding the Senate, the so-called 21st century government took Australia's largest, most modern infrastructure project, the 21st century National Broadband Network, and proceeded to roll it out using 20th century technology. That was after they delayed the project by two years and blew out the cost by $26 billion. And this so-called 21st century government still do not have a serious, effective solution to address dangerous climate change by cutting Australia's carbon emissions.

I mentioned earlier that advances in information and communications technology and the growing global trade of intangible goods and services is exacerbating the problem of multinational tax avoidance. A 21st century government is one that will get serious about tackling this problem. The bill is a small step in the right direction, but the government should get on board with Labor's reforms—which, as I have said, will raise $7.2 billion from Australia's multinational companies. If they did, it would be a big step towards addressing the inequity that allows many of those who can most afford it to pay the lowest rates of tax. It would also go a long way towards restoring fairness to Australia's taxation system. If Prime Minister Turnbull wants to show he is serious about tackling multinational tax avoidance and if he wants to show that he can drag the right wing of his party kicking and screaming into the 21st century, then he should adopt Labor's multinational tax package. The 21st century is beckoning. Let's see if our self-proclaimed 21st century Prime Minister can answer that call.