Thursday, 27 February 2020
Australian Business Growth Fund Bill 2019; In Committee
I want to touch on one of the things that Senator Hanson and indeed Senator Whish-Wilson raised. It goes to the constitution and arrangements of the companies that might seek to make application for an investment and it goes to the nature of tax havens. Sometimes what happens in Australia is that companies with foreign owners will invest in a company. They'll take an R&D incentive, a tax incentive, from the government, and they might get some refunds in relation to tax. They'll develop IP and sell it back to the parent at some very small cost, which then licences it back to them at some very high cost. That's done to transfer profit. Often the company that they might be transferring it to will be in a tax haven. One of the defining attributes of tax havens is a complete lack of transparency. Obviously, we don't want to have a situation, as Senator Hanson was describing, where we invest in a company and ultimately the money ends up going offshore, particularly in circumstances where it goes offshore to a known tax haven. So, in relation to the investor mandate and the criteria for investment, are there any conditions that will be placed on investment in respect of companies that have related entities in known tax havens?