Wednesday, 25 November 2009
Overseas Tax Havens
Firstly, I as minister have specific responsibility for this. The Rudd government and the international community have taken seriously the tax havens issue. The government has funded Project Wickenby at a cost of $430 million through to 2012-13. It is a multiagency task force aimed at detecting, deterring and dealing with haven abuse and sends a clear message that the Rudd government is responding to abusive secrecy haven schemes. Since the impact of the global financial crisis, the international community has taken unprecedented steps to stamp out tax havens and international tax abuse, and Australia has fully supported the countermeasures and sanctions against the non-cooperative jurisdictions that were agreed at the G20 leaders meeting in April 2009. These actions will mark the end of the era of bank secrecy that damaged public finances and put at risk the financial system.
Australia was also elected the inaugural chair of the Global Forum on Transparency and Exchange of Information for Tax Purposes in September of this year, in part because the Rudd government has strongly advocated improvements in tax transparency and addressing the abusive use of tax havens. As the Global Forum chair, Australia will be leading and pushing hard to see the new agreed tax transparency peer review system rapidly put in place. That way, we can collectively move forward with ensuring our developing country partners can meet global standards and also collect their fair share of domestic tax revenue.
The Rudd government has been proactive in negotiating tax agreements with low-tax jurisdictions. To date Australia has signed nine tax information exchange agreements with other jurisdictions, including eight I have personally signed, and the pace with which these jurisdictions are coming on board is speeding up. Australia has now signed agreements with Bermuda, Antigua and Barbuda, Netherlands Atilles, British Virgin Islands, Jersey, Isle of Man, Gibraltar, Guernsey and the Cook Islands. This rapidly growing network of agreements reflects the Rudd government’s leadership in the widespread implementation of international standards of tax transparency and information exchange.
This is an extraordinarily important matter because, while the minister has correctly said that there have been agreements made with 10 countries who have been labelled tax havens, there are another 32 that the government has not made agreements with. They include Luxembourg, Malta, Mauritius, Monaco, Netherlands Atilles, San Marino, Seychelles, US Virgin Islands, Andorra, Anguilla, Antigua and Barbuda, the Bahamas, Belize, Dominica, Granada, Liberia, Lichtenstein, Marshall Islands, Montserrat, Nauru, Niue, Panama, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Samoa, Turks and Caicos Islands, Vanuatu—about whom the tax office issued a warning today regarding insurance matters—Brunei, Chile, Costa Rica and Guatemala.
What the Assistant Treasurer may have made a statement to the chamber about in his two minutes was the use of tax havens by the Future Fund. I note that Mr Costello, the former Treasurer, has been given a guiding role for the Future Fund and I wonder if the minister might come back to the chamber at some time and explain why the Future Fund has money in what are regarded as tax havens.
I am in good correspondence with the Commonwealth Bank about its new establishment in Malta, which is no longer seen by the EU as a tax haven but is by the US congress. Nevertheless, the problem here is that the millions, if not billions, of dollars being avoided in tax through the use of tax havens has to be paid for by other, dinkum taxpayers in Australia, and it should be stopped.
That the motion (Senator Bob Brown’s) be agreed to.