Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Finance (Senator Cormann) to a question without notice asked by Senator Whish-Wilson today relating to tax avoidance.

Listening to coalition Senators Fawcett and Cormann during question time talk about the need to reduce debt for future generations of Australia, I hope they take seriously the question I asked about tax avoidance by large multinational corporations especially, but also by wealthy individuals who shuffle their money offshore through all sorts of dodgy means to avoid paying their fair share of tax.

Micah Challenge is one group I mentioned in my question. I think a lot of people in the Senate will have met with them in the last week. They come here every year. They are a global Christian group that is targeting the Millennium Development Goals—the reduction of poverty by 50 per cent by 2015. Often they come and talk to us about the need for more foreign aid, which sadly has been used as an automatic teller machine by respective governments in this country every time they need to cut debt. What they have targeted this year, and will be continuing to focus on around the G20, is this issue of tax avoidance. They outlined the numbers to me. Developing countries lose $160 billion of revenue through tax evasion every year.

Unfortunately, Senator Cormann could not tell me what is at risk in Australia, or what Treasury or the Tax Commissioner thinks is at risk in Australia. I have read some estimates. It is certainly billions of dollars per year. No doubt through the G20 process our government is going to pursue this aggressively to share information with other countries, so we are in a position to target and pinpoint where this tax evasion is occurring both through multinational corporations, in issues such as profit shifting, and through systems such as the common reporting system—CRS—which is going to be on the agenda in the September meeting of the G20.

That is a system that relies on financial institutions to set up a process where they can actually share information between other countries. That is going to require them to put in place new systems. I would certainly be interested, from the government's perspective, in whether they are just consulting with large financial institutions, in relation to implementing something like CRS, or whether it is going to go to broader stakeholders. Whatever the issue and whatever the process, tax evasion is a very serious issue. I asked the ATO during Senate estimates about numbers such as $500 billion of revenue. That is $500 billion of revenue that is at risk from tax avoidance and tax shuffling. To put that in perspective, that would certainly pay for several years budget cuts in this country if we were to start looking at how we might reduce tax avoidance. It is a significant amount of money.

The question I asked today has been publicly reported. It was about Glencore Xstrata, which is one of the largest mining companies in the world. It has had $15 billion worth of Australia operations over three years, primarily in coal, and pays almost no company tax. Is that true? These are the sorts of answers that Micah Challenge are chasing, as are the Greens and no doubt all senators in this chamber who are concerned about the issue of tax avoidance. It is something the government has said that they are taking seriously. I have heard it from a previous senator in the chamber, Barnaby Joyce. I have heard it mentioned publicly by a number of coalition senators.

I think it is a significant matter of public interest not just because it helps us in terms of revenue and retiring our debt but because it also allows a sense of fairness to pervade particularly those groups who are looking after the impoverished and the disadvantaged, like Micah Challenge. Also, the Oaktree Foundation: we have a number of stakeholders who come into parliament to talk to us about how we can help the poor internationally and in this country. An area like tax avoidance is going to be very important.

Is it part of our global trade negotiations and our bilateral talks that we have in other countries? Is it included in these large, complex arrangements? Do we talk about issues such as multinational profit shifting and tax avoidance by high-net-worth individuals? Can we come up with better structures to make sure that the wealthy do not dodge their tax? That is that revenue that is so desperately needed to pay for hospitals, to pay for education and to tackle issues such as homelessness in Australia. Rather than unfair and cruel budget cuts to the people who can least afford it, why don't we take on large corporations and the amount of tax they are paying? I am not sure why a company like Glencore Xstrata could pay virtually no Australian tax. It does not make sense to me. We also know that the government has got rid of taxes through mining taxes and through prices on pollution. (Time expired)

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The question is that the motion moved by Senator Whish-Wilson to take note of the answer by Senator Cormann be agreed to.

Question agreed to.