Wednesday, 11 September 2019
Questions without Notice
My question is to the Minister for Defence. I'm sure the minister is aware that there are a number of companies under her portfolio who appear not to be paying tax. I'll give an example from tax transparency data. BAE Systems Australia Holdings Limited, over the four years of tax transparency data, had an income of $3.9 billion and paid zero dollars in tax. What assessments, if any, has your department made of the tax practices of large Defence contractors, who appear to be experts in minimising their tax payments here in Australia?
I thank Senator Patrick for the question. I'm sure Senator Patrick will be delighted to know that from 1 July this year, under recent changes to Defence policy, tenderers must provide a certificate, from either the ATO or its foreign equivalent, of their tax standing. This also applies now to first-tier contractors, and companies cannot tender without it.
Is it not the case that the defence department is signing contracts directly with companies registered in tax havens? Is it not the case, for example, that Defence has a contract, with a value of almost $500 million, with Intelsat LLC of 90 Pitts Bay Road, Pembroke, Hamilton, Bermuda? What measures does Defence have in place to ensure Defence does not engage contractors registered in identified tax havens?
I thank Senator Patrick for that question. Normally, I would have thought, that question would have gone to the representative of the Treasurer in this house. However, I am very proud of this government's record in getting multinationals to pay their fair share of tax. We are global leaders in the international fight against corporate and multinational tax avoidance. In fact, Senator Patrick might be interested to know that since 1 July 2016 the ATO has raised about $13.5 billion in tax liabilities alleged against large public corporations and multinationals. Of that amount of money, $8.6 billion in tax liabilities is from multinationals.
On the point of order: to be directly relevant to the question, one must be relating to part of the question asked. Context is always available to ministers, but I'll remind the minister, as Senator Patrick has reminded her, of the specific nature of the question.
I suspect Senator Patrick didn't hear the answer to his first question, because I actually answered the question very clearly in relation to the defence department, and I'll repeat what I said in answer to the first question: from 1 July this year, under recent changes by this government to defence policy, tenderers are to provide certificates of satisfactory— (Time expired)
It is not unlawful for Defence to sign a contract with an entity in a tax haven, and they can fill in the forms and they can still be awarded the contract. But I don't think it's acceptable for most Australians, who want companies to contribute to our social structure, to our defence and so forth. What are you doing specifically in relation to preventing us encouraging contracts with entities in tax havens?
Noting most of that was a statement rather than a question, I will refer you to my first answer: that this minister, under this government, has changed defence policy to ensure that we do validations of the good standing, the taxation standing, of companies that we do business with.
I very much thank Senator Hughes for that question. I can confirm for all in this chamber that the Morrison government is absolutely committed to the security, stability and prosperity of Australia. That's why this government is investing $90 billion in our national shipbuilding endeavour. We are an island nation. We rely on maritime trade for our prosperity, and that trade requires a secure maritime environment. With an estimated 300 submarines expected to be operating in the Indo-Pacific region by 2035, submarines are an enduringly important strategic capability for Australia.
Today that capability is very ably provided by a fleet of six Collins class submarines that is providing extraordinary service to our nation. Three of the six submarines are consistently available now for tasking, with one in shorter-term maintenance and two in long-term maintenance and upgrades. The Collins class submarines incorporate the most advanced technology of any conventional submarine and continue to excel in their operations in a way that should make all Australians incredibly proud.
We are now pursuing the next generation of submarine, the Attack class, which is the centrepiece of our naval shipbuilding enterprise. Like Collins, the Attack class submarine will retain that competitive edge in our submarine capability in future. But, as we construct 12 new Attack class submarines, this government will be putting in place a very prudent transition plan to ensure that the effective operation of our submarine fleet in this increasingly contested environment remains in place. The delivery of our submarine capability is a key priority of government, and it is my most solemn of duties to make sure that this project is delivered and we receive the capability our nation requires.
Yes, I can, Senator Hughes. The Collins class submarine continues to achieve Royal Australian Navy requirements. The Collins class submarine is technically only halfway through its life and remains a highly potent and capable platform. But, to manage the transition between the Collins class and the delivery of the first Attack class, we will conduct life-of-type extensions to the Collins class submarines. That's why this government will continue to sustain the fleet with a regime of intermediate and mid- and full-cycle dockings. This means that the Collins class submarines are spending more days at sea today than ever before. They're conducting more exercises and are participating in more operations that directly contribute to our nation's defence capability and our security. The government has 12 active Collins-related major capital projects, including communication upgrades and sonar upgrades, which will continue to extend the life of the Collins and continue to make it a capability that Australia requires. (Time expired)
Thank you very much, Senator Hughes. I can assure the Senate that this government is absolutely focused on maximising the level of industry involvement in all our shipbuilding programs. The Morrison government is the first government to put faith in the Australian defence industry as a fundamental input to capability. It is in our nation's interest that all states and territories are capable of contributing to the shipbuilding and sustainment endeavour—that all states contribute. And 15,000 Australian workers will be at the forefront of modern naval ship design and construction practices, creating new opportunities for defence and adjacent industries. Our Attack class program will be built upon a framework of agreements between Naval Group and ASC which identifies ways that both can collaborate to support Australia's sovereign submarine capability. Mandating a minimum proportion of Australian industry is actually counterproductive, as it focuses on measurements rather than a proper industry engagement to that sovereign— (Time expired)