Rex Patrick (SA, Centre Alliance) Share this | Link to this | Hansard source

As I've outlined in a previous speech, I aim to put the spotlight on a number of Australian businesspeople who play important roles in our nation but who rarely appear in the headlines. Another such quiet Australian is Catherine Leigh Tanna, a highly successful business executive and a leader in Australia's energy sector. She was born in Innisfail in 1961, raised and educated in Gladstone. She is a law graduate of the University of Queensland. Ms Tanna has had a highly successful career in the resources and energy sector. As a qualified solicitor she started out with BHP petroleum before joining Royal Dutch Shell, where she held increasingly senior positions in Australia, the Americas, Africa and Asia between 1998 and 2009.

Ms Tanna then joined the British multinational oil and gas company BG Group as a senior executive and went on to lead the development of the Queensland Curtis LNG project in Gladstone, one of BG Group's larger investments worldwide. While working for BG Group, Ms Tanna also took on another important role. In 2011 then Treasurer Wayne Swan, a fellow Queenslander, appointed Ms Tanna to the board of the Reserve Bank of Australia. In announcing her appointment, Mr Swan praised Ms Tanna's understanding of Australia's resource sector and deep knowledge of global financial markets. Ms Tanna was initially appointed for a five-year term on the Reserve Bank Board. In March 2015 then Liberal Treasurer Joe Hockey extended Ms Tanna for a further five years, which will expire in March next year.

Ms Tanna's standing as a business leader has been recognised in many ways. She chaired Q20, a peak group of Queensland business leaders responsible for maximising benefits from the 2014 G20 leaders summit in Brisbane. She is also a member of the Lowy Institute's G20 advisory committee. She served as the director of the 2018 Commonwealth Games Corporation and as a board member of the Catholic Foundation of the Archdiocese of Brisbane. She is a recipient of the University of Queensland Vice-Chancellor's Alumni Excellence Award and an honorary Doctor of Business. Ms Tanna is a member of the board of the Business Council of Australia.

This is an impressive career, which is well recognised and applauded by the business community and by the Australian government. There is, however, a deeply shameful side to Ms Tanna's career—something quite at odds with her standing as a business leader. In May 2014 EnergyAustralia, Australia's third-largest electricity and gas retailer, announced that Ms Tanna would become its managing director. She continues to hold that position today. Notwithstanding its name, EnergyAustralia is a wholly foreign owned company. It's a subsidiary of Hong Kong-based China Light and Power, CLP Group, an industrial empire controlled by billionaire businessman Mr Michael David Kadoorie. Aside from serving as managing director, Ms Tanna is a director of EnergyAustralia Holdings Pty Ltd, which serves as the Australian entity's primary link with CLP Group.

At the time of her appointment, Ms Tanna declared that she would continue EnergyAustralia's 'fast trajectory of growth' and 'exceed the expectations of our 2.7 million customers'. Of course, in recent years the prices paid by Australian energy consumers have skyrocketed. Customer expectations have been exceeded—though not in the way many would wish for—when they look at their latest electricity or gas bill!

EnergyAustralia's business has certainly been booming. According to figures released by the Australian Taxation Office in December last year, EnergyAustralia Holdings Ltd generated an income of some $8 billion in 2017-18. However, by the time Ms Tanna's accountants and tax lawyers had finished their job, EnergyAustralia's taxable income was down to a mere $368 million, just 4.8 per cent of the total income. The tax payable by EnergyAustralia was just $69 million, less than one per cent of total income. Many Australians would love to pay a tax rate of less than one per cent. But that's not the full story. Over the four previous financial years, from 2013-14 through to 2016-17, the company generated more than $30 billion in income, but the taxable income was a mere $52 million and the tax payable was precisely zero. That's it—zero tax. That's EnergyAustralia's tax story—four years of zero tax and then just a pittance paid. It's tax dodging on a grand scale.

How does EnergyAustralia's managing director, Catherine Tanna, do this? Well, it helps that EnergyAustralia is owned by a company in the infamous tax haven of the British Virgin Islands. Although many details are deliberately obscured, EnergyAustralia's profits are washed through the Caribbean before ending up with the CLP Group in Hong Kong, while massive loans from related parties offshore siphon off profits through interest and other payments. The big winners are CLP Group shareholders in Hong Kong and EnergyAustralia executives. CLP's corporate records show that Ms Tanna, as managing director, received remuneration in 2018 of some HK$24 million—that's approximately A$4.5 million—and a further long-term payment of $2.2 million was earmarked for 2019.

Ms Tanna is a well-paid executive—well able to afford her large and architecturally striking home in Grattan Street, Hawthorn, in Melbourne. That said, her Chinese owned company's tax position really doesn't sit well with the Business Council's policy on company tax compliance and integrity, which states:

… companies must meet their tax obligations and where arrangements do not keep pace with community norms, they should be reviewed.

I don't think anyone would view EnergyAustralia's pittance of tax paid as consistent with community norms. Ms Tanna's presence on the Business Council's board directly undercuts the council's credibility in discussions of company tax policy. She should resign or be removed from the board.

Even more serious, however, is Ms Tanna's presence on the Reserve Bank Board. The board's responsibilities are set out in the Reserve Bank Act 1959 and include management of monetary and banking policy to advance the economic prosperity and welfare of the people of Australia. As the bank itself emphasises, over and above legislative requirements, board members also have responsibility for maintaining a reputation for integrity and propriety on the part of the bank. The board has a code of conduct which provides that board members will observe the highest possible standards of ethical conduct and, among other things, work to enhance the bank's standing in the community and its reputation for integrity. Catherine Tanna is the managing director of a company wholly owned by a Chinese conglomerate which has profited massively from Australian consumers and households whilst arranging its international financial affairs to minimise its tax liabilities in Australia to a massive degree. It is impossible to reconcile Ms Tanna's position as a well-paid facilitator of extraordinary tax minimisation with her responsibilities with the Reserve Bank. Her position is akin to that of a fox guarding the henhouse. It is a disgrace that such a person—an international corporate tax dodger, a swindler—fills a seat on the Reserve Bank Board.

Independence of the bank is an important principle enshrined in legislation. The Treasurer cannot force Ms Tanna's resignation. But, in light of EnergyAustralia's tax performance while Ms Tanna has been the company's managing director, he should seek her resignation and she should resign forthwith. Catherine Tanna has a year to go on her current employment, but she should go right now. We can't have a corporate tax dodger on the Reserve Bank Board; it's as simple as that. Companies do not dodge tax; their directors do. I'm calling them out. Ms Tanna, today, joined my who's who of corporate scumbags and swindlers. There will be more directors added to that list in due course.