HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
CONSTITUENCY STATEMENT (BHP TAX EVASION)
FEDERATION CHAMBER, CANBERRA
WEDNESDAY 19 OCTOBER 2016
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Last week I spoke about BHP's tax evasion and the use of a Singaporean tax shield. On 17 October, Matthew Stevens in the Australian Financial Review made the comment that because BHP was a large Australian taxpayer it was entitled to evade tax on some of its earnings. Mr Stevens apparently thinks it is okay for BHP to seek to avoid paying tax on all the profits of $5.7 billion held in their Singaporean tax shield. In my view, it was their duty to pay this tax, as it is of any taxpayer, corporate or individual.
Given BHP's aggressive transfer pricing, it is little wonder that the government of Western Australia is considering imposing a new royalty levy, given BHP has evaded taxes of in excess of $300 million in royalties in Queensland and an unknown amount in Western Australia. It is now clear that for over a decade there has been a culture of tax avoidance in BHP, so I asked the question: why have they been using aggressive transfer pricing to evade their legal responsibilities to the people of Queensland and Western Australia and, if they are so confident of their legal position, why have they increased their provisions for taxation disputes and added US$570 million in expenses to their accounts to repay the federal government for income taxes and the state governments for royalties which they should have paid in the first place? The governments of Western Australia and Queensland have been treated very, very poorly by BHP.
BHP cannot claim to be transparent, given their failure to clearly outline numerous back payments to the Australian Taxation Office as a result of tax audits over a decade. BHP are like that guest at the hotel. They have rented the penthouse, they have had full room service, but then they run off and leave a bill because they only paid for a standard room. BHP has always presented itself as a model corporate citizen. Its behaviour, and this behaviour, destroys the morale of people who paid tax, who then come to believe that the government treats them with contempt by penalising them whilst sparing the powerful and the wealthy.
The dummy spit by BHP executives in London last night is yet another example of how out of touch corporates are with ordinary people and why, around the world, many corporates are held in such low regard. This sort of behaviour more than anything is why people have lost trust in politicians and business leaders. This loss of trust is fuelling political polarisation and instability. The board of BHP should provide a full and frank explanation of its role in approving this aggressive transfer pricing. As I said in this House last year, I speak not to bury corporations but to beseech them. Their exposure provides an opportunity for redemption and they should give a full and frank explanation.
