HON. WAYNE SWAN MP
FEDERAL MEMBER FOR LILLEY
CONSTITUENCY STATEMENT (BHP TAX EVASION)
FEDERATION CHAMBER, CANBERRA
WEDNESDAY 10 NOVEMBER 2016
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Rampant tax evasion is now a structural cause of political polarisation and growing inequality, globally and within our country. It is a huge part of the trashing of public faith and legitimacy of democracies around the world. Everyday workers have the sense that the economy is an inside/outside game where the wealthy play by very different rules and everyone else is denied opportunity.
Over the past decade, the behaviour of BHP and other multinational companies has shattered public faith in our political system. We have heard about trickle-down economics, but it has an older and uglier brother. This is the straight rip-off, where companies refuse to play by the rules, and their cronies simply look the other way. It is clear that, over a decade, there has been a culture of tax avoidance at BHP, and they have sought to evade tax on $5.7 billion held in their Singapore tax shield. Not only have they flouted federal tax law; they have also behaved disgracefully in seeking to avoid state royalty payments through transfer pricing. BHP have been using a Singapore tax shield to smuggle profits out of Australia. Mr Beavan, their chief financial officer, may choose to cutely describe aggressive transfer pricing as a 'valuation dispute', but, in my world and the world where working Australians live, this is tax evasion.
We have yet to hear from the BHP board any cogent defence or contrition for their actions. It is clear that board members of BHP have not been true to the values they espouse in their charter of corporate responsibility. The board will be meeting in Brisbane on 17 November. This will be an opportunity for the BHP board to explain to the people of Queensland their actions in seeking to evade $300 million in royalty payments through transfer pricing. The governments of Western Australia and Queensland have been treated very poorly by BHP. If BHP are so confident in their legal position, it is an opportunity to explain why they have increased their provisions for taxation disputes. Their recent accounts added US$570 million in expenses to repay the federal government for income taxes and the state governments for royalties which they should have paid in the first place.
The evidence against BHP is damning. Over a decade, they have ramped up their Singapore marketing hub to camouflage aggressive transfer pricing. Historically, BHP have wrapped themselves in the Australian flag. Now that the truth and scale of their activities are before the Australian people, it is imperative that they outline a new, ethical approach that repudiates their tax-avoiding past and sets an example for other corporates well into the future. Failure to do so will mean that the 'Big Australian' will henceforth be known as the 'Dishonest Australian'.