Speech - Private Members Business (Multinational Profit Shifting)






TUESDAY, 24th MARCH 2015

Mr Deputy Speaker,

I would like to commend Dr Leigh on moving this motion but lament the fact that we need this motion in the first place.

The Labor Party is and always has been committed to ensuring that everyone including large multinational companies and wealthy citizens pay their fair share of tax so that working families and small business aren’t disadvantaged by having to take on a higher burden of taxation in the future.

We need to ensure not only that our system remains competitive and attracts investments, but that our system is fair and progressive.

That’s why during my time as Treasurer, when we detected major structural problems emerging, which were enabling BEPS to occur, we acted. We worked hard with the Treasury to develop a range of reforms which addressed aggressive tax structures that sought to shift profits overseas by artificially loading debt into Australia and closed other loopholes which enabled BEPS to occur.

Further, we improved tax coordination between authorities and 90 per cent of information exchange agreements were signed under Labor governments, this includes information sharing which prevents people from avoiding tax by hiding money in Swiss bank accounts.

Most of the loopholes we closed were introduced under the Howard Costello government and some of them have now been reintroduced under this government.

These actions resulted in a comprehensive package of measures in the 2013 Budget that were expected to make the budget $4 billion better of over the forward estimates.

One of Treasurer Hockey’s first steps following his election was to start dismantling this package and a give a green light to BEPS.

This is a government which has caved to corporate interests from day one. The Treasurer has already handed back $12 billion in tax revenue to multinational mining and power companies and wealth superannuants.

So it wasn’t surprising that it gave away over $1 billion to multinational companies originally contained in our BEPS package. 

Mr Deputy Speaker, maintaining an effective, progressive and robust corporate tax system requires the attention of a vigilant government that is both capable and willing to respond to changes in the domestic and international economy.

All of this has occurred at the same time the Government has doubled the deficit and unfairly slugged pensioners, students and the sick in the budget with welfare cuts and tax increases.

This is a government that is strong on taxing the weak and weak on taxing the strong.

The Government’s first step if it was serious about charting a path to surplus would be to stop cutting its own revenue and looking after its wealthy supporters.

None of this should come as a surprise. One only needs to look at the Coalition’s voting record to see they have a track record of giving the green light to tax evasion.

Those opposite voted against every amendment the former Labor Government introduced to close down corporate tax loopholes, including the Counter Tax Avoidance and Multinational Profit Shifting Bill 2013 and The Cross-Border Transfer Pricing Bill 2012.

The Government has talked big about getting tough on multinationals but then said we shouldn’t go it alone, that we need to wait for other countries.

Well, Mr Deputy Speaker, the Inclusive Prosperity Commission co-chaired by Ed Balls and Larry Summers makes this very important point: “While international action is needed to tackle avoidance, multilateralism must not be used as a pretext for inaction.”

Mr Deputy Speaker the Coalition’s attitude to BEPS lies at the core of the Coalition’s political and economic strategy. The Coalition has deliberately blow out the deficit as a lever to seek public permission for the harsh spending cuts it had always planned to do but was not up front with the electorate about prior to the election.  

A balanced approach for returning to surplus will require both revenue and spending initiatives.

The Coalition has created a revenue problem. Part of the Coalition’s revenue problem is directly attributable to their own actions in giving tax breaks to their mates.

Labor on the other hand has a proud history on tax reform.

We reduced the corporate tax rate under Hawke-Keating from 46 to 36 per cent by broadening the tax base. 

We built on this by introducing a carbon tax on polluters and a mining tax to rebalance the economy and spread the benefits of the mining boom.

And we acted on BEPS.

It speaks volumes that this Government allows multinational companies to exploit tax loopholes while at the same time unfairly slugging pensioners, students and the sick.  It is increasingly clear that this is what they mean when they say ‘Open for Business’.