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Monday, 22 September 2014
Page: 10070


Mr HOWARTH (Petrie) (10:51): There are many things that stand in the way of advancement for developing countries. The media highlights famine, civil war, a lack of resources, disease and in some cases unelected governments and dictators. These are all very unfortunate factors, but there are other factors that come into play, and one in particular did not get the attention it deserves until more recently. This factor, this hurdle, is tax avoidance and evasion, and it drains developing countries of vital revenue they need for development and for the reduction of poverty.

I had the pleasure of meeting Simon Kennedy, a constituent in my electorate of Petrie who was highly involved in the Micah Challenge. The group recently attended Parliament House and conducted some information sessions, and I met with them there. I learned that according to research undertaken by the UK aid and development agency—Christian Aid as well—multinational companies cheat developing countries out of at least $160 billion in tax revenue every single year. That is a significant amount of money.

It is important for companies to pay tax in the countries in which they operate so that they give back to those countries and help them develop. Tax revenue can help make governments accountable to their citizens, while aid can make them accountable to the interests of foreign donors. A country's sovereignty, of course, is important, so it is important that they have a good tax base to pay for the infrastructure, defence forces, health services, federal police and other federal government responsibilities that will help developing countries build the infrastructure and create the jobs and everything that they need in those areas.

Of course, it may be legal for some of these multinational companies to shift their tax, but morally it is probably bankrupt. This year the G20 will work to develop a road map to assist developing countries to overcome obstacles to exchanging tax information with other countries. This will help developing countries address tax evasion. The summit will also produce a report outlining the unique impacts of base erosion and profit shifting in low-income countries and what the G20 can do to assist developing countries to overcome these. We are making sure developing countries can participate in the G20, and I look forward to the summit's outcomes.