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Costello's admission: Switzerland has vetoed the government's only plan to stop abuse of tax havens.

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David Cox MP

Shadow Assistant Treasurer Member for Kingston Contact: David Cox 0418 847 830 or Angela Jackson 0439302987


The Treasurer’s admission in question time today that Switzerland and three other countries have vetoed the OECD Project on Harmful Tax Practices means that the government’s response to tax havens has collapsed.

Tax havens help individuals avoid Australian tax by not requiring disclosure of the activities of companies and bank transactions.

The government’s entire effort to stop people using tax havens to avoid tax was based on the OECD Project on Harmful Tax Practices.

On 14 February 2003 Mr Michael Carmody, Commissioner of Taxation, in answering a question on the ATO’s response to tax havens gave the following response:

Let me give you details of some of the actions that have been taken. At the broad level on tax havens the Australian Taxation Office has been a prevalent party in the development of the OECD initiatives.

While this process was never going to be a total solution, it at least gave the impression that the government was doing something. Now even that mirage has evaporated.

Now that Switzerland, the most well known tax haven, has vetoed the OECD’s disclosure proposal, the mirage of action is over.

Over $5 billion in funds flowed from Australia to tax havens in 2001-02, there is a serious problem that requires a serious response.

When will this government move to ensure that all Australians pay their fair share of tax and that ordinary taxpayers are not left to carry the tax burden?

The highest taxing government in Australia’s history is doing nothing to alleviate the burden on ordinary taxpayers, but they have no plans to stop wealthy tax cheats.

3 November 2003 CANBERRA