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Monday, 9 November 2015
Page: 8048


Senator LEYONHJELM (New South Wales) (21:19): I rise to oppose the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015. I suspect I will be the only parliamentarian to do so.

It is easy to throw stones at corporations. Even though a corporation is just a collective of individuals pooling their resources to make stuff, 'corporation' is still a dirty word. It is even easier to throw stones at multinational corporations. To be multinational just means you sell your stuff to willing buyers in more than one country. But 'multinational' still serves as an effective dog whistle for those who do not like foreigners. And it is easier still to rail against tax avoidance. After all, we should all pay our fair share.

The thing is, we have tried to define what a fair share is in tax law, and the multinational corporations have paid that fair share. As it happens, we set the bar high when we defined what a fair share is. Australia gets more corporate tax as a share of GDP than any other OECD country apart from Norway. We have passed tax laws that tell multinational corporations what tax rate they must pay, what revenue needs to be taxed and what expenses are to be deducted. So, if our idea of what a fair share is has changed, we should legislate changes to the tax rate, to what we mean by 'revenue' or to what we mean by 'expenses'.

The legislation before us today does nothing to change the tax rate, what we mean by 'revenue' or what we mean by 'expenses'. It just says that, if you are a large multinational corporation who has paid the legislated tax rate, you have still broken the law if you have done anything with the purpose of getting a tax benefit. The ATO and courts will decide whether you have broken the law, after the fact, in an unpredictable, arbitrary and ad hoc way. This is the justice of a kangaroo court.

What makes this even more farcical is that we already have a despicable rule that says you have broken the law if you have done something that is otherwise legal but that is done with the purpose of getting a tax benefit. It is called the general anti-avoidance provision. It applies to everyone, including multinational companies. No wonder the government has struggled to identify any increase in revenue that will arise with the passage of the bill before us today. It is nothing but grandstanding.

This bill is targeted at companies like Google, Apple and Microsoft—businesses that generate ingenious goods and services from places that are as far away from Australia as you can imagine. Even when their products came in plastic wrapping, which not many do now, Australia did not even provide the plastic that surrounded the cardboard that encased the shiny product. And we have absolutely nothing to do with the science, marketing nous and entrepreneurship that made those products possible. The idea that anything more than a tiny fraction of the sales revenue should be treated as Aussie-grown profits is jingoism worthy of the most embarrassing xenophobe.

It is obvious that companies set up their offices, base their intangible activities, and book their profits, in low tax jurisdictions. Places like Singapore are teeming with business shirts, even though it is a place where the humidity never drops and your shirt sticks to your back. The business-people of the world would much prefer to do their business in Australia, with its beaches, open spaces, cool sea breezes, and great coffee. So will someone please think of the business-people and halve our corporate tax rate!

Making life harder for multinationals in a competitive market and expecting more revenue is like punching someone in the nose and expecting them to like you more. Instead, we should remember that big corporations are kept in check by competition. But there is no competition with big government, which has the unique power of being able to take your money by force.