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Monday, 25 June 2018
Page: 3695

Senator WHISH-WILSON (Tasmania) (10:30): I rise to say the Greens will be supporting this Taxation Administration Amendment (Corporate Tax Entity Information) Bill 2017 today, and we will be moving amendments in the committee stage to improve this bill. It is often said that in Australia we have a tax-and-transfer system: people pay their taxes, and then those taxes are transferred to pay for services such as schools and hospitals. But the Greens have often argued that in Australia what we have, in effect, is a tax avoidance system. I'm very proud to represent a political party that has led on this issue in this Senate, in the last five years especially.

In fact it was in 2014, nearly five years ago, that previous leader of the Greens senator Christine Milne initiated a groundbreaking Senate inquiry into tax avoidance in Australia, an inquiry that ran over a number of years and produced some very strong recommendations. Many of those recommendations and much of that witness evidence have been used to implement legislation in this place to tackle the issue of tax avoidance. I give a shout-out to those stakeholders that came to visit us in parliament in 2013, 2014—stakeholders such as Micah Challenge, an umbrella group of activists in their own way, I suppose you could say, who wanted to see changes to tax laws, to prevent tax avoidance, which of course punishes the poor; and Tax Justice Network, who have campaigned tirelessly to see laws improved.

It was interesting to listen to Senator Macdonald's speech. He actually surprised me this morning: he did a reasonable job of getting his mind around the issues. He outlined what the government have done, during their term, around some significant pieces of legislation. What he omitted, of course, was that that legislation wouldn't have passed without the help of the Greens and all the work that we've done to tackle this issue.

I need to step through the history behind why we have this bill here before us today. I know corporate knowledge tends to get eroded very quickly in this place not just in the chamber but also in the broader community and the media. This bill dates back to another bill, in June 2013, in the dying days of the Gillard government. Labor put forward the Tax Laws Amendment (2013 Measures No. 2) Bill 2013, requiring the public reporting of information on all companies—that is, private and public companies—earning over $100 million, and that passed into law. Those original Labor laws aligned the thresholds for public reporting by entities with basic tax and income information at $100 million. I'm not sure why that $100 million level was chosen; nevertheless, it passed into law. The Greens supported that bill—of course we did. We voted for it both here in the Senate and in the other place.

That act was repealed when the Abbott government came into office. They introduced a bill to remove private and public companies from any public reporting requirements. Of course, the Greens opposed that bill. Here's where it gets a little bit tricky. On 15 October 2015, the bill to repeal Labor's laws relating to tax transparency snuck through this Senate. I say 'snuck' very carefully. I was sitting in the chair as acting deputy president when the bill was being debated, and the speaking list collapsed. A critical piece of legislation from the coalition government passed the Senate without even a vote; it went to the voices. The speaking list collapsed, Labor didn't call for a division—I would have if I hadn't been in the chair, but that's where I was—and it passed without even a vote. That surprised a lot of people.

An opposition senator interjecting

Senator WHISH-WILSON: You can go to the video and have a look at it if you want to see what did happen on that day. It surprised a lot of people, especially some of the stakeholders and the media, and of course I was very angry. Personally, I was very angry that we didn't have a fight on that bill, because such a critical piece of legislation was being repealed. I pay tribute to Labor for bringing those laws in when they were in government in 2013.

Not long after that, through the Senate inquiry process where we looked at significant pieces of legislation we could use to tackle multinational tax avoidance, the government, in December 2015, brought before this place a bill called MAAL, the multinational anti-avoidance law. I put up an amendment to MAAL—it was a bit cheeky—that had been in Labor's entire $100 million tax transparency package because I thought that was an opportunity for us to get it back. Unfortunately, that was voted down in the House, but, after some significant debate in this place, the government agreed that they would include a tax transparency measure in their bill along very similar lines to section 3C, which provides for annual information that companies have to make available for private and public entities, but they wouldn't come at $100 million. They agreed that they would make companies over $200 million in size disclose their financial affairs. That included around 218 or so of the largest companies that weren't disclosing their affairs. It wasn't what we wanted, but, at the same time, it allowed for the beginning of disclosure, and it allowed the MAAL, the multinational anti-avoidance law, to pass, which gave the ATO, the Australian Taxation Office, significant new powers. It provided, for the first time, country-by-country reporting, which is absolutely critical to tackle things like base erosion and profit shifting. More importantly, it forced companies over $1 billion in size to provide general purpose financial statements, not the flimsy special purpose statements that they'd been using to avoid disclosure in the first place.

We worked with the coalition. The Labor Party campaigned against that legislation and against the Greens' move to include tax transparency in the legislation. In the end, we got the legislation through this place, but not without a big fight and a lot of mud throwing, may I say. Indeed, I remember a billboard in Sydney that said that the Greens voted against tax transparency, even though we were the ones who brought it back, got it on the agenda and got laws passed—but there you go. That was a Labor billboard smashing up the Greens going into the 2016 double dissolution, although we did all that great work. Four years of Senate inquiries supported the government in their legislation, improved their legislation and introduced tax transparency—and we had the mud thrown at us. But still, with the adults in the room, we got the significant package through, and we get the chance today to work together to improve the government's current laws, and that's a good thing: the Greens working with Labor and hopefully with the crossbench and even the Liberal Party. Labor have been happy to introduce tax transparency laws in the past for companies with over $200 million; why not $100 million? In fact, why not even $50 million? Transparency is a good thing. If you've got nothing to hide, why be worried? That's the simple principle that applied to companies with $200 million. It should equally apply to private and public companies with over $50 million. Personally, I'd like to see all companies disclose this kind of information, but this would be a really good start in terms of statistically capturing a much larger number of companies.

We now have the multinational anti-avoidance law, the MAAL. The ATO told us at Senate estimates they're proud that they've been able to bring in $4 billion to $5 billion in new revenue because of this legislation. It would have been avoided previously. That revenue is absolutely critical to pay for the education of our kids, for public hospitals and for our social safety net, such as Newstart or pensions. With that tax and transfer, at least we have made some gains in actually taxing the companies that were avoiding their obligations—their obligations to all Australian taxpayers. Let's face it, if you don't pay your tax in this place as an individual, the tax office will come down on you like a ton of bricks, and so they should. Why is it that big multinational corporations have been getting away with avoiding paying tax?

Well, they need more changes, because—unfortunately, while it may be unethical and immoral—it wasn't strictly speaking illegal until we changed the laws in this place.

On that point, the Greens at the last federal election took a package around multinational tax avoidance that included another 18 policies we want to see implemented in this place for a total crackdown on big companies, big wealthy corporations, not paying their fair share, which is totally unacceptable. While we acknowledge we have made some gains, and we can do so again today, there is still a long way for us to go.

I want to talk about the legislation we would like to improve with amendments. The debate in 2015, those of us that were here would remember, wasn't quite a Senate sleepover, but it was very close to it. I think we went until three or four in the morning debating this legislation. It wasn't a pretty time. My voice was hoarse from yelling. We were all getting a little bit wound up because we wanted to see these tax laws passed.

Previous senator Ricky Muir put up an amendment to remove grandfathering clauses. Let me tell you a little bit about grandfathering. Grandfathering basically allowed nearly 1,500 companies, private companies, to essentially be exempt from filing reports to the corporate regulator, ASIC. These grandfathering arrangements had been in place since the Keating government in 1995. It was the Labor Keating government that exempted these 1,500 companies from publicly reporting. There was no political will from Labor or Liberal in this place to change that. Senator Muir moved that amendment, but the Greens pointed out at the time that the government wouldn't pass any of the legislation if the grandfathering were brought in. The Liberal Party didn't want to see their rich mates disclosing their financial information, and it was going to be a deal-breaker.

It was a difficult choice for us. I confess today, as I did at the time, it was difficult. We would have liked to have seen those grandfathering exemptions removed, but it meant that the multinational anti-avoidance laws and the new Greens tax transparency laws that we brought in wouldn't have passed this place, and the tax office and our stakeholders desperately wanted those laws passed. The reason we had the debate in December was that they needed to be passed by the new year of that year for the government to be able to get the country-by-country reporting in place. That country-by-country reporting was absolutely critical.

So we had to vote down previous Senator Muir's amendment around grandfathering. But what I said that night in the Senate—and I said it publicly to the media—was that the Greens would make a commitment to coming back to this and, at the right time, we would remove the grandfathering exemptions. We will be moving an amendment to do that today. True to our word, we want to see all companies filing those annual reports. There's no reason at all for that exemption to be in place. It's a historical precedent that's been a bad precedent because it is not transparent; it's the opposite of transparent. We would certainly be hoping that Labor would support the Greens amendments and that we can actually get that archaic exemption removed in our tax transparency laws.

What else does this bill seek to do? It seeks to reinstate Labor's threshold of $100 million. As I said previously, the Greens would support that. We would have liked to have seen $100 million in our amendment in 2015 to the MAAL laws, but the government wasn't going to come at that. So we're quite happy to support lowering that to $100 million. We've had discussions with the Labor Party about lowering it even further to $50 million, and I'm hopeful they will support that amendment to go a step further and increase tax transparency. There's no reason that companies shouldn't be transparent in their reporting. There's no reason at all. Given what they have to file privately for the tax department anyway, you can't claim that is extra red tape. You can't claim that somehow it increases the burden on companies' reporting requirements. If anything, it's for our agencies to provide it in a format that makes it publicly available.

A whole range of people out there, many I have mentioned already, came to parliament nearly five years ago to ask us to act on things like tax transparency. It allows journalists and other public-good advocates in this area to access information and to do that analysis. Let's be frank. As senators we're very busy. We cover a lot of different areas. But many of these advocates do it full-time and many of them do it voluntarily, because they care deeply about a fair tax system where everybody pays their fair share of tax.

There's no reason at all that this kind of information shouldn't be publicly available to help shine a light on potential tax avoidance. I think Senator Cameron mentioned that one in five large private companies has been avoiding paying their tax. I don't know where that statistic comes from but the risk is there. If you can't see it, if you can't monitor it, how can you manage it? It's a simple principle: you can't manage what you don't monitor. We don't have that information available, and we know the tax department's always under the pump. This Liberal government has cut its staff numbers and resources consistently. We know if the ATO had more money it could have a war chest and fight things like profit shifting. For example, they took Chevron—one of the biggest tax avoiders in this country—all the way to the High Court and won a very big tax settlement. That's because of the MAAL laws we helped pass. These gave the ATO the ability to do that.

If we don't invest in the tax department and its people, how do we expect to get a return on investment for the Australian people? They're the ones on the front line, making sure that we do have a fair tax system and that everyone pays their fair share. Whether you're a billionaire or someone on the minimum wage, everybody needs to pay their tax. That principle is a fundamental one. If we can't get that right we certainly shouldn't be looking at new laws in this place. I understand we will—possibly even today—cut corporate tax rates even further. Considering how many of these corporations don't pay their fair share of tax or use legal but immoral loopholes to get out of paying their fair share of tax, why are we even considering cutting headline tax rates for corporations? Their effective rates are so low already.

If you don't know the difference between 'headline' and 'effective': headline is what we debate about—30 per cent down to 25 per cent—but in many cases, after all their deductions, their effective tax rates are zero. In many other cases their average effective tax rates are well below 20 per cent already. This is thanks to Australia's very generous tax laws around deductibility. Why are we considering cutting corporate tax rates when we haven't properly fixed tax avoidance in this country?

I congratulate Labor for bringing this bill on today and, at least, trying to resurrect what was lost in 2015 in the Senate when their original laws went down. I hope the crossbench see that it's in every Australian's interest to do whatever they can, whenever they can, to tackle tax avoidance in this country. It's our job as Australians to put resources and time into this and to show leadership on this most important issue. I look forward to having more to say in the committee stage.