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Monday, 25 June 2018
Page: 3713


Senator SESELJA (Australian Capital TerritoryAssistant Minister for Science, Jobs and Innovation) (11:52): The government won't be supporting these amendments from the Greens. I would like to make a couple of points on them that I didn't get to make in the preliminary stage. I will make a couple of broader comments. It seems we've now got a bidding war between the Greens and the Labor Party. The Labor Party said, 'We need to change the threshold from $200 million to $100 million.' The Greens then said, 'We can do better than that; we can lower it to $50 million.' And then Labor said, 'Sure, why not?' It's more than just ad hoc. It is: 'We're more virtuous than you when it comes to bashing Australian companies.' That bidding war has been going on for a long time between Labor and the Greens. No doubt, if the Labor Party were to come back next, they might say, '$25 million,' and the Greens would say, 'We can do better—$10 million, $5 million, $1 million, $500,000, $100,000? Do we have $50?' This is where it's headed.

There are a number of reasons why we won't be supporting that amendment. But I wanted to make it clear in opposing this amendment that only this coalition government has actually taken action in this space. The Labor Party not only did nothing when they were in government for six years; they also opposed action and voted against action on multinational tax avoidance during our time in government. So if it were up to the Labor Party the billions of dollars that have been recovered from multinationals would not have been recovered from multinationals, who have sought to avoid tax—because the Labor Party voted against it, and they used a fig leaf of $200 million versus a $100 million threshold.

So let's look at what has been done. Our action on multinational tax avoidance includes a commitment to ensuring tax transparency rules are effective in promoting broad compliance with and public confidence in Australia's tax laws. The government introduced a multinational anti-avoidance law and the diverted profits, tax which Labor opposed. These measures have been successful in bringing a further $7 billion a year in sales revenue into Australia's tax net. The multinational anti-avoidance law stops multinationals avoiding a taxable presence in Australia. The diverted profits tax prevents multinationals shifting profits overseas.

I make the point again that the Labor Party opposed these efforts. They did nothing while they were in government and then, in opposition, they decided they were going to vote against holding companies to proper account. In addition, I make the point that in the 2018-19 budget the government announced further measures to strengthen the rules that limit interest deductibility to stop companies shifting profits out of Australia, including requiring companies to align the value of their assets with the value included in their financial statements and broadening the scope of large multinationals that were subject to the MAAL and the DPT.

Examples of other strong actions taken by the government include the establishment of a Tax Avoidance Taskforce within the ATO on 1 July 2016. The ATO Tax Avoidance Taskforce scrutinises the tax affairs of multinational enterprises, large public and private groups and wealthy individuals operating in Australia. Its role is to ensure these entities pay the right amount of tax according to law. Achieving these measures will increase the trust and confidence of the Australian community and other stakeholders in the ATO's effectiveness and the integrity of the tax system.

In addition, there was the signing the OECD multilateral instrument on 7 June 2017. The multilateral instrument is a multilateral treaty that will allow jurisdictions to swiftly modify their bilateral tax treaties to implement measures designed to better address multinational tax avoidance. These measures were developed as part of the OECD/G20 Base Erosion and Profit Shifting Project. Currently Australia is one of 78 signatories to the convention, and another six jurisdictions have expressed their intent to sign the convention.

We're also doubling the penalties for multinationals avoiding tax—specifically, the penalties for large multinationals when they make false or misleading statements to the ATO. This will make penalties more commensurate with the turnover of large multinationals and provide greater incentive for them to lodge tax documents on time and to take reasonable care when making statements to the ATO. We're increasing penalties for breaches of tax-reporting obligations by multinationals. We're increasing the maximum penalty by 100 times for large multinationals where they fail to lodge tax documents on time. This means that the maximum administrative penalty for significant global entities that fail to comply with their tax-reporting obligations will increase to $525,000.

We're implementing OECD recommendations for country-by country-reporting to give the ATO greater access to multinational transfer-pricing information. Country-by-country reporting is part of a wide range of international measures aimed at combating tax avoidance through more comprehensive exchanges of information between countries, aligning Australia's transfer-pricing rules with the latest OECD guidelines. These initiatives have ensured that multinationals comply with the law. Since 1 July 2016, the ATO has raised $5.2 billion in tax liabilities from large companies. Australia is a global leader in the international fight against tax avoidance. We're taking strong international leadership on the G20/OECD Base Erosion and Profit Shifting Project, and the government, together with the ATO, continues to monitor the implementation and effectiveness of the tax laws.

I will just come back to a couple of points to finish. We won't be supporting these amendments. As I have said, there is now this odd bidding war where the Labor Party believed earlier today that $100 million was the right number, and now it apparently believes that $50 million is fine, and soon it'll be $25 million or lower. The point I return to is this: it is only the coalition government that has taken strong action in this area. The Labor Party had six years and did absolutely nothing in this space. When we have sought to take action on multinational tax avoidance we haven't been able to get the support of the Labor Party. They have actually voted against it. For those listening, just understand: the Labor Party have voted against taking action on multinational tax avoidance.

We believe in two fundamentals when it comes to our tax system: making our tax base is lower across the board—that's why we want to lower taxes across the board for companies; we believe that will enable us to be globally competitive because it will grow jobs and grow our economy—but, in lowering those taxes, that everyone should pay their fair share. We believe that this is not a voluntary contribution. You lower taxes across the board and encourage and incentivise investment, jobs and growth; but whether you're a multinational company or an Australian based company you pay your fair share of tax, you pay the amount of tax that you should be paying under our taxation laws.

We have taken the strong action. The Labor Party, of course, have opposed that strong action. But we're not going to engage in this bidding war that the Labor Party and the Greens are engaging in with these amendments. As a result, we'll be opposing these amendments.