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Monday, 27 March 2017
Page: 2217

Senator LEYONHJELM (New South Wales) (13:49): I rise to speak on the Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 and the Diverted Profits Tax Bill 2017.

The tax office is a bully, and parliamentarians here are egging it on. Bullies beat up on unpopular kids, and there is no-one more unpopular at the moment than multinational companies. Bullies fear getting caught by the schoolteacher so they beat up unpopular kids behind the sheds rather than out in the open. The tax office fears the courts because the courts regularly find that the multinationals are in the right and that the tax office is in the wrong, so the tax office has asked the government to introduce these bills currently before the Senate. What they do is prevent multinationals from having access to the courts for 12 months from the point at which they come under attack from the tax office. This is a gross violation of the rule of law, and it is scandalous that the government in this parliament is so openly encouraging the tax office to act like a lawless bully.

The bills currently before the Senate allow the tax office to slap a 40 per cent tax on whatever they choose. If the multinational does not immediately pay, it also faces an interest cost on this unpaid tax at the bank bill rate plus seven per cent. If the tax office subsequently decides that it made a mistake, any tax paid by the multinational is returned plus any interest costs incurred by the multinational with respect to the bank bill rate. But the tax office does not return the seven per cent component of any interest cost.

The message to multinationals is clear: if the tax office is right, pay up; if the tax office is wrong, you must still pay up. If you want to fight the tax office in the courts, you will have to wait a year, during which you will rack up an enormous interest cost. The consequences of these draconian bills are clear: we will see fewer multinationals do business and employ people here compared to what we would see if Australia had a competitive company tax rate, clearly defined tax rules and a commitment to the rule of law. Australia is closed for business. The government could not be any clearer.