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Thursday, 3 December 2015
Page: 9803


Senator McALLISTER (New South Wales) (12:22): We have been told quite a bit in the last week about the government's desire to have a mature, grown-up conversation about taxation. To that end the government has been keen to assure us that they have not ruled out GST. In fact, not a single member of the government has been willing to rule out the introduction of an increased GST in either its level or the breadth of its application.

But I will stay to government senators that it is a pretty funny way to start a mature conversation.

Senator Cormann: Mr Chairman, I rise on a point of order. I appreciate that this is a wide-ranging debate, but there is a question before the chair and the question before the chair does not relate in any way, shape or form to the GST or other matters that the senator has started to touch on. The issue that we are dealing with is a government bill to combat multinational tax avoidance and how the Senate proposes to deal with a position adopted in the House of Representatives. I ask you to draw the senator back to the question before the chair.

Senator McALLISTER: On the point of order: I am simply seeking to place the matters before this chamber in the context of the broader debate on taxation.

The CHAIRMAN: While the minister is right—there is a question before the chair—Senator McAllister has only been speaking for less than a minute. We will see whether her comments become relevant in due course.

Senator McALLISTER: I simply wanted to observe that it is a funny way to have a conversation about taxation when all of the things that do seem on the table relate to penalties for low-income people in the tax-and-transfer system. Very few of the things that are on the table go to the question of corporate taxation and of the big end of town paying its fair share. That is, of course, the debate that we are having here this morning.

The Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 was an opportunity for the government to demonstrate that they would be even-handed in this mature conversation that we are embarking upon about taxation. Sadly, that is not what has been presented to us this morning and is not what has been presented to us over recent months. This bill in general has been supported by Labor, but our sense is that it is utterly inadequate in addressing the very real challenges of corporate tax avoidance that are presented to us. The bill, of course, takes a completely untested approach to closing some of the loopholes present in our corporate tax system. There are no precedents for the approach around the world.

The extraordinary thing—and I remember looking at this on budget evening—is that in the budget papers the measures provided for in this bill could not be quantified. Instead of a number, the usual thing that one expects to see in budget papers, there was a series of asterisks which substituted for an actual quantified assessment of the impact of this bill on levels of revenue for the government. I think that tells you quite a lot about the seriousness with which the government has approached this task. I draw people's attention to the way that we might have been treated if we had put forward a set of propositions around corporate tax reform but just put a series of asterisks in place. That would have been laughed out of town. That would have been a case for serious mockery. But this government has had the effrontery to present their arguments with absolutely zero information about what the likely impacts of the bill will be in addressing serious problems.

The specific questions that the chamber is debating this morning go to transparency. It has been the subject of quite some examination in both the Senate Economics References Committee and here in the chamber over the last two years, as previous speakers have pointed out. Of course, when last in government, the senators on this side of the chamber and Labor ministers took this issue seriously. We passed legislation in government that required the Australian Taxation Office to publish information about the income and tax paid by companies earning more than $100 million. Ever since we put that legislation through, this has been the source of real anxiety for the government but, more particularly, real anxiety for the very wealthy individuals who fear that their own tax affairs may be the subject of additional scrutiny and, quite frankly, should they be scrutinised, might not really stand up to that scrutiny.

The truth is that there are quite a number of companies in this country that are in legally grey areas. The ATO has said that privately owned corporate groups, often controlled by a wealthy individual or a family, pose significant tax compliance risks. These are the very companies that our legislation sough to target and these are the very companies that the government today, with the agreement of the Australian Greens, is seeking to exempt from scrutiny.

The thing about these companies is that in many instances their arrangements may well be legal. It may be that they are in strict compliance with the tax laws in a black-letter sense. But if we do want to have a mature and serious debate about taxation then we need to understand that, in certain instances, people may well be in compliance with the law but nonetheless the practices that the law enables may not be fair. They may not see very large, very wealthy organisations paying a level of tax that ordinary Australians struggling to get by would consider reasonable. They may also see particular individuals using a large number of companies interlinked in complex ways to avoid paying the income tax that they also would be reasonably expected by the rest of the public to pay.

Throughout this debate there have been people on the other side of the chamber who have said that the publication of this information, putting this information into the public domain, could cause misunderstanding, and that perhaps the Australian public are not smart enough or mature enough to understand the information that would be put before them when this information is published. My assessment is that the opposite is true. People are not really afraid that the Australian public will not understand the information that is put before them. People are afraid that the Australian public will understand the information that is put before them. They will understand that the situation where one in five private companies is paying zero tax is unfair and unreasonable and sees a small group of people shirking their obligation to contribute to the services that are valued by all Australians, because that is the truth of it. When we are talking about tax, we are also talking about government services.

As my colleague Senator Lines pointed out, the social wage in this country is absolutely essential to the support of so many very low-paid workers who struggle day to day to get by buying food, buying clothing and supporting their children through education. Those families are dependent on a health system that works. In their retirement they will be dependent on an age pension, and they will be dependent from time to time, if they fall into unemployment or underemployment, on some level of government support to keep their family on their feet until such time as they can, once again, provide for themselves. Each of these measures that a civilised government provides are absolutely dependent on adequate levels of taxation. It is, to that end, most important that we are able to have a serious debate about tax in this country. But you cannot have the debate if you do not have the information.

There has also been a series of spurious arguments made about some of the personal security risks presented by the publication of tax information. We saw the embarrassing circumstance where government agencies contradicted these arguments, pointing out that the AFP had never provided any concrete examples of threats to individuals arising from their financial information being in the public domain. We also saw arguments that the disclosure of this information would harm Australian owned private companies in their market environment. Of course, what we do understand is that, in any market, competition is absolutely dependent on fair information and an even playing field. We ought to be looking to even up the playing field between publicly listed companies, whose financial reporting gives a clearer picture of the risks related to the companies, and the private companies. This lack of reporting about their tax affairs may well conceal some risks associated with those companies. We have heard about compliance costs. This cannot be a serious reason for opposing tax transparency. Compliance, of course, must also always be proportional. We must always be balanced. But if there is some public good, it is not unreasonable to ask compliance costs to be borne by these businesses.

What is astonishing then is to come into this chamber this morning and hear news that the hard-fought efforts of, the hard-fought gains won by, many in this chamber to improve levels of tax transparency—against the wishes of the government—have been undermined overnight by a deal by the Australian Greens in concert with their friends in the government. We are frequently lectured on this side of the chamber by the Australian Greens about their role in protecting progressive interests in this country. We have been told by Senator Di Natale that his goal is for the Greens to become the natural home for mainstream aggressive voters.

It is a pretty funny way to go about it, because if I were looking to displace the Australian Labor Party—which, of course, is the true home for mainstream progressive voters—I would not set about doing that by repudiating hard-fought gains in tax transparency. I would stand with the only progressive party that is capable of forming government in this country, and I would stand by the legislation that they put in place to improve the level of tax transparency in this country. What I would not do, similarly, is defend this proposed legislation. I would not come into the chamber and say, 'This half-baked deal gets us somewhere.' It really does not. There was a majority view formed in this chamber to stick with the arrangements that Labor had put in place. The unilateral decision by the Australian Greens to walk away from that view for some, as yet unexplained, benefit—which, I suspect, is not going to prove to be particularly impressive—is really inexplicable to me and I think will be a source of real disappointment for many progressive activists out there who do look to the progressive parties in this chamber to defend their interests and their beliefs.

I note that the Australian Greens are fond of putting up enthusiastic memes and enthusiastic posters like, 'We did it!' Well, what have we done today? We did it; we managed to work with the government senators to water down tax transparency provisions in this chamber. I say to all senators here: I think that this is a very great shame. It does not reflect well on the Australian Greens, but the Australian Labor Party will not walk away from our commitments on this matter.