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Thursday, 3 December 2015
Page: 9806

Senator KETTER (Queensland) (12:36): Across Australia this morning, and I trust tomorrow morning as well, supporters of the Australian Greens will be choking on their Weet-Bix. They will be spitting out their coffee, and they will be absolutely astounded that the trust that they placed in the Australian Greens to defend their interests in this issue of tax transparency has been entirely misplaced. They have been betrayed by the Australian Greens. One must give some credit to former Senator Milne for her work in being part of the instigation of the Senate Economics Committee's inquiry into tax transparency. But that work has been betrayed by the current leadership of the Australian Greens.

We have woken up today to see that the Australian Greens have undercut the good work that Labor and the crossbenchers have been doing, working together to try to bring about a better outcome when it comes to tax transparency. What I am specifically referring to is the fact that the Greens have sided with the government in raising the threshold for the disclosure of tax. We know that, under the $100 million threshold which had been passed through this place, about 900 private firms would have been required to disclose their tax arrangements. Under this new threshold of $200 million of income, it is now likely to be fewer than 300 companies. Some estimates put it as low as 281 private Australian companies. This number could be even lower, because it is well open to billionaires to come forward, as they are prone to do, to restructure their businesses and to hive off parts of their structures so that they come below the proposed $200 million threshold.

This is the sort of activity that people in this area get up to because they are particularly keen to ensure that the light of day is not shone on their tax arrangements. There are many prominent Australians who have come out and said they want sunlight to be shone on these tax dealings. We have had Mr Dick Smith come out. He actually savaged the Prime Minister for shielding the rich from tax transparency and he accused the Prime Minister of 'ratting' on typical Australians who pay their tax if the coalition goes through with plans to shield large private companies from having to disclose how much tax they pay.

We know that trust is the important thing. A key pillar of any successful economy is trust. Market driven systems are inherently based on trust—trust by workers that they will be paid by their employers; trust by businesses that other businesses will fulfil contract obligations; trust by everyone in the banks and the financial system; and, above all, trust in the government. We are currently at a low point in public trust in our institutions. The past year of publicity on the devious ways in which multinationals avoid paying taxes in Australia, albeit through legal loopholes, has eroded public confidence in the government's commitment to ensuring that there is a level playing field when it comes to tax.

While the tax office hounds our small businesses to register for GST, submit quarterly statements and deliver chapter and verse on their financial affairs, we are aware that Australia's richest individuals employ expensive tax accountants to find the loopholes that help them to minimise their tax. Tax data from the 2012-13 financial year reveals that 40 of Australia's top income earners claimed $42½ million for their tax advisers, an average spend of over $1 million each to bring down their taxable payments. Most Australians will never see $1 million in their lifetimes. It is hard for an average Australian to understand that someone gets $1 million deducted from their taxes just to pay for their tax accountant. It is not surprising their confidence in our tax system and in our values of fairness for all is being sorely tested.

But there was bipartisan support to expose and close the rorts that global multinationals are getting away with via a myriad of complex overseas arrangements that reduce their tax exposure in Australia. Everybody agrees that multinationals need to pay their fair share of tax that relates to their activities in Australia. But what about the many Australian companies and the private holdings of our wealthy individuals? Are Australians expected simply to take the government's word that our Australian owned businesses are beyond scrutiny, that we can expect them all to do the right thing, even though we know that many of our top income earners pay no tax whatsoever? If these companies and private trusts have nothing to hide, then why are the government and its Treasurer so outraged that the wealthy should be asked to put very basic financial information on the public record? As Dick Smith has recently said, we know who most of them are. There are currently around 1,498 Australian companies that enjoy an exemption from the normal financial reporting requirements that apply to all other Australian companies with revenue over $25 million.

In light of the recent exposure of how multinationals are avoiding tax in Australia, we should return to the issue of why so many of the top Australian businesses are able to keep their tax affairs secret. There were some temporary exemptions from full financial reporting, but this is now something which we are focused on. There is a reason why we have joined in the bipartisan effort to combat multinational tax avoidance. It is that we are sick and tired of hearing all the stories of how much tax many global, iconic companies here in Australia are not paying—companies like Chevron, Glencore, Uber, Apple, Google et cetera. But are we simply to accept, without any information whatsoever, that our own wealthy Australians, whether they be companies like Myer or Linfox or simply wealthy Australian families, are paying their taxes here? Our tax transparency proposals would go a long way to redressing the suspicion that Australians hold about how fair our tax system is. Greater transparency would ensure that the public is better informed about the tax contributions that our large corporations are making, discourage aggressive tax minimisation practices that we know exist and inform our ongoing debate about the efficiency and equity of our tax system.

We are not asking for a lot of information, which makes it all the more surprising that the Treasurer is so outraged by our proposal. We believe that the government's stand here to maintain secrecy is a matter which ordinary Australians should be particularly concerned about. What are they trying to hide and why? In this era of corporate ethics and responsibility, shouldn't the wealthy bend over backwards to demonstrate how great their contribution is?

Progress reported.