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Wednesday, 11 November 2015
Page: 8237

Senator SINGH (Tasmania) (09:42): I concur with the remarks made by Senator Ludwig, particularly in relation to raising issues about transparency. That is why Labor has been calling for so long for action by this government to bring legislation like this to the parliament so that we can have more transparency and this government can stop hiding the big end of town away from tax payments and more broadly deal with the issue of tax avoidance. Why has Labor been doing this and why are we here today at this point? We are here because we live very much in a globalised world, a digitised world, a world where our economy is constantly changing, where multinational companies can move their profits from country to country and as a result avoid paying their fair share of tax. Labor has been calling for more action on multinational tax avoidance for over two years. It was six months or maybe even longer than six months ago that we laid out our own package—a package of $7.2 billion to close these tax loopholes and keep revenue here in Australia. You would think the government would think that was a good thing.

Now that we are going into the detail of this bill, it would be helpful if the government made it clear that they are going to pursue this kind of tax reform under a principle of transparency and accountability of those large multinational companies so that they start paying their fair share of tax and so Australian small businesses and individuals are not left picking up the slack. That has been the reality up until now. Why should Australian small businesses, of which there are a plethora, and individuals end up picking up the slack whilst these large multinational companies that are making massive profits get away with tax avoidance?

I would like to know, as Senator Ludwig referred to, how the government is going to tighten Australia's tax net in relation to the transparency principle. I think that is the most important thing here, other than, obviously, this legislation passing, multinational companies paying their fair share of tax and this issue of profit-shifting being tackled. I am really pleased that we are now doing this after the couple of years or more that it has taken to get to this point.

I would like to know in some detail how that transparency principle is going to be part of the government's agenda, its approach, as it goes forward in dealing with this issue and this reform. My understanding is that something like three of the five biggest companies in the world are companies that make their money primarily on the basis of intellectual property. If that is the case—I would imagine that could be the case, because we are very much living in a digitised world economy, so those issues could be seen as being part of that—is there is any focus by this government on those particular multinationals? We are talking about intellectual property being an important component of the Australian economy and the rights of small businesses and the like. Again, this goes to the heart of the issue of transparency. It also shows the complexities involved in relation to multinational companies and how they have managed to profit shift for all these years.

I am no expert when it comes to the tax avoidance workings of multinational companies, but I am aware that these issues have been looked at in other countries in great detail. The UK is a good example of that. Australia is not immune to multinationals behaving in this way. It is happening right across the globe, because that is the nature of a globalised economy and that is the nature of these particular large companies and the way that they make their profits, unfortunately. We all bear the brunt of that; we miss out in the process of that.

As I said, without that greater transparency, we will never know whether these major companies, these major corporations, are paying their fair share of tax. The government has started a whole new debate in relation to raising the GST and is particularly looking at everyday, individual Australians, including low-income individuals, because it is a regressive tax that affects everybody. Why is it doing that? It is looking at whether all taxpayers are contributing their fair share. You cannot raise that kind of argument—'Let's look at our tax base, our tax system and whether Australians are paying their fair share'—and, at the same time, allow all of these large multinationals to profit shift and not make their own contribution. This is an issue of transparency. It is a really important that transparency becomes one of the most effective tools for this government to combat profit-shifting and tax avoidance by these multinationals.

It is my hope that the government not only shows a commitment to ensuring that these major corporations pay their fair share of tax but also pushes transparency laws—that this government does not gut our tax transparency laws but instead stands by them. That would serve not just the interests of good governance—although that would be a start—but the interests of all Australians, who would be benefit from knowing exactly what is going on with tax avoidance by large multinationals. That is something they certainly would not know at this point in time. I ask the minister to outline, as Senator Ludwig has already alluded to, how the government is going to stand by the principle of transparency rather than continuing to hide the big end of town on this issue of multinational tax avoidance.