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Monday, 19 October 2015
Page: 11539


Mr WHITELEY (BraddonGovernment Whip) (13:20): I rise today to speak on the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015. As Australia competes on the global economic stage, it is absolutely essential that we take steps to ensure companies pay their fair share of tax. The government strongly believes that profits made in Australia should be taxed in Australia. That is why we are taking steps in this bill to implement three budget measures announced in May this year.

Currently, some multinational companies operating in our nation are avoiding paying the correct level of taxation through employing complex profit-shifting schemes. This not only leads to substantial amounts of forgone taxation but also substantially disadvantages our local and small businesses, families and individual enterprises who all pay their fair share.

Today this government is rectifying that disadvantage through strengthening tax compliance measures on multinational corporations with a global turnover of more than $1 billion. Businesses across my electorate of Braddon already compete on the global stage, and I am proud to be part of a government that is levelling the playing field when it comes to paying tax.

The coalition's multinational anti-avoidance law will stop multinationals using complex schemes to avoid paying tax in Australia through booking their revenue overseas. We are empowering our Commissioner of Taxation to treat those multinationals as taxable here in Australia. Our country-by-country reporting implements recommendations from the G20 and will ensure transparency in multinationals' income and tax paid in each country they operate in, greatly enhancing our capacity to chase foregone revenue. Concurrently we are doubling the penalties applying to large companies engaging in tax avoidance or profit shifting. This government remain committed to delivering a fair share of tax back to the Australian people and are delivering on that commitment today.

The coalition government are leading the fight against multinational tax avoidance. It is an issue we pursued as president of the G20 last year. We fought to get it on the agenda of the G20 and are now delivering on our rhetoric in this space. Australia led the global response to tax avoidance and we continue to do so in this bill. This bill is consistent with this government's overall approach to this issue. In 2014 this government, under the previous Treasurer, strengthened our defences against multinational tax avoidance. We have already tightened our thin capitalisation rules, which will substantially limit the scope for multinationals to claim excessive debt reduction. We are also allocating unprecedented resources to the Australian tax office. We have provided an additional $87.6 million to the ATO over three years to investigate international tax avoidance; the program is estimated to have raised $1.1 billion.

Our side of politics is often accused of being run by big business. I echo the recent words of the Prime Minister in categorically refuting that claim. This bill stands testament to the unshakable commitment of the coalition to the Australian business sector. We govern with regard for the national interest, not the interest of some exterior body pulling the strings. That is why we have delivered free trade agreements with Japan, Korea and China. That is why we have delivered the Trans-Pacific Partnership. We are creating growth and jobs through freer markets. Yet, whilst on this side of the chamber we realise the importance of freer markers, we also have the national interest squarely in mind.

This multinational tax avoidance bill delivers on our commitment to the Australian people. It is this government and only this government that can achieve both a broadening and deepening of our market access whilst also setting the economic frameworks that will deliver effective taxation into the 21st century and beyond.

I think it is important to outline how this bill will result in better outcomes for the Australian people. I believe it best achieved in assessing how this legislation will operate once enacted. The coalition is committed to simpler taxes and that is why the process is so simple under this legislation. Under the multinational anti-avoidance law we first establish that a company is a foreign company. We then assess if it has a global revenue of over $1 billion. We then establish if Australian sales have been booked overseas and assess if the principal purpose of the scheme was to avoid tax. If it is found that a foreign large company has been engaging in tax avoidance, they will pay the income tax on profit that should have been booked in Australia, pay interest on unpaid taxes and pay a further 100 per cent of the Australian tax avoided in penalties.

This is a serious solution to a serious problem and will deliver foregone revenue for the Australian taxpayer. This government is taking a responsible and measured stance on multinational tax avoidance in this bill. I am proud to stand against unfair tax avoidance by large multinational companies. I welcome the benefits this bill will bring to Australia and our citizens, and I commend this bill to the House.