According to Andrew Leigh, Assistant Minister for Competition and Charities and Treasury, “it is a reminder of power of work that came to form Uluru Statement from Heart, which government hopes will be a successful vote at referendum later this year for an Indigenous Voice to Parliament.”
We hosted an excellent discussion on multinational taxes with several organizations representing business Australia, the labour movement, and the non-profit sector. We’ve taken this action because multinational tax avoidance is a significant problem for many Australians.
International corporations must contribute pretty, which harms Australians when they don’t. Due to multinational tax evasion, fewer funds are available to support our hospitals and schools. Multinational tax avoidance harms businesses by forcing small businesses to compete against giant multinationals on a level playing field by utilizing tax avoidance strategies that the latter cannot adopt.
With the OECD and G20 coming together in October 2021 to create a two-pillar solution, the world is moving on to the issue of multinational tax evasion.
The Labor Party in Albanese is also dedicated to taking action. In the October Budget, we outlined measures to stop the exploitation of thin capitalization, which is when profits are effectively transferred overseas using excessive debt. We made announcements about actions to prevent the abuse of royalty payments.
This system allows money to leave Australia in the form of revenue that Australian tax officials should control. We announced measures to increase tax transparency, including requiring large Australian corporations to report their country of tax domicile, requiring that businesses disclose their country of tax domicile when they tender for government work, and moving toward a system of country-by-country reporting so Australians can be sure that tax has been paid in the proper location.
Multinational tax is straightforward in concept but convoluted in the details. Ensuring multinational corporations pay their fair part will enable us to support the essential public services relied upon by Australians.
Compared to our predecessors, the Albanese government has a more progressive stance on multinational tax. It’s unacceptable for the tax system to remain inactive and let multinational corporations get away with tax avoidance schemes that result in the offshore transfer of profits that should be subject to Australian taxation. Providing the best public services to Australians is our primary goal at the multinational tax base.
Recognizing that in a good economy, we want businesses to compete on producing excellent goods and services, caring for their employees, and conducting research and development, rather than competing with one another to find the following scheme that will enable them to conceal profits in a tax haven.
David Bradbury, the OECD’s deputy director of tax, is here today, and I couldn’t be happier. After leaving this Parliament in 2013, David was recognized as one of best 50 global tax reformers for his remarkable career. He started working for the OECD in 2014 and is now based in Paris. He is in Australia for a week to meet with Australians and talk with them about the work being done at the OECD.
The breadth and depth of David’s study and the area of multinational taxation truly struck me, as did the other participants at the roundtable this morning. I’ll ask him to say a few words about how he now understands that context.
