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senate vote 2015-11-11#2
Edited by
mackay staff
on
2016-01-08 17:17:57
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Title
Bills — Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015; in Committee- Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 - in Committee - Discretion to prevent disclosure of tax information
Description
<p class="speaker">Sam Dastyari</p><p>Minister, I think you are the fourth or fifth minister who has been asked questions about this. Perhaps we will be able to get some answers from you that we have been unable so far to get from others. Why is this not a bill that can be improved or should be improved through potential amendments designed to increase the amount of disclosure? So far, the debate we have been having and the questions we have been asking have centred around why different information has or has not been provided and why different reasoning has been provided. I want to ask a more specific and direct question: does the government believe that this bill can be improved through the supporting of amendments?</p> <p class="speaker">James McGrath</p>- The majority voted in favour of [amendments](http://www.openaustralia.org.au/senate/?gid=2015-11-11.166.1) moved by Greens Senator [Peter Whish-Wilson](https://theyvoteforyou.org.au/people/senate/tasmania/peter_whish-wilson).
- The amendments will now go to the House of Represenatives for them to consider before they can become part of the bill.
- ### What were the amendments?
- The amendments give the [Australian Taxation Office](https://en.wikipedia.org/wiki/Australian_Taxation_Office) a discretion to prevent the disclosure of tax information of large Australian-owned private companies if the ATO thinks releasing that information would be prejudicial to the companies' commercial negotiations.
- ### What does the bill do?
- The [bill](http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r5549) strengthens the laws against [tax avoidance](https://en.wikipedia.org/wiki/Tax_avoidance) for certain companies. For example, it introduces anti-avoidance measures to deal with [multinational companies](https://en.wikipedia.org/wiki/Multinational_corporation) with an annual global income of more than $A1 billion that use schemes to avoid having to pay tax in Australia or at least reduce that tax to a minimum.
- To learn more about the bill, see the [bills digest](http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1516a/16bd045).
<p>Thank you for the question. We believe that we have the balance right in terms of the provisions of the bill, and it is in accordance with the OECD.</p> <p class="speaker">Sam Dastyari</p><p>I want to reiterate the position of those of us on this side of politics. I believe—and Senator Cash made a point of referring to earlier remarks I had made in this chamber—that this is a good bill. I believe this bill warrants support. I believe this bill goes a long way towards making sure that there is a greater level of transparency and that there are stronger rules around multinational tax avoidance. I believe that former Treasurer Mr Joe Hockey should be commended for the work he has done on this bill. But I also believe that this is not a perfect bill. I also believe that this bill, while it is a good bill and is better than the current situation and circumstances, is one that could actually do with improvement. It is a bill that could do with some changes.</p><p>I want to draw your attention to potential changes around the area of making sure there is greater disclosure for private Australian companies that have over $100 million in revenue in any given year. I know this is slightly unfair on the minister, because some of us in this chamber have been part of this debate for the past day and are coming into this with a lot more information. I note that the minister is acting in the capacity at the moment. Minister Cormann, who is perhaps the person who would normally have carriage of this, is at the moment on very important government business in Turkey. So, acknowledging that there is perhaps a limited level of information you may have available to you, Minister, I do believe there is an opportunity.</p><p>We heard from Senator Xenophon today about his concerns for the releasing of information about companies of over $100 million. The concern that Senator Xenophon had was one of ensuring that businesses that released this information were not taken advantage of in the chain of responsibility, and also by other companies. The concern would be this. If I were a company, a family business, I may have quite significant revenue—let us say it is $100 million, $120 million or $150 million. I may have a concern that the publication of that information would materially hurt my business in its negotiations with some larger suppliers, a classic example being your Coles or your Woolworths, who are well-known for being quite aggressive in some of their techniques and in how they drive these things.</p><p>I do not believe those concerns are right. The reason I do not believe that Senator Xenophon is right in this is that the information made available is available elsewhere. In fact, you can get all of that information, and more, by paying $38 to ASIC. ASIC will provide you with a more detailed series of that type of information, simply with the payment of $38. I believe there is the potential, however, to allow the exclusion of those types of companies by giving the tax office the opportunity to remove them. Would the government consider supporting an amendment that would actually address the concerns raised by Senator Xenophon but would nonetheless address those issues?</p> <p class="speaker">James McGrath</p><p>The short answer is no.</p> <p class="speaker">Sam Dastyari</p><p>I want to begin by thanking the minister. We have had lots of attempts at answers previously, and I would have to say that that was probably the most frank and honest one. Your reputation precedes you! Why won't you consider supporting it?</p> <p class="speaker">James McGrath</p><p>As you have said, this is a good bill. It brings in greater levels of transparency. You have commended former Treasury Hockey for his work on it. We believe the bill has the right balance.</p> <p class="speaker">Sam Dastyari</p><p>Is the minister then saying that he believes the enhancement of transparency by including this information—even if we are going to give an opt-out for certain businesses—is going too far? Is that the position of the government?</p> <p class="speaker">James McGrath</p><p>We believe the bill has the right balance. We believe that those additional changes that you talk about would actually impose greater red tape on business.</p> <p class="speaker">Peter Whish-Wilson</p><p>Senator McGrath, welcome to the chamber—the chamber of horrors for you guys, no doubt, given that I think you are the fifth person we have had on the front bench dealing with this bill and the proposed amendments. You referred to greater red tape. Could you be more precise about that, given that the financial information these companies have to give to ASIC is already lodged, and it is a lot more extensive than what we are asking for. To make it clear for you, the disclosure requirements we are seeking to include are: the ABN and name of the company or individual; the total income for the income year; the taxable or net income, if any, for the income year; and, income tax payable, if any, for the financial year.</p><p></p><p>We are asking for four things which are nowhere near as substantial as what has been lodged at ASIC. In fact, Senator Xenophon showed me an ASIC request, which he had done this morning, I presume, for another South Australian company. I looked at it very briefly and it was full of consolidated accounts and information. So where does the red-tape argument come from if we are simply asking for four things to be taken out of that and added to a register for around 1,000 companies? Perhaps that is the last piece of information. We estimate that around 1,000 companies would be captured by this register.</p> <p class="speaker">James McGrath</p><p>I will address the fact that I am the fifth minister to speak here. Perhaps because of the filibustering of certain parties in this chamber, I think, we are going around in circles at the moment.</p> <p class="speaker">Matthew Canavan</p><p>Circle work.</p> <p class="speaker">James McGrath</p><p>There has been lots of circle work. That is perhaps why this has taken a lot longer than was expected, because of certain activities of other parties here. In relation to red tape, we believe that the bill has the right balance and that any additional proposals will increase the red tape on business. The ATO and ASIC have suitable powers, presently, to seek the information they require.</p> <p class="speaker">Peter Whish-Wilson</p><p>In relation to the filibuster, we will continue to ask questions until we get decent answers. They have not been forthcoming. Our job in committee is to thrash out these things and to make sure that legislation, counter proposals and these kinds of things are thoroughly assessed by the committee. That is our job. We are a house of review and I do not need to tell you that. I have asked a number of what I thought were perfectly reasonable questions that I have not received proper answers to. Let me try another tack where I do want information. Your government was talking in the budget this year about a voluntary corporate disclosure code. Could you explain to the committee why you have moved from a voluntary to a mandatory code in the legislation that we were debating for multinationals with a turnover of more than $1 billion? What made you decide that you needed a mandatory code of disclosure?</p> <p class="speaker">James McGrath</p><p>Sorry, Senator, could you ask that again please?</p> <p class="speaker">Peter Whish-Wilson</p><p>We often have this debate between mandatory and voluntary codes, or regulations, let's say. In this budget the previous Treasurer, Joe Hockey, introduced an idea to have a voluntary corporate disclosure code where the Treasurer was very clear about the need for disclosure by corporations in paying their fair share of tax, and he even said that it will discourage companies from engaging in aggressive tax avoidance. This is the idea of disclosure, and I presume that is behind the bill that you originally brought in that we are about to move an amendment to.</p><p>I think that, clearly, we are on the same page with the government, the LNP, and I suppose I should include the Nationals in that. The Greens, Labor and the crossbenchers all think that disclosure is a good thing, which is the whole basis of your bill. The Treasurer made it very clear that disclosure was important and said:</p><p class="italic">It will also discourage companies from engaging in aggressive tax avoidance.</p><p>He then said:</p><p class="italic">The Government would like more companies, particularly large multinationals … to publicly disclose their tax affairs.</p><p>That is what we are asking for. You are saying that it is for $1 billion or more. I am asking: why, firstly, did you move from the idea of a voluntary code to a mandatory code—hence the legislation—and, secondly, why you did not go with the $100 million as the threshold, because that was the previous legislation? Why $1 billion?</p> <p class="speaker">James McGrath</p><p>This is nothing to do with the bill before the committee at the moment. I am afraid that, in terms of the information provided, I would prefer to be answering questions relevant to the bill before the committee.</p> <p class="speaker">Sam Dastyari</p><p>I note that I have been provided with sheet 7796, which appears to be a potential amendment in the name of Senator Whish-Wilson. In light of that, I would like to inform the chamber that I will not be proceeding with amendments on sheets 7794 and 7795 that have been circulated in my name on behalf of the opposition.</p> <p class="speaker">John Williams</p><p>That has been noted.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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