Senator seeks public shame for big tax dodgers
The first report from a Senate inquiry into multinational tax avoidance is expected to be tabled today, while investigators say companies are funnelling more than AU$30 billion to Singapore every year to avoid tax.
Jason Ward, an analyst in a team that sought Freedom of Information documents on corporate Australia's tax avoidance, said documents showed AU$31 billion made by 10 major companies in Australia in one year was shifted to Singapore.
One single company moved AU$11 billion from Australia to Singapore in one year.
But the documents protected the names of the companies involved, and there is now a debate as to whether they should be revealed.
“Any information which could identify individual companies has been blocked out,” Ward told the Seven Network's Sunday Night program.
“There has to be consequences for these companies, for what they're doing. It's not illegal but it's completely immoral.”
Instigator and chairman of the Senate inquiry, Labor Senator Sam Dastyari, says the system is “completely broken”, slamming the privacy provisions that allow Australia's worst offenders to hide.
He said the standard practice was for companies to sell their own products to themselves, moving money to their Singapore arms to reduce their reported profit in Australia.
“When you have a handful of multinational companies able to take Australian taxpayers for a ride, the system has to change,” Dastyari said.
Federal Treasurer Joe Hockey claims the government will go after 30 primarily offshore-based companies that the ATO says are not paying their fair share of tax, but he says Senator Dastyari had questions to answer about the release of recommendations to media outlets before the report was complete.
“It's extraordinary. This is a very serious issue that goes to the heart of the integrity of the entire Senate,” Hockey said, accusing the Senator of trivialising the issue.
But Senator Dastyari denies speaking specifically about the as-yet-unreleased report's recommendations.
He says he has provided personal views amid a public thirst for information.
“These companies do care about their reputations and they do care about their market share,” Dastyari told ABC reporters.
“Exposing some of the worst practices, I believe, puts a lot more community pressure on these companies.”
Independent Senator Nick Xenophon - also a member of the inquiry committee - says transparency was key.
“Whatever the government comes up with, the Senate will be in a much better position to consider that legislation given the forensic look we've had at this whole issue,” Xenophon told ABC radio.
While Dastyari and others want companies that minimise their tax in Australia to be named-and-shamed, Assistant Treasurer Josh Frydenberg has told Sky News that the government will not be doing that.
“It might suit [Dastyari's] political purposes to go and scream the names of these particular companies that he's after but it actually doesn't suit Australia's purposes,” Frydenberg said on Monday.
“The ATO is going after these companies.”
Hints as to who the worst offenders might be are available in a recent United Voice union Tax Justice Network Australia report, which found that 29 per cent of Australia's top 200 companies were paying an effective corporate tax rate of 10 per cent or less.
More than 14 per cent of the top 200 had an effective tax rate of 0 per cent.
Optus' parent company SingTel was named as one of the country's top tax avoiders.
The report alleged that the telco averaged a tax paid amount of AU$284 million from AU$3.3 billion average pre-tax profit; an effective tax rate of 9 per cent.
Apple, Google, and Microsoft have recently confirmed that they were being investigated as part of the tax avoidance inquiry.
Apple's Australian managing director Tony King claims that Apple Australia is entirely owned by Apple Ireland, but told the inquiry that he did not know of the so-called “double Irish Dutch sandwich”; a well-known process of shifting profits to shell companies in Ireland.
The Senate report is expected to be released late Monday.