Tax take, and take
Big companies, especially multinationals, are still not paying their share
The headline out of the ATO’s annual Corporate Tax Transparency report – that a third of our largest companies paid no tax in 2017–18 – is as damaging as ever for the federal government. Cracking down on tax avoidance, especially by multinationals who remain the worst offenders according to today’s analysis by michaelwest.com.au, is one of those very few issues on which there is agreement from across the political spectrum, left to right. Greens leader Richard Di Natale described the ATO’s report as “proof that the system is rigged in favour of big corporations who make massive political donations”, while One Nation’s Pauline Hanson cited multinationals “ripping the guts out of Australia and sending their profits offshore” as one of her reasons for sinking the union-busting Ensuring Integrity Bill last month. With the government under pressure to shore up its budget surplus, cracking down on tax avoidance would seem an absolute no-brainer.
The ATO announcement quoted deputy commissioner Rebecca Saint, saying the 2214 entities with income of more than $100 million collectively paid $52.3 billion last financial year – 60 per cent of the total tax take – which was up by almost $7 billion due largely to commodity prices. The detail shows slow progress is being made, to the tune of $7 billion extra sales income booked in Australia as a result of the Multinational Anti-Avoidance Law passed by the Coalition with the support of the Greens in 2015. Although 710 companies paid no income tax, Saint said that number “continues to decline”, and the data shows high-profile example Qantas has finally paid tax this year, after using up all its tax losses from previous years. Michael West, Guardian Australia and the ABC have all published detailed analyses. There is a focus on the “tax gap” figure of $2 billion, which is a theoretical ATO estimate of the difference between the tax payable according to law and the tax actually collected from taxpayers. West calls this the most politicised aspect of the ATO report. “It is in the Government’s interests to claim that it has beaten the multinational tax dodging epidemic. Indeed it has claimed precisely this in TV advertisements. Further, many of these companies are large political donors for both the Liberal and Labor parties.”
Labor’s shadow assistant treasurer, Stephen Jones, criticised government spending of $24 million on TV ads promoting tax integrity, and pointed out that the tax transparency reports themselves were only published as a result of Labor legislation passed in 2013 against the Coalition’s objections. “This is after they voted against Labor’s 2012 tax laws, which were directly responsible for BHP being forced to pay a $529 million tax bill last year.”
Serial offenders like News Corp and Brookfield paid nothing, again, and the Greens pointed out that of the top 100 companies that paid no tax, 22 are fossil-fuel companies. “What kind of message does it send when a multi-billion dollar corporation like Whitehaven Coal pays less tax than a nurse on $54,000 a year?” asked Di Natale. “It’s time that we ended the loopholes that allow big, polluting companies to opt out of paying their fair share towards our essential services.” West called the Petroleum Resource Rent Tax, which raised just over a $1 billion, an “out and out dud”.
Speaking in parliament, explaining why she would vote against the Ensuring Integrity Bill, Pauline Hanson quoted Industrial Relations Minister Christian Porter himself, talking about wage theft and complaining many employers spent more time on minimising tax than on their workplace obligations. “He’s right,” said Hanson. Nobody could disagree.
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“Each year, the Marrakech International Film Festival focuses on the output of a country or region. For its 19th iteration, the focus turned to Australia, and the budget of its benefactor – Morocco’s Crown Prince Moulay Rachid – extended to flying out as many cinematic icons as it could manage. ‘If the plane had gone down, we would have lost an entire generation of Australian cinema history, truly,’ director Gillian Armstrong told me earlier that day.”
“A view has emerged of a Coalition caught between a rock and a hard place – with News Corp hammering its claim on one side and two of the largest companiesin the world [Google and Facebook] on the other. To complicate matters, neither of the tech titans has the political clout of Murdoch in Australia, and News Corp has leveraged that power to make its case clear.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Inside the Greens and the unauthorised biography of Malcolm Turnbull, Born To Rule?
The headline out of the ATO’s annual Corporate Tax Transparency report – that a third of our largest companies paid no tax in 2017–18 – is as damaging as ever for the federal government. Cracking down on tax avoidance, especially by multinationals who remain the worst offenders according to today’s analysis by michaelwest.com.au, is one of those very few issues on which there is agreement from across the political spectrum, left to right. Greens leader Richard Di Natale described the ATO’s report as “proof that the system is rigged in favour of big corporations who make massive political donations”, while One Nation’s Pauline Hanson cited multinationals “ripping the guts out of...
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