Corporate tax avoidance inquiry to begin this week, examining some of Australia’s biggest companies

The financial arrangements of some of Australia’s biggest companies will be in the spotlight this week with a Senate inquiry taking evidence on corporate tax avoidance.

The inquiry was initiated by the Greens leader Christine Milne and supported by the Federal Opposition.

“We have to actually start really pushing on this in Parliament, and that’s why the Greens moved for this inquiry,” Senator Milne told AM.

“That’s why we are determined to see changes in legislation to require these companies to pay their way and to achieve much higher levels of transparency and much greater independence of the tax office.”

The inquiry by the Senate Economics References Committee is examining the adequacy of Australia’s current tax laws, the work of the Australian Tax Office and whether more transparency is needed to deter profit shifting and tax avoidance.

The committee, chaired by the Federal Opposition’s Sam Dastyari, will take evidence from big technology companies like Google, Apple and Microsoft and mining corporations BHP Billiton, Rio Tinto and Fortescue Metals Group.

“I want to hear why it’s not reasonable for us to be able to know all the subsidiaries they have, where they are located, what their practices have been in terms of their profit shifting,” Senator Milne said.

The Greens leader said successive Labor and Coalition governments let big corporations get away with tax-minimisation practices for too long.

“It is time that we got to the bottom of the extent to which both Liberal and Labor governments up until now have continued to allow these corporations to rip off the Australian community,” she said.

“It has been a case of taxation by negotiation, rather than taxation according to the law.”

Senator Milne said she could not give an estimate of how much potential revenue to the federal budget had been forgone, and that she wanted to know why the Australian Tax Office had not provided those estimates to Parliament.
May budget tipped to address profit shifting issue

Treasurer Joe Hockey is tipped to use the budget in May to unveil new measures to address profit shifting.

The problem of multi-national tax avoidance is also on the agenda of the Organisation for Economic Co-operation and Development (OECD) and the G20, but Senator Milne said she did not believe the Federal Government was doing enough.

“Joe Hockey might be talking the talk, but let’s see the Government walk the walk,” she said.

The Senate inquiry’s deputy chairman, South Australian Liberal senator Sean Edwards, defended the Government’s approach.

“I know that the Treasurer has tightening this whole tax minimisation through transfer and profit shifting well and truly in his sights, and I think that he’s identified that as a significant area of revenue,” he told AM.

Senator Edwards said he did not believe the inquiry was accusing any of the corporate witnesses of wrongdoing, but he said profits made in Australia should be taxed here.

“I think that we’ve got to be careful that we don’t get out of step with what the rest of the global community — and indeed that infers the market place — is doing because we could put Australia at a disadvantage,” he said.

“But we can’t have companies generating profits in Australia and not paying their fair share, and I know that to be very dear to the Treasurer, Mr Hockey’s, heart.”

He said he was not too concerned by the companies, including Google, and miner Newcrest, which declined to provide the inquiry with specific information about their effective tax rates in their submissions.

He was also not concerned by those which had not responded at all to the committee’s request for information.

“I don’t think there’s any recalcitrance on any part of the people that have not got theirs in, but we’ll expect them to come in,” he said.

The inquiry begins its public hearings in Sydney tomorrow, and the committee is due to report in June.