BILLS - Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023 - Second Reading

Ms CLAYDON (Newcastle—Deputy Speaker) (19:00): What a delight it is to rise in this chamber this evening to speak on the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Bill 2023. This is a commitment. This bill comes from a solemn commitment that the Albanese government made in opposition: that should we come to government we would seek to ensure that multinationals started to pay their fair share of tax in this country. I don't think there are too many Australian people that would not be with the government on this matter. Nothing gets under the skin of Australian people like the burning sensation of being ripped off by a global national swanning in and reaping the benefits of everything the nation has to offer, only to scarf off their profits to tax havens overseas and, by virtue of that action, dud Australian citizens in the process.

It was no surprise to anyone who knows the Australian Labor Party that during the 2022 election campaign, we made a commitment to ensure that multinationals would pay their fair share of tax. This legislation before us is the very beginning of levelling that playing field for the Australian people, for Australian businesses and for Australian workers who, let's face it, are doing the heavy lifting and making very significant contributions to our revenue base here in Australia. Let's acknowledge the efforts made by both Australian citizens, in terms of our workforce, and those who have small- or medium-sized businesses right across Australia.

These reforms start creating a level playing field for Australian businesses. Importantly they are increasing transparency as well. Critically, they are holding companies to account, particularly those large corporate groups whose structures are often pretty opaque, and making sure a light is shone on those corporate structures. We want to shine a light on any evidence that would suggest that those structures are operating in some kind of opaque manner or have atypical tax arrangements. Those are matters that we want to eradicate in order to ensure that we've got a fair system of taxation operating.

Given the enormous global momentum that is gathering towards ensuring that firms pay their fair share of tax, this piece of legislation before us this evening is in the public interest. It's in the public interest that shareholders have a lot more information to hand about the companies that they might be investing in or taking an interest in in any way, shape or form. There are very good reasons why we are pursuing this legislative agenda in the House of Representatives this evening.

The people of Newcastle, who I represent in this chamber, are hard workers. They're paying their fair share of tax. We have many small businesses that are making terrific contributions to the vibrancy of our communities. They are people who are working hard, trying to make ends meet and who make extraordinary contributions towards our local community as a result of their hard work. Those small businesses are also paying their fair share of tax. These people and these small businesses don't have the millions of dollars at their disposal to run off and get advice on how to avoid paying taxes. Let's not mince words here: that's exactly what large multinational entities are doing. They have no allegiance to this nation or to any one particular place. They like to be regarded as global citizens when it suits them—they can avoid paying taxes in any nation in which they operate. It brings the reputation of global multinational companies into disrepute when there is no allegiance to any nation anywhere—when large powerful entities choose not to make a contribution and pay their fair share in any nation.

In Australia, we have a particular interest in making sure that those global entities do pay their fair share of tax, because we know that taxation in Australia is put to good use. It's part of how we establish a fair and equitable society. People pay their taxes, and those funds are distributed to provide essential, vital services for our citizens. Whether it's the provision of our tremendous universal healthcare system, Medicare, whether it's access to quality education or whether it's ensuring that we pay our workers decently and provide safe, respectful workplaces, these are important projects that our taxation system helps underpin, across Australia and in our local communities. That's why Labor took to the election campaign a commitment to ensure multinationals pay their fair share of tax and a commitment to evening out the playing field. It has to be said that the playing field has been very skewed towards large entities with almost unlimited funds and legal advice at their disposal to avoid paying their fair share of tax.

These reforms, as I said, are going to help hold companies to account, especially large corporate groups, the ones that tend to think they belong to no-one and are somehow above the law. Well, that's not going to be the case in our nation. These amendments are about making things more transparent so that large multinational enterprises are competing in a manner that is apparent to small businesses and workers, who are already paying more than their fair share of tax. In recent years we've witnessed a most alarming trend of corporations exploiting loopholes that exist in the current system. They engage in 'tax planning', which is singly focused on avoiding paying a fair share of tax. This not only erodes public trust and confidence, but it also puts a grossly unnecessary burden on hardworking taxpayers—working men and women who are doing all of the heavy lifting, not just in terms of the labour they provide and the productivity they ensure for our nation but in terms of the dividends they pay back through their taxes. Those workers and those small and medium-sized businesses have told us well and truly that they want to see everybody making a fair contribution, not just them. The current system is undercutting the existing structures that are meant to ensure an equitable redistribution of funds for the essential public services that I spoke about earlier. That's ensuring that Australian citizens, wherever they live—it doesn't matter what your postcode is or what your pay packet or bank balance looks like—should be assured of essential public services, and that's what our taxation system provides.

The OECD estimates that base erosion and profit shifting now costs countries between US$100 billion and US$240 billion—really eye-watering figures—in lost revenue every year. That figure is growing annually. It's already an enormous figure. I would suggest that it's really quite difficult for most Australian people to even imagine what US$100 billion looks like, or US$240 billion. But we know that that is the loss year in year out and that that figure is indeed growing. That's the equivalent of at least four to 10 per cent of global corporate income tax revenue—just gone, No-one's got access to it; it is absolutely gone. That means that governments right across the world—it's not just a problem for the Australian government—are denied hundreds of billions of dollars that should be going towards providing services and infrastructure and that should be lowering the tax burden on workers and reducing debt for nations.

But all that potential is lost when companies are fully exploiting loopholes and getting so-called tax planning advice that enables them to dodge their responsibility of being decent global citizens. It undermines the fairness and integrity of our taxation system here in Australia, and, as I said, it's unfair to small business and other businesses operating in Australia that these big multinationals get a competitive advantage over them and can claim more of the market share because they're dodging their tax—and it's a dodgy practice—while Australian companies are paying for that abuse. As I said, global multinationals can pay armies of lawyers and accountants millions of dollars, because they're aiming to reduce their tax liability by billions, so they don't mind investing a few mill into making sure their accountants get them out of having to pay their fair share of tax. All the while, Australian workers, families and small businesses are the losers.

Well, we're not getting to tolerate that on this side of the House. I don't think the Australian people want their governments, of any persuasion, to enable or turn a blind eye to these kinds of practices. This is utterly unacceptable, and it's especially unacceptable at a time when the Australian people are facing pressures around cost of living. Inflation has been hurting Australian families and Australian workers. And while inflation is easing, thanks to the fiscal responsibility of the Albanese Labor government as well as the hard work of the Australian people—let's never forget that—I know that many people in my electorate are still finding the cost-of-living pressures very real, very significant, and are still finding day-to day expenses extremely difficult to manage. So, it is only fair that multinational enterprises pay their fair share of tax so that individuals who are feeling those cost-of-living pressures are not put under undue pressure to fill the gaps and to fund the programs we all rely on, so that there is a more equal and fair system, when these multinationals get off scot-free. That is not the Australian way. That is not what Australian people want to see. This bill finally seeks to tackle the problem of corporate tax avoidance head on. I commend this bill to the House. I hope that all 151 members of this House of Representatives will see their way to support this important legislation.