australianvoice (australianvoice) wrote,
australianvoice
australianvoice

Greens Helped LNP Hide Tax Information on 600 Corporations

WE NEED TO STOP TAX EVASION BY LARGE CORPORATIONS
The LNP government has said more must be cut from the budget because there is not enough money to cover its commitments. However the realization that so many large companies pay little or no tax at all has created political pressure to do something about tax evasion as a way to increase government revenue. Interest was focused on a list of about 900 companies with revenues over $100 million. Late in 2015 “the crossbench and Labor had the numbers to insist the government's multinational tax avoidance bill could only pass with an amendment to force all companies with revenues of $100 million or more publishing their tax contribution.”(GD)

In December 2015 there was a bill before the Senate which could have forced these 900 companies to reveal how much money they contributed in tax to the Federal budget. However the LNP wanted to hide this information from taxpayers for obvious reasons. Both the government and the companies which paid little or not tax would have been subject to greater public pressure to help with the “heavy lifting”. Here was another stalemate in the Senate between the LNP government and the crossbench and Labor.



SENATOR DI NATALE SAVES THE DAY FOR THE LNP

Like many other bills brought before the Senate, it seemed that this bill was doomed. However Senator Di Natale, unlike Christine Milne, did not object to doing deals with the LNP. To “resolve” this deadlock, Senator Di Natale worked quietly with the Treasurer to change the bill into something he and the Greens would accept. Instead of forcing all companies with revenues greater than $100 million per year to publish their tax contributions, the cutoff was changed to $200 million.

With this nifty move, the LNP (and the Greens) could say they had actually done something to reveal information about how much tax is paid by large corporations. The Greens insisted they “had a choice to either criticise from the sidelines and let multinational tax avoiders off the hook, or pass laws that force much greater tax transparency.” In other words, it was better to do something this year – the bill came into effect on 1 January 2016 – than nothing. But the result of this "compromise" was that 600 of the 900 companies involved will avoid disclosing how much tax they pay.

Labor was angry because the Greens’ deal had the effect of “shielding two-thirds of the companies that would have been brought into the light for the first time.”(GD) Further they thought that “Mr Morrison would have been forced to accept the exemption limit at $100 million by the end of the final sitting of the Senate.”(GD)


WHAT ELSE COULD THE GREENS HAVE DONE??

Still, even if Labor was wrong about this, the Greens had another choice. There were more than just two alternatives. Rather than sitting on their hands or letting 600 companies off the hook, they could have accepted the non-passage of the bill. This would have allowed them and Labor to use this unwillingness to disclose tax information of the largest companies to attack the LNP in the next election. By making the deal they did, they not only took the heat off many large corporations, they also deprived themselves and Labor of a significant issue to attack the LNP as a government determined to hide the extent of tax evasion from the public.


DI NATALE HAS PROTECTED MEMBERS OF A VERY PRIVILEGED CLUB
In 1995 when company law was consolidated, new reporting requirements were brought in for large private firms. However since all large companies in business at the time had never been forced to make such reports, it was decided to “grandfather” the new rules. This meant that these firms are “exempt from the new requirements, leaving a list of companies that did not have to lodge full financial statements with the Australian Securities and Investments Commission.”(BL)

The companies who do not need to provide such reports constitutes “an exclusive club that boasts among its members some of Australia's corporate elite including the Pratt family's Visy and the private investment vehicle of Perth billionaire Kerry Stokes, along with a clutch of well-known brands including Seafolly swimsuits and the Roger David menswear empire.”(BC)

These companies are not only important because of their tax evasion, they are also very important donors to the Liberal Party. Bertard Keane has written that “the government is desperate to protect from financial disclosure some of Australia's most powerful families -- including some of its biggest donors.”(BL) Keane's assessment of the Greens' deal is the same as that of Labor:

“In a compromise with the Coalition today, the Greens have opted to preserve the provisions (ie. non-reporting for the “grandfathered” large firms) and merely remove a minority of those who benefit, at the very wealthiest levels above $200 million. The bulk of those who benefit from financial secrecy will continue to remain hidden.

“Naively, the Greens claim that this compromise 'will help build momentum to consign them [the exemption provisions] to the scrap heap' and promise they will 'work with Labor and the cross-bench to bring the remaining Grandfathering provisions before a senate inquiry.'

“Those benefiting from the Greens’ decision today have little to fear from a Senate inquiry. What they feared was the government, faced with not having its own legislation being passed by the Senate, being forced to remove these outdated provisions. Fortunately for these secretive high-wealth individuals and big companies, the Greens have let them — and the government — off the hook.”(GDD)


SOURCES

GD: Greens deal with Scott Morrison on tax shield sparks Labor fury
http://www.smh.com.au/federal-politics/political-news/greens-deal-with-scott-morrison-on-tax-shield-sparks-labor-fury-20151203-gle9ft.html

GDD: Greens' dirty deal lets richest off the hook
http://www.crikey.com.au/2015/12/03/greens-dirty-deal-lets-richest-off-the-hook/

BL: Big Liberal donors a protected species on disclosure
http://www.crikey.com.au/2015/11/24/big-liberal-donors-a-protected-species-on-disclosure/?wpmp_switcher=mobile

BC: Behind closed doors: an exclusive club is determined to stay private
http://www.smh.com.au/business/behind-closed-doors-an-exclusive-club-is-determined-to-stay-private-20120720-22fne.html
Tags: archive, australia, australian politics
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