Corporate tax secrecy laws passed the Senate last night. But what will they mean?
Late last night, Parliament passed legislation on corporate tax dodging.
Depending on who you’ve been listening to, this is either great news, or terrible news — and so far, the headlines are more focused on political in-fighting than on the legislation itself.
So who’s right? What actually happened?
Here is the lowdown of what you need to know about these new laws:
The good news? The laws passed late last night mean that 281 large private companies will now have to reveal how much tax they pay. That’s great news in isolation, and a good step forward — some of our richest companies won’t be able to get away with paying less tax than everyday Australians any longer. At least not without the rest of us knowing about it. The new laws also introduce measures such as ‘country-by-country’ reporting that will help in the global push against corporate tax dodging.
The not so good news? 600 other major Australian companies will still be able to stay tight-lipped about the details of how much tax they pay. And there is a provision that reduces penalties for international profit shifting if the company’s position is “reasonably arguable”, which means that multinationals may continue to exploit loopholes and dodge paying their fair share of tax.
In all likelihood, billions will still be lost that could otherwise have been invested in our schools and hospitals.
It’s a messy end to what’s been an incredibly rocky road for this piece of legislation. Last night’s compromise was just the latest instalment in a story where the Turnbull Government has fought tooth and nail for Australia’s biggest private companies — such as those owned by James Packer and Gina Rinehart — to be able to keep their tax records secret. Last month, the Coalition were so desperate to keep the tax details of some of the biggest companies secret that they voted down their own corporate tax dodging legislation to avoid a Senate amendment that required tax transparency. (Among their reasons was the risk that billionaires could be kidnapped if their tax details were published — surely one of the most farcical excuses for refusing to pass a law in 2015.)
When it comes to keeping the tax details of some of Australia’s biggest companies hush-hush, the Turnbull Government won out. Come mid-December, we may still not know whether companies owned by the likes of Gina Rinehart and James Packer paid any more tax than everyday Sue.
Regardless of which side of politics you’re on, or your take on the steps it took to get there, here’s our read: the corporate tax secrecy laws passed last night are an incremental step forward to more tax transparency, and less tax dodging. The laws don’t go far enough, and they’re far from perfect, but at least they’re one step in the right direction. It’s thanks to pressure from members of the GetUp community, along with many other groups, that we’ve gotten this far.
The next challenge will be making sure this doesn’t take the fight for greater tax transparency for all companies off the agenda. More to come in the coming weeks.
Who’d have thought an issue like corporate tax could provide comedic relief? The debate of this bill was one of 2016’s most theatrical — check out some of the highlights from the debate here — featuring liberal use of the word ‘boofhead’, and what appears to be a threat from Senator Bill Heffernan to take the fight outside…