Protecting tax privacy for the uber-rich is a strange thing to take a stand on
The Coalition’s decision to vote down its own measures to crack down on multinational tax avoidance is just the latest instalment in an increasingly unfocused taxation debate
Well that’s a courageous decision – in the Sir Humphrey Appleby sense of the phrase.
Just as it is encouraging a “debate” about how ordinary Australians might have to pay more goods and services tax, the Turnbull government is insisting that private companies controlled by the wealthiest Australians should not be forced to publish the details of the tax they pay.
And it is so determined this should not happen, it is willing to vote down its own budget measure to crack down on multinational tax avoidance – due to start on 1 1 January – until the Senate backs down on the idea that private companies should disclose their tax details.
The stand-off over the two otherwise unrelated tax laws is part tactics and part apparent stubbornness on the part of treasurer Scott Morrison. But as the tax reform discussion continues in an entirely unfocused – some would argue out of control – way, protecting the tax privacy of the uber-rich is a strange thing to take a stand about.
The Coalition decided back in March that private companies such as those controlled by the billionaire mining magnate Gina Rinehart should be exempt from new laws requiring the publication of their tax information because of fears this could jeopardise their safety and possibly lead to kidnappings. Other companies raised concerns about providing information to companies they supply, like Coles or Woolworths.
Last month, when the bill came before the Senate Labor forgot to call for a voting division and the bill passed without the transparency requirement.
This week, after revelations that at least some of the lobbyists complaining about the issue had no members, the Senate amended a different bill – cracking down on multinational tax avoidance through structures that divert billions of dollars in profits offshore.
It reinserted the requirement for big private companies to provide their details, with the small variation that companies could apply to be exempted if they could prove possible commercial disadvantage.
Morrison told the lower house the government rejected the tactic and it voted down the amended multinational tax bill – setting the stage for a showdown with the senate.
But if the upper house doesn’t blink then the Coalition will be in the position of not doing anything on multinational tax avoidance and also protecting the wealthiest Australian private companies (one in five of which pay no tax according to the Tax Office) from the kind of transparency that can often force change. One Liberal senator suggested the transparency laws were bad because companies could be “shamed into paying more tax than they are legally obliged to”. Not many other people think that is an actual problem.
And at the same time as it is defending those kind of views, the government will be discussing an increase or broadening of the GST – paid by everyone. That discussion, which will apparently roll on until a green paper arrives sometime next year, is already causing uncertainty in the community and real nervousness on the coalition backbench.
Having a rational policy discussion is good, but when Malcolm Turnbull said fairness would be at the centre of everything the government does, this can’t be what he had in mind.
