Commonwealth contractors cash in as Coalition flip flops on tax crackdown

The CPSU has condemned the Abbott-Turnbull-Government for breaking its promise to establish a register to stamp out tax avoidance by multinational corporations, saying it gives a free pass to companies reaping hundreds of millions of dollars through lucrative Commonwealth contracts.

Minister Kelly O’Dwyer first announced the Government’s commitment to establish a registry of corporate beneficiaries in early 2016, and Assistant Treasurer Stuart Robert reaffirmed it as recently as December, but the Department of Treasury has now bizarrely indicated the Government has never made such a commitment.

A CPSU commissioned report last year from the Centre for International Corporate Tax Accountability and Research (CICTAR) examined the aggressive tax minimisation strategies used by multinational companies holding Australian Taxation Office contracts, recommending full disclosure of beneficiaries as one of six steps to make corporations pay their fair share of tax.

CPSU Assistant National Secretary Michael Tull said: “We knew the Abbott-Turnbull-Government was on a go slow when it came to tackling multinational tax avoidance, but it’s now become clear the Government has been slowly going nowhere. This is a betrayal of ordinary Australians. Making multinational corporations pay their fair share of tax would mean more money for essential public services and permanent, quality public sector jobs.”

“The Government shouldn’t be letting any company off the hook when it comes to paying tax, but the stakes are even higher when we’re talking about multinational corporations that the Government itself is throwing money at through lucrative Commonwealth contracts. The Coalition has replaced in-house expertise and permanent, quality public sector jobs with profit hungry companies that often use extremely aggressive tax minimisation strategies.”

“This situation once again shows that the Abbott-Turnbull-Morrison Government is far too cosy with big business, whether it’s shielding the banks from a Royal Commission or keeping the complex corporate structures and tax affairs of major Commonwealth contract holders a secret. A good Government would put the needs of the Australian public before those of multinational corporations. We’re encouraged that Labor has committed to making this registry a reality, and taking other meaningful steps to clamp down on tax avoidance.”

CICTAR Principal Analyst Jason Ward, who authored last year’s report, said: “Complex ownership structures and a lack of transparency are key features of tax minimisation as is pursued by the ATO contractors examined in the report. Public registers of beneficial ownership have been set up in several jurisdictions and are now part of emerging global standards. Making public who owns a company is a simple but effective way to discourage profit shifting and other tax minimisation schemes.”

“As the report outlined, it’s deeply disturbing that the ATO’s own contractors would provide such clear examples of a lack of transparency and tax avoidance. It shows there’s one rule for ordinary people who pay their tax without fuss every year and another set of rules for companies being handed millions of dollars in taxpayer money through lucrative Government contracts.”

“Setting up a registry would be a cheap, simple and effective first step towards making companies pay their fair share of tax. The fact the Government has spent nearly three years talking about this and has achieved absolutely nothing begs the question, what are they scared of?”