When someone told me a few weeks ago James Hardie didn't pay one dollar of company tax in Australia last year, I got pretty annoyed.
When I found out that James Hardie made annual Australian profits of more than $200 million, and its CEO pockets $12 million every year, I was gobsmacked.
But when I saw it reported that James Hardie is minimising the tax it pays in Australia through a complex set of tax havens in countries such as Bermuda, which give them an average effective tax rate of zero, I was livid.
How is this acceptable legally or morally? How is this fair? Why do Australians who go to work every day stump up their fair share of tax while multinationals can find loopholes to minimise theirs?
While James Hardie is an extreme example, there's no doubt there are a number of large companies that dodge paying their fair share of tax.
Why should Australians work hard and pay tax if big multinationals get to play by different rules?
Why should local businesses face paying more tax than big multinationals because Australian businesses can't afford high-priced lawyers or an office in the Bahamas?
Australians are rightly becoming increasingly concerned that some large companies are shirking their obligations by putting in place complex schemes to dodge paying their fair share of tax.
We need a level playing field so the heavy lifting isn't done by Australian businesses and families.
Consider this: in 2012-13 companies moved more than $300 billion between their Australian arms and overseas parent or subsidiary companies.
The bottom line is our tax system should not get softer the higher it goes and how much tax you pay shouldn't be decided by how good a lawyer you have.
This week, I announced Labor's plan to help shut down loopholes that allow big multinationals to send their profits into overseas tax havens to avoid paying tax in Australia.
Our plan is designed to ensure a fairer deal by ensuring the competitiveness of Australian businesses is not undermined by an unfair tax system.
The plan includes measures that will stop big multinationals from double-dipping on tax exemptions and deductions across different countries.
We also want to strengthen the powers of the Australian Taxation Office so there's a more effective cop on the beat.
Labor is passionately pro-business, but multinational companies have to make their fair contribution, just like the rest of us.
Our plan will shift the tax burden away from Australian families and small business because for every dollar missed from these multinationals means another dollar families and small business have to pay.
Our plan will mean multinational companies will end paying about $2 billion extra tax in Australia more than twice as much as the Liberals' GP Tax is due to raise.
If Joe Hockey and Tony Abbott want to legislate these ideas I'm keen to make that happen. But already the Liberals are looking for every excuse in the book not to tackle this problem.
It's time for Mr Abbott and Mr Hockey to start doing some lifting instead of leaning.
This opinion piece was published in the Daily Telegraph on Thursday, 5 March 2015
MEDIA CONTACT: LEADER’S OFFICE MEDIA UNIT – 02 6277 4053
Do you like this post?