Treasurer Scott Morrison has got himself into a public lather about the new divide, between “the taxed and the taxed-nots”. Sadly, by “taxed-nots”, he was referring to Australians living on the lowest incomes — and not the 675 major corporations who paid no tax whatsoever in 2013-14. Here, we’d like to put it to our Treasurer that if he’s so concerned about those among us not paying tax, he ought to look at the ways his government helps cover the tracks of multinational tax-dodging corporations.
The standout example in our work is the outrageous fees his government levies for access to the ASIC corporate database. And following on from this, his government’s controversial decision to sell off the database, putting it into corporate hands.
The ASIC registry provides academics like us access to crucial public information about private sector operations, such as company financial reports. It’s a basic but effective tool for detailed research to determine the relative tax avoidance of private companies.
In March and April this year, we undertook research to determine tax avoidance (and thus lost revenue) of a sample of private companies operating in Australia. As a starting point, we used the ASIC database to establish which companies are private, public or foreign-owned.
[Company tax: the Four Rentseekers sing a song of bullshit]
We obtained a list of 100 companies from the 1800 that are registered as private companies — information that is free to obtain. But to continue with our research, we needed to dig deeper and obtain company financial reports. ASIC stores this information, but to get it, you have to pay a fee — $38 per company filing. For two year’s worth of data across 100 of the top companies, that came at a cost of $7600. That’s thousands of dollars to look at a small slice of private companies in a restricted time period.
Our research found that 76 of Australia’s 100 largest multinationals had an average effective tax rate of 16.2%. That’s half the statutory 30% tax rate for companies in Australia, and a lower tax rate than for an average nurse. It’s also $5.37 billion in lost revenue over a two-year period. If Scott Morrison wants to balance the budget, this would be the place to start.
We launched our research a fortnight before the 2016 budget. The Senate Inquiry into Corporate Tax Avoidance made room for us to present our findings to them the very next day. This research helped drive a corporate tax crackdown in the 2016 budget, which had, as its centrepiece, one of the two key recommendations of our report, introducing a Diverted Profits Tax. These measures gained strong cross-party support, guaranteeing their passage through Parliament.
Our report was based on public information accessed through the ASIC registry — at a cost of $7600. We were only able to do this research thanks to crowdfunded donations by 1713 Australians through activist organisation, GetUp. We’re very grateful for these donations, but we shouldn’t need to rely on them to conduct investigations into corporate financial affairs.
[Rundle: you know who wanted the rich to pay tax? Hitler!]
A better way is possible. Financial reports are available for a small nominal fee (and in user-friendly formats) in other countries such as the US, Singapore and Sweden. In Hong Kong, New Zealand and the UK, this data is free — and so it should be. Multinational corporations exploit weaknesses and loopholes in national tax laws to shirk their tax responsibilities. The legal, aggressive tax minimisation techniques of large multinational corporations worth billions can only be described as morally bankrupt — they deserve every last piece of public scrutiny we can throw at them. As the Panama Papers and our Parliament’s own Senate hearings on corporate tax avoidance have revealed, we all reap the benefits of greater scrutiny of the private sector, particularly when it comes to their tax affairs.
Furthermore, problems with the database sell-off don’t stop at the exorbitant costs that restrict corporate research and transparency. Privatising the ASIC registry will result in companies on the register, taking charge of the register. And with it, our confidence in, and access to, the information within it.
Basic company information should be freely available to the public at all times. Without it, corporate transparency suffers. If the Turnbull-Morrison administration is so worried about the “taxed-nots”, the Treasurer should lower the barriers to access to the tools that allow us to see who’s following the rules, not erect new ones.
*Associate Professor Roman Lanis is at the School of Business at the University of Technology Sydney. He has been co-author or lead author of two of the largest research projects into corporate tax dodging, the 2014 ‘Who Pays’ report and the 2016 ‘Closing the Caribbean Connection’ report, and has given evidence before the Senate Corporate Tax Avoidance Inquiry.
Ross McClure is undertaking his doctoral thesis at the School of Business at the University of Technology Sydney. He was co-author of the 2016 ‘Closing the Caribbean Connection’ report and has given evidence before the Senate Corporate Tax Avoidance Inquiry.
The authors should be aware that information is dangerous in the current political climate & they have revealed inconvenient facts.
When Morrison first uttered ‘the taxed-nots’ I naturally thought he was referring to the Cayman set. Silly me.
Or the Hillsong Happy Clappers entertainment industry of which many believe Scott Morriscum is a clapping member.
I am sick of being referred to as a taxed-not because I now receive a pension after 67 years of employment. Don’t forget the GST which we all contribute.
Well done gentlemen.
Morrison, and the LNP, the taxed nots are always the poor and the rich aren’t mentioned. Well that surprises me greatly!
I wonder if Morrison was considering Trusts, family owned companies etc or did they happen to slip his mind also.
So not only do these companies want to rip off the general public, but the government wants to help them out by making sure we don’t find out about it.
Sounds like Talcum as his motley crew…who voted for these d..kheads anyway???
Once again, Morriscum shows his utter ineptitude with words and total ignorance of economics by using the “taxed nots”.
Can there be anyone in the nation who did not think, on hearing ungrammatical & ugly phoneme, of multi nationals, PMs with their fortunes in the Caymans and the ugly face of Moloch, the mudorc hissownself?