“Modest and responsible” is how Labor describes its plan to increase the tax take from multinational corporations by limiting deductions and implementing the OECD’s 15% minimum tax.
Along with its cut to public service consultant spending and an end to the Coalition’s rorting and pork-barrelling, it forms the centrepiece of the opposition’s decidedly unambitious fiscal plan.
The multinational crackdown will raise just $1.89 billion over the forward estimates, partly because of a delayed introduction until 2023.
No one will ever vote against forcing multinationals to pay more tax. It’s as near to a victimless crime as you can get in tax policy. But there is a subset of multinationals who will continue, under Labor’s “modest and responsible” tax reforms, to get away with the biggest theft in Australian history.
Few Australians appear to know about the failure of multinational fossil fuel companies to pay anything to Australians for the privilege of making tens of billions from the sale of Australia’s oil and gas reserves. As Crikey reported yesterday, global giant Chevron has actually been paid more by taxpayers in subsidies for its failed Gorgon carbon capture and storage project than it has paid in tax to 2020, despite generating $37.6 billion in revenue since 2016.
Chevron has now flagged that the massive surge in export revenues from rising global energy prices means it will finally start paying tax in Australia — $650 million in 2022 and more beyond that.
Other multinationals have also paid no tax or petroleum resource rent tax (PRRT) despite massive revenue from oil and gas exports. Between 2015 and 2020, Exxon earned $57 billion in revenue, claimed it made zero profit, and paid no tax. Nor has it paid any PRRT.
Shell earned $25 billion revenue, claimed a total profit of $616 million, and paid zero tax and zero PRRT.
Japanese company Inpex made $7.6 billion in revenue, claimed profits of $39 million and paid no tax or PRRT. The relatively new Ichythys project, run by Inpex, Total and other companies, generated more than $7 billion in revenue since the first gas was shipped in 2018, without paying any tax or PRRT.
Remember, these figures are all before the dramatic surge in energy prices that has seen gas export revenue double in the past 12 months.
Local companies like Santos are in a similar position with both their onshore and offshore projects. Santos made $21 billion from onshore and offshore gas in the five years to 2020 and claimed just $73 million in profits and paid no tax and about $200 million in PRRT.
Woodside earned $36 billion in export revenue between 2015 and 2020, claimed just under $8 billion in profits, and paid $250 million in tax and no PRRT.
As with Chevron, Santos and Woodside are receiving more in subsidies from the Morrison government for scams like carbon capture and storage than what they are paying in tax.
Labor in conspicuously silent on why fossil fuel multinationals and Australia’s own fossil fuel giants should be allowed to in effect capture Australian resources for themselves and make billions off them without paying Australians for the use of these finite resources — let alone the catastrophic damage they are causing via carbon emissions.
The only party that has raised the issue of the failure of multinationals to pax tax or royalties for offshore gas has been the Greens, who want to replace the broken PRRT.
Fiscally that would be the least damaging new tax possible, with the burden falling on mostly foreign shareholders enjoying superprofits from Australian natural resources.
The companies would argue that a new tax would deter investment, but the current scramble to open new gas fields despite the need for an urgent transition away from fossil fuels and a growing reluctance of major investors to support new fossil fuel projects suggest very little is likely to stop investment while energy prices remain high.
Bernard, I am surprised that you of all journos aren’t aware that there are some Policies you campaign on to win Government and entirely different Policies you campaign on to win a second or third term.
As Bill Shorten found out much to his and Australia’s chagrin.
Why would taxing multinationals fall into the same category as changing pensioners investment and income options?
Coz it suits Moloch et al to conflate them?
So vote Green.
And then ALP ahead of the Coalition. Whatever you think of Labor, #scottyfrommarketing being rewarded with another 3 years as PM would be a disaster.
The Liar From The Shire.
The Crook From Cook.
The Bogan With A Slogan.
The thought of this corrupt (allegedly) government serving (Oops! my mistake), receiving another term makes me feel physically ill.
Both the ALP and the LNP have had sitting PMs defenestrated for threatening fossil fuel profits.
Beyond that the horse has bolted WRT local resource billionaires. Would a few well targetted heart attacks turn us into Norway over night? I doubt it – the mostly faceless global giants will still be there.
Why is it so hard to understand that Labor wants all the focus on Morrison and his abysmal record? You mightn’t agree with the tactics but it’s easy to see where they originate.
I would think Labor would want to leave this alone until/ if they can get a decent majority in Parliament. The last time they tried to introduce a tax like this the fossil fuel companies threw everything they had at it and newspapers like The Age ran daily stories from minerals companies, including a lot of opportunists and shysters, about how the world would come to an end if this tax was introduced. Admittedly it was introduced badly by Kevin Rudd. However I would think they’d want to be on secure ground before trying again.
The clear ‘take-away’ message for me after reading Bernard’s excellent piece is that it provides further evidence (as if any were really needed) in support of my hypothesis that this country, like any so-called ‘western democracy’ is run by plutocrats who have cleverly arranged the political landscape so that it appears to be democratic to anyone who cares to give it only a cursory glance; (and that is the only type of examination that they want the general public to be giving politics or economics).
Clearly the robber barons who run this and other similar ‘rip-off rackets’, as Bernard so accurately describes them, are laughing all the way, not only to the bank, but to their executive jets, multi-million-dollar yachts and mansions.
The ruling class/establishment, call them what you will, claim that we have a democratic system, so shut-up and don’t complain. If you don’t like the LNP then vote for the ALP, or vice-versa. You have choice, they scream!! However, Bernard’s essay clearly demonstrates that when it comes to the really serious matters there is no true choice. Real choice is a fantasy. It is smoke and mirrors and none of the mainstream media will call it out for what it is. Does that surprise anyone? Well, it doesn’t surprise me, as the mainstream media, with the exception of the ABC is run by large corporations who are part of the scam. The ABC knows full-well too, that to attempt to expose this sort of rip-off would risk crucifixion at the hands of politicians who exist to serve their corporate masters and they will tolerate no real questioning of the status-quo.
Finally, I note that Bernard, quite correctly, notes in his final paragraph, that:
“The companies would argue that a new tax would deter investment, …..”
Not only do companies frequently raise this ‘investment deterrence’ argument when faced with the prospect of taxation or some other hindrance to their rorting, they also threaten to move their operations offshore. These threats amount to nothing more than economic blackmail and a strike by capital. So how should we deal with a situation like this where the corporations appear to hold the ‘whip-hand’ and seem to be in an invincible position. I will tell you how, you NATIONALIZE them (with or without compensation, depending on the circumstances) and run their industries as public services in the interests of all Australians.
Cheers,
Comrades!
With you 100% Robert.
And to those who think Labor’s failure to propose acting on this is motivated purely by an aim to get into govt now and act later, I say look at how many of their former high-flyers have gone on to lucrative careers in the fossil fuel world.
Both major parties are part of the plutocracy.