Sky News AM Agenda
06 Apr 2017
SKY NEWS AM AGENDA
THURSDAY, 6 APRIL 2017
SUBJECT/S: Multinational tax avoidance; Scott Morrison begging for help with his job; Turnbull Government’s $50 billion tax cut; Budget and commodity prices
KIERAN GILBERT: We're going to the Shadow Finance Minister Jim Chalmers. Jim, I know you've got your own strong views on multinational tax avoidance that you've made clear over a number of years now. But it looks like the ATO's taskforce has been quite successful on this front?
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Let's remember, Kieran, that these exact same companies are the companies that the Government wants to give a $50 billion tax cut to. So it's hardly a crackdown when you say that you want them to pay more taxes at the same time as you're saying that you want them to pay substantially less tax. That’s really the hole in the Government's argument. And Zed just lied to your viewers when he said that we didn't support the Diverted Profits Tax that just went through the Parliament. Of course we supported it. Our point is that it doesn't go far enough. In fact, it only raises about one-eighth of the amount of money that our superior policy to crack down on the complex gaming of companies' debt would raise and we want more transparency as well. So yes, you're right to say that, for some years now, Labor has had a comprehensive policy that deals with multinational tax avoidance. Of course the Australian Tax Office should crack down and apply the current laws. That's a given. But what we don't want to see is the Government give companies who are already avoiding some of their tax obligations another $50 billion tax cut.
GILBERT: What the minister said was the Multinational Anti-Avoidance Legislation - did Labor vote for that?
CHALMERS: We supported a stronger version of the first set of laws, but Zed was referring to the laws that just passed the Parliament as they relate to Google - the so-called Diverted Profits Tax. We supported that. We don't think it goes far enough. We think that there is more to be done, particularly as it relates to the way companies can game their debt obligations in complex ways to avoid paying tax here in Australia.
GILBERT: Let's move on. I think he might disagree with that, that he was talking about the legislation I referred to, but regardless of that, let's move onto the substance of it. Are you surprised that we're talking about such large numbers here - $3 billion, the bill that they've got to repay?
CHALMERS: I'm not surprised that the numbers are of that magnitude. We do have a substantial problem when it comes to multinational tax avoidance. It's a problem that we've been highlighting and responding to with serious policy development for years now. So I'm not surprised to see it at that magnitude. The ATO's job has been made a bit harder by the substantial job cuts at the Office. It's good to see them applying the current laws; it's good to see them cracking down. The point that we make is that we should be able to go further and it's absolute lunacy to give these exact same companies a $50 billion tax cut at the same time as the ATO is discovering that they're avoiding their obligations.
GILBERT: Mr Morrison is going to be making the case to big business that if they want the tax cut, they need to be out there arguing the case for it in terms of economic growth and job creation. Obviously you oppose that move anyway, but do you agree with the sentiment that there's a better view towards small- and medium-sized businesses than there are towards the big end of town when it comes to the general community?
CHALMERS: Probably, Kieran. But I think that Scott Morrison saying to the business community "you've got a reputational problem" is pretty funny really. If Scott Morrison tells you you've got a reputational problem, that's next level! He's reduced now to begging other people to do his job because he's proven not to be up to it himself. I spend a lot of time with the business community. I'm discovering that they have the same view of an increasing number of his colleagues, an increasing number of people in the community – he's not taken especially seriously. He's a much-diminished figure and all we get now are these sort of red-faced rants trying to pretend that his failures are somebody else's problem. The business community has been out there; sections of the business community have been out there wrongly, in my view, calling for Budget restraint at the same time as they want a $50 billion tax cut. It's been heartening to see that some other sections of the business community have pointed out rightly that this is not the be-all-and-end-all of growth; that there's not enough bang in this tax cut for $50 billion bucks; and that we should be focused on other things like infrastructure and human capital and all of these other important tasks, which would actually deliver growth and jobs in our economy. Not the miniscule benefit of this $50 billion tax cut; and the fact that Scott Morrison can't even release modelling of what that benefit would be for the deal done in the Senate last Friday.
GILBERT: You look at the revenue that is going to hit the bottom line from increased commodity prices, we could see a windfall - Fairfax suggesting it's a $4 billion windfall for the Budget on last year's estimates, that would be a significant reduction boost to the deficit reduction strategy of the Government if it is realised as expected.
CHALMERS: Well it is true that prices have been up over recent months and that will have a positive benefit on the Budget. I think what that means is the Government really has no excuses left for the mess that they've made of the Budget, remembering of course that the deficit for the year that we are in now has blown out from 10-and-a-half billion dollars in their first Budget to 36-and-a-half-billion dollars in their latest update. So you've got to see that $4 billion improvement in commodity prices in the context of a $26 billion blowout. You've also got to see it in the context of a $50 billion tax cut. We're talking about a $4 billion improvement that the Government wants to jump up and down about, which comes as a consequences of the terms of trade and higher commodity prices at the same time as they want to shovel $50 billion out the door; at the same time as they've tripled the deficit; the same time as net debt has blown out by $133 billion over the course of this Government. So we've got to put that report into perspective.
GILBERT: And also into perspective in the sense of slower jobs growth as well and wages growth too, so there'll be those countering elements to the higher commodity prices when we see the Budget numbers early May. Jim, we'll talk to you soon.