Making sure multinationals pay their fair share

Which political party just put out a media release headed “Making sure multinationals pay their fair share”?

It’s hard to tell nowadays.  Would it be the Labor Party or the Liberal Party?

If you guessed that this was another tax grab announcement from a soon to be incoming Labor Government, you would be wrong.

This was this morning’s announcement from the soon to be outgoing Liberal Government and its soon to be outgoing Treasurer, the Hon Scott Morrisson.

Read it and weep – Making sure multinationals pay their fair share.

The Turnbull Government is continuing to ensure multinationals pay their fair share of tax – today releasing revised exposure draft legislation to address hybrid mismatch arrangements.

You really have to wonder about this government and whether it needs to be medicated for bipolarity.

A new bank tax is good because it is pro-productivity, but a company tax cut is also good because it is pro-productivity.

A company tax cut is good because it will attract foreign investment but a foreign company tax increase is also good because it will attract foreign investment.

MAKE UP YOUR MINDS.

Does the Turnbull government believe tax cuts are good or bad?  Is there some big picture tax reform project or is this about economic death by a 1000 tax increases?

Or is this about re-balancing the impost of taxation?  If so, say that and show us the cuts rather than perpetuating this fair share crap.  Or is that organically sourced, socially justified, fair share of tax.

These people seem to have no memory.  They propose tax cuts to go with tax increases.  Yet every tax increase is legislated and every tax cut is blocked.  Remember the “budget repair levy”.  Charlie Brown and Lucy on repeat.

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64 Responses to Making sure multinationals pay their fair share

  1. Bruce of Newcastle

    When Ireland lowered their company tax rate to 12.5% companies fell over themselves to move their HQs there. “Celtic Tiger” became a thing.

    So if we lower our rate to 10% the same will happen here. Then they will be paying tax here, and transfer pricing to here, so they can pay a lower rate than elsewhere. Voila: more corporate tax.

    (Keep in mind that because local dividends are franked the effective tax rate on corporations is whatever rate the dividend receiver gets, which may be 47% if they are a high income individual. Thus the tax take doesn’t change as much as the headline rate change implies.)

  2. Neil

    Politics means the Coalition has to do something about alleged multi-national tax avoidance. The ATO recently audited Apple and found nothing wrong.

  3. Slim Cognito

    WTF is a “fair share”?

    Are those people who pay nothing paying a “fair share”?

  4. H B Bear

    The Waffleworth Coalition Team formerly known as the Lieborals continues to fight on Liars territory. Didn’t Sun Tzu have something to say about this? Of course when you have increased taxes as a deficit levy and taxed superannuation you don’t have much territory to defend.

  5. max

    Scott Morrisson
    he knows his voting base are uneducated,low intelligence moruns.

    vote for me, free money no work required. I will protect you from all enemies real and imaginary.

    ‘From cradle to grave’
    all working people should pay a weekly contribution to the state. In return, benefits would be paid to the unemployed, the sick, the retired and the widowed.

    well,well,well, number of working people shrinking, and number of sucking leeches growing.

  6. The BigBlueCat

    Bruce, exactly what I think … make Australia the tax haven that Ireland became, and the IP based companies will beat a golden path to our door. The quid pro quo is that the individual taxpayer gets hit via the lower franking credits, but that ought to be offset by higher dividend returns generally (less EBITDA going to paying company tax).

    I dunno if 10% is the right figure, but it needs to be an internationally competitive and desireable rate of company tax. In any event, it’s the individual taxpayer that carries the tax burden in this country, through PAYG, GST and the impact of dividends on their marginal tax rate (not totally offset by the franking credit in most cases).

    But I also note that “fair share” to most of the left means “pay more”. That is merely the politics of greed and that road leads to all sorts of ills. Surely “fair” means every company is subject to the same rules. Unfortunately the LNP is playing to the electorate rather than being pragmatic and defending good policy.

  7. struth

    Does the Turnbull government believe tax cuts are good or bad?

    It’ll get back to you when it’s asked the press gallery what it thinks.

  8. Rohan

    Neil
    #2654405, posted on March 7, 2018 at 12:08 pm
    Politics means the Coalition has to do something about alleged multi-national tax avoidance. The ATO recently audited Apple and found nothing wrong.

    The ATO audit Apple (Aust) every year and also sign off with the ATO their purchase price of their products from Apple (Ireland) EVERY SINGLE YEAR. And Apple (Aust) have never operated outside of Australian corporate and tax law. But apparently that isn’t enough. They have to hand over all their profits as well.

    ScoMo is just another socialist shill trying to outdo the ALP and Greens to save his cushy job.

  9. Neil

    The retarded lefties now want multi-nationals to pay tax on income not profit.

    This tax avoidance crap is just a smokescreen to cover the reckless spending started by Rudd/Swan and continued by the Coalition. They tried in 2014 to cut some spending but were blocked by the Senate. Then it looks like the Coalition gave up. The budget will never get back to surplus unless there are spending cuts.

  10. Terry

    ScoMo is just another socialist shill trying to outdo the ALP and Greens to save his cushy job.

    THIS!

  11. Roger.

    Does the Turnbull government believe tax cuts are good or bad?

    While we ponder that…heard on the state broadcaster recently, from the mouth of someone they call their ‘Senior Business Correspondent’, a journalist with 30 years of experience:

    “Company tax cuts are a handout.”

    This – not far short of the Marxist notion that the state has title to all wealth – is what we are presently up against.

  12. Mother Lode

    Fucking Liberals.

    They would rather stick their ‘allies’ in the back than stand up against their enemies.

    And, soon those ‘allies’ will join there enemies.

  13. Neil

    ScoMo is just another socialist shill trying to outdo the ALP and Greens to save his cushy job.

    Perhaps but politics means he has to look like he is doing something to keep the lefties quiet. I doubt he actually believes it.

  14. Sorry. I can’t fault the government for having a go at unwinding sham transfer pricing arrangements.

    Nor can I really complain when multi-nationals put those arrangements in place because company tax in Australia is so un-competitive.

    But there is a balance to be achieved and describing that as a “fair share” of tax is not a bad short-hand way of doing so.

  15. Mother Lode

    Oh, and note the use of that shadowy phantom of a justice: Fair.

    I remember Gillard using that word whenever she wanted to bribe a constituency.

    Couldn’t use expressions like ‘reward’, ‘encourage’, or even ‘sound’.

    Bribes do none of those things.

  16. mh

    From the ATO website:

    Ensuring corporate taxpayers pay the correct amount of tax

    As administrators of a very complex system, we monitor the environment to ensure that the tax law is achieving its intended outcomes. An effective, functioning tax system supports the social benefits we all enjoy. Our tax system relies on a high level of willing participation. This is built on both community confidence in the ATO as administrator of the system, and by taxpayers paying the right amount of tax.

    Based on our detailed knowledge of the tax system as it operates in practice, most large corporate groups pay the right amount of tax
    . Our Tax and Corporate Australia publication details how we assure that corporate taxpayers pay the right amount of tax and how we assist them to do so. It sets out the ways we are improving the system for those who want to comply, and how we are taking firm action against those who choose not to. It also discusses our areas of focus, and details our past compliance performance.

    For private companies, we use sophisticated data-matching techniques to detect their relationship with other private group entities, including wealthy individuals, companies, trusts and partnerships. We refer to this as a ‘private group approach’. This approach enables us to risk-assess compliance behaviours and target our assurance approaches at a group level.

    We cross-reference our understanding of market performance against other measures on an ongoing basis. Any anomalies are identified, analysed and mitigated – through improvements to our detection processes or further review – to ensure the ongoing health of the tax system.

    I would have a guess that someone like Mark Textor is advising the Liberals that they need to occupy the centre ground, and that means bashing the multi-nationals solely for political purposes.

  17. NB

    They set up red pill and blue pill teams and then implemented the advice from both. That’s fair.

  18. struth

    Perhaps but FAILED politics means he has to look like he is doing something to keep the lefties quiet

    FIFY

  19. HBB;

    The Waffleworth Coalition Team formerly known as the Lieborals continues to fight on Liars territory. Didn’t Sun Tzu have something to say about this?

    Yes:
    “Something something something, poor white trash, something, stupid bastards – you losers.”

  20. Diogenes

    The EU are there already

    Bruno Le Maire, France’s minister for the economy, has revealed that a plan to levy a special tax on Google, Apple, Facebook, and Amazon will soon be revealed by European authorities.

    Le Maire told French newspaper Le Journal du Dimanche “A European directive will be unveiled in the coming weeks, the minister reveals, and it will mark a considerable step forward.”

    The minister told the paper that a tax of between two and six per cent has been considered, with the proposal to be “closer to two than six.”

    The proposed tax will be levied on the four companies’ turnover, rather than profits. Taxing turnover is hoped to offer a simple way to tax the companies, as all use legal-but-cynical ways to minimise their taxable income. Le Maire added that a turnover tax is seen as being quick to implement and that the four companies know they’re going to have to pay more tax in Europe, so may be amenable to such an arrangemen

    Source : El Reg https://www.theregister.co.uk/2018/03/05/europe_plans_special_tax_for_google_apple_facebook_and_amazon/

  21. duncanm

    You people seem to be confounding the messages broadcast with the government’s actual policies.

    The various brain-farts emanating from the government are there to placate the leftist shills and noise-makers. This government is all about perception, not deeds.

    (* – caveat. What their actual stance on these matters is, is anyone’s guess)

  22. EvilElvis

    Add it to the new energy advertising, the bullying advertising etc et fucking cetera…

    Do not vote for them, ever again. And implore your friends and family not too.

  23. struth

    Where are the opposition voices.

    Bernardi, we can’t hear you…………………………….

    It may be because you are being silenced by the MSM but you’d better do something about that, soon.

    We note that they let your statement regarding nuclear power through, of course.
    Please watch Trump campaign reruns.

  24. Tim Neilson

    duncanm
    #2654495, posted on March 7, 2018 at 1:51 pm

    Have you read the “anti-hybrids” draft legislation and Explanatory Material?

  25. Bruce of Newcastle

    On the other hand since Facebook, Twitter and Google are actively suppressing conservative search results, hiding righty comments and articles, demonetizing righty Youtubers and shadowbanning political opponents, maybe the fair thing is a special tax on them which is then given to rightwing media, bloggers and video people.

  26. Dr Faustus

    When Ireland lowered their company tax rate to 12.5% companies fell over themselves to move their HQs there. “Celtic Tiger” became a thing.

    So if we lower our rate to 10% the same will happen here.

    They did indeed.

    But bear in mind that a substantial part of that motivation was relatively very low wages and low infrastructure costs in an EU country. And, in some cases, the availability of the Double Irish with a Dutch Sandwich and a Pint of Guiness tax avoidance structure.

  27. stackja

    Liberty Quote
    There is no general case for indiscriminate “trust-busting” or for the prosecution of everything that qualifies as a restraint of trade. Rational as distinguished from vindictive regulation by public authority turns out to be an extremely delicate problem which not every government agency, particularly when in full cry against big business, can be trusted to solve.

    — Joseph Schumpeter

  28. Jannie

    Multinationals are private empires, and they have no loyalty or friendship, only interests. They are not allies of the Left or Right, they are pure mercenaries.

    Selected multinationals will happily support the Green Left to destroy capitalism, or even The West, so long as they benefit. Multinationals are quite at home in totalitarian states, socialist or fascist, and prosper with monopoly privileges.

    The great Information virtual Cartel of Google, Facebook and Amazon are demonstrably supporters of the Left. Apple has assets on the ground, so is a slightly different case of control freak.

    When I see socialists trying to screw more taxes from the GAFA mob I feel like I have no dog in the fight. Best not to interfere when the bullies are fighting each other.

  29. Spring is coming

    Chuckled at ‘soon to be outgoing Liberal Government’ and ‘soon to be outgoing Treasurer’

    Can we shorten to ‘S2BO’

    Opportunity squandered. Would the next contestant step fwd!

  30. Tel

    When Ireland lowered their company tax rate to 12.5% companies fell over themselves to move their HQs there. “Celtic Tiger” became a thing.

    Ireland was (and still is) a cheap way to get access to the EU markets, that’s an advantage they have but Australia never will, unless there’s some foreign giant who thinks we could put in a good word for them with New Zealand, or Tonga.

    Due to British rule, when Ireland finally became independent it had basically zero industrial infrastructure and operated as an agricultural backwater. They made a holistic effort to go for the tech market and they had people willing to work. In this way, Ireland of the 1960’s was kind of similar to Australia of the 1800’s but not similar to Australia today. The foreign investment into Ireland (and the high debts that go with it) made a lot of sense, and it was backed up with Irish tertiary institutions willing to crank out genuine Engineers instead of socially responsible basket weavers.

  31. Dr Fred Lenin

    This confirms what I have been calling our political gangs for ages , the national gangrene lieboral Party is alive and kicking . Kicking you say? Well they are kicking the guts out of our industry and energy ,in a united slavish belief in the u.n.communust agenda 21 , And purge the liberal party of for the sujegation of the western world . Has to be the western world can you imagine those incompetent Narxist scum trying to subjugate a dysfunctional muslim or African shithole ,or China ,North Korea ,Cuba. Venezuela ,that would be hard work and Narxists have never been fond of that four letter word . Save Australia ,bring back Abbott,promise to scrap energy destruction .build coal and nuclear power stations , declare Australia Invaded and negate all the indigenius crap, and stop muslim and African invasion ,you would wipe the floor with the gangrene union mafia mob . Also purge the liberals of the turnbullite leftists withdraw preselection .replace them with Real Liberals preferably non Lawrence-trade people you know people who know what work is .some cleansing of the education system to de politicise it and actually Teach kids .

  32. cynical1

    Evil Multinationals should fuck off.

    And then ask Australia what 50% tax on fuck all is.

    Eventually, this merry go round of “Anything except cut spending” must stop.

  33. Neil

    Due to British rule, when Ireland finally became independent it had basically zero industrial infrastructure and operated as an agricultural backwater.

    Sounds like us at the moment. In the late 1970’s we used to make everything here. Now it is mainly gone. First world countries used to make stuff and third world countries supplied raw materials. On that definition we are now a third world country.

    Eventually, this merry go round of “Anything except cut spending” must stop.

    A 5% spending cut across all Federal govt spending would see the budget close to surplus. But even minor spending cuts in 2014 were howled down so spending cuts are out meaning the budget will never get back to surplus.

  34. John Bayley

    Perhaps but politics means he has to look like he is doing something to keep the lefties quiet.

    Well it’s a pity he – and the Turnbull government in general – have not noticed that such an approach does not work. Nothing will keep the lefties quiet, except for a Labor/Green government.

    The only way to fight them is to go on the offensive, ridicule the moochers at all and any opportunity, and just keep spelling out how wealth is actually to be created.

    I doubt he actually believes it.

    I would not be so sure. He has not earned the nickname ‘Morriswan’ without putting in an effort on par with the ‘Treasurer Who Saved Us from GFC’!

  35. jock

    You guys are a scream. There are no votes in protecting multi nats. Nobody is going to jump up and down on their behalf. Even conservative voters dont trust apple or google or facebook etc not to be cooking their tax situation. Mind you i dont think there is much on this but the voters want action to ensure they are properly shakem down . This is particularly those voters who have been recently shaken down themselves.

  36. Mother Lode

    The only reason that the US was able to be Sam free from the dead eights trying to pull her under was that the had an entrepreneur who also had a seemingly insatiable appetite for stoushes, and who was confident (and rightly so, as it turns out) that he could get around the MSM with Twitter.

    That was the American solution to the particular question besetting America. He had the benefit of a conservative movement still galvanised from Tea Party days, a few sympathetic mainstream outlets like Fox, and a public that already believed in what America should be.

    Different problem in Australia.

    We don’t have entrepreneurs now as much as managers, who will facilitate as best they can their businesses’ decline into annihilation.

    What Australia does have is a ‘big brother’ in the US for the next 7 years.

    Corey is a nice bloke, and can write a newsletter missive with more punch than the whole of the Libs with a bowl of orange juice and cheap spirits.

  37. Mother Lode

    The only reason that the US was able to be Sam free from the dead eights trying to pull her under

    Autocorrect is a fucking mystery.

    The only reason the US was able to break free from the dead weights

  38. Mother Lode

    But he (Corey) and his essays by themselves aren’t cutting through. People can go through their lives with never hearing about them.

    He (or whoever) has to become impossible to ignore. Not for the press, but for the politicians.

    The Democrats HAD to respond to Trump, and the MSM was desperate to give them cover, so they were dragged in too.

    His fans loved tuning in just to see the latest blow land. Then he became a viral phenomenon and was unstoppable.

    And on a shoestring budget that just added to the fun.

    How to do something analogous in Australia

  39. John Bayley

    …but the voters want action to ensure they are properly shakem down

    Not this voter. Theft is theft, no matter who is being stolen from.

  40. Rayvic

    Indeed, the Government does not seem to know what it is doing.

    By heavily subsidising uneconomic, unreliable renewables, it is effectively taxing low-cost, reliable coal-fired power production out of existence. So much so, that our electricity prices are now amongst the developed world’s highest, and electricity supply reliability has deteriorated to such an extent that disinvestment has set in, discouraging would-be investors and reducing job opportunities and standards of living.

    It appears that our Prime Minister is dumbly trying to match Labor and the Greens in phasing out coal-fired power, instead of advancing Australia — and the Libs’ re-election prospects — by adopting new-technology, higher efficiency, low-cost, reliable coal-fired power stations.

  41. manalive

    Apropos Ireland, according to Trading Economics Ireland’s GDP per Cap PPP has leapt from US$45,000 in 2013 to US$63,000 in 2016 comparable with Norway US$64,000 in 2016, while Australia’s GDP per Cap PPP was US$44,000 in 2016.

  42. Confused Old Misfit

    But he (Corey) and his essays by themselves aren’t cutting through. People can go through their lives with never hearing about them.

    This is true. The conservative movement (if indeed there is such a thing in Australia) lacks any effective large scale (a la Fox) media allies.

  43. Neil

    You guys are a scream. There are no votes in protecting multi nats. Nobody is going to jump up and down on their behalf.

    Yes but lefties think that if multi-nationals pay their fare share whatever that is, the budget would be in surplus. They are trying to shift the blame from reckless Rudd/Swan spending to tax avoidance to explain why the budget is in deficit.

    The budget is in deficit because the govt is spending too much and we need spending cuts. It shows how great Howard was. He was faced with a similar problem in 1996. Within 12 months he had the budget in surplus. But his policies and spending cuts caused a Parliament House riot by violent lefties.

  44. Howard Hill

    How to do something analogous in Australia

    Hanson got through the filters but is as dumb as dog shit.
    All you need is someone with street smarts to start making a commotion and then have the brains to follow through. It’s not hard.

    Australians have been so pussy whipped, none of them have any balls!

  45. craig

    Everytime I hear this ‘fair share’ crap, I just want to punch that person in the mouth. The ignorance many people about this topic is astounding and clearly have no idea about government legislation.

  46. Rohan

    Neil
    #2654464, posted on March 7, 2018 at 1:14 pm
    ScoMo is just another socialist shill trying to outdo the ALP and Greens to save his cushy job.

    Perhaps but politics means he has to look like he is doing something to keep the lefties quiet. I doubt he actually believes it.

    Then he’s a political whore abandoning his principles to save his cushy job; the worst type of cretinous socialist shill.

  47. Linden

    Unless you earn or your business earns a taxable income, then none is paid, simple as that.

  48. Linden

    I always thought it is a queer notion, I’ve never yet met anybody who reckons they paid their fair share lol

  49. Iampeter

    It’s hard to tell nowadays. Would it be the Labor Party or the Liberal Party?

    Really nowadays?

    I think it was hard to tell at least when the Howard government decide to inexplicably start building the environmentalist bureaucracy back in the 90’s. Heck “liberals” have been further left than the labor movement in this country my entire lifetime.

  50. feelthebern

    It’s the internal company loans at way above market rates which are the killer.
    Example, a couple of years ago, Glencore issued bonds at something like 3.5%.
    At the same time an off shore Glencore entity charged the Glencore Australia operations something like 9.5% on a loan that was retrospective in nature.
    That is, they worked out how profitable Australia would be & then issued a bull shit loan that wiped out the profit.
    If internal company loans were pegged to a reference rate re deductibility – LIKE IT IS FOR INDIVIDUAL TAXPAYERS – multi nationals would stop getting away with this bull shit practice.

  51. André M.

    Shorten gets boost from ABC, where the centre-left is not rabid enough to count as socialism apparently.
    http://www.abc.net.au/news/2018-03-07/why-bill-shorten-is-not-a-socialist/9522336

  52. Tim Neilson

    If internal company loans were pegged to a reference rate re deductibility – LIKE IT IS FOR INDIVIDUAL TAXPAYERS – multi nationals would stop getting away with this bull shit practice.

    So far as multinationals are concerned, there are the transfer pricing rules that do just that. The comparatively recent Chevron case showed that they work.

    Don’t fall for the media spin. Big corporates may try it on but they are under constant ATO audit, and don’t get away with nearly as much as many smaller taxpayers who are lucky enough to fly under the ATO’s radar.

    As for individuals, I’m not aware of any actual express cap on interest deductibility pegged to a fixed rate.

  53. Combine Dave

    Potential greatness!

  54. W Hogg

    They propose tax cuts to go with tax increases. Yet every tax increase is legislated and every tax cut is blocked.

    Feature, not a bug. Mal knows the Sen8 will never legislate that cut. When he reluctantly drops it, he will be left with a surplus.

  55. feelthebern

    As for individuals, I’m not aware of any actual express cap on interest deductibility pegged to a fixed rate.

    You must have not have, or don’t know anyone who has, ever pre-paid interest on any investment.

  56. cynical1

    Australians have been so pussy whipped, none of them have any balls!

    When you rely on Government for your benef, ahem, income you need as big as possible tax take.

    Just not from you.

    So why the rock the boat when car rebirthing, ice production, having three single wives in Lakemba or labouring cash in hand are all tax free.

  57. classical_hero

    WTF is a “fair share”?

    Are those people who pay nothing paying a “fair share”?

    No politician should ever use the word ‘fair’, because it’s such a subjective word.

  58. Tel

    So why the rock the boat when car rebirthing, ice production, having three single wives in Lakemba or labouring cash in hand are all tax free.

    Only a matter of time before the statisticians add that lot to GDP, fluff the numbers a bit.

  59. JohnA

    You really have to wonder about this government and whether it needs to be medicated for bipolarity.

    No, I am thinking euthanasia, since murder is still a crime.

  60. Dr Fred Lenin

    Most pollies don’t really favour tax cuts,(except for their own salaries) .Tax cuts deprive them of other peoples money to give away , making big shots of themselves ,with their comrades in the public service they regard the money they purloin as their own ,to do with as they please ,we need continual referenda on spending one item would be to psy the elitists by production and results ,the ensuing poverty would be pitiful.

  61. Tim Neilson

    feelthebern
    #2655034, posted on March 8, 2018 at 6:41 am

    OK, I see what you’re saying.
    But:
    (a) that’s not a cap on total deductions, just a timing rule;
    (b) the prepayment rules apply to multinationals just the same way as they apply to any other taxpayer.

  62. Blair

    Company tax in Australia is designed to get overseas investors pay their fair share of Australian government spending on social welfare, health and education.

  63. W Hogg

    WTF is a “fair share”?

    Are those people who pay nothing paying a “fair share”?

    I’ve asked tax addicts who allege that “da Rich” like myself don’t pay their fair share, what might in their view constitute an adequate contribution to the country’s leaners as well as our many offshore obligations. They don’t like that, and try to generalise with “more.” When pinned down to a specific claim against my income and/or assets that they would be satisfied with and leave me alone (so that I can decide whether to accept their terms or renounce my citizenship and leave for a country that would be less greedy) they run away from the question. That suggests that they are actually a little embarrassed about how much they are already taking, and would find it difficult to explicitly mount a case that “fair” = “more.”

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