Multinational tax dodging costs the government billions
It is undoubtedly true that profit-shifting reduces government tax revenues but one has to ask if that is good or bad. Leftists don't even think about that. To them, nothing is too much for government. Once the money is in government hands they have an opportunity to influence its spending.
But for anyone who asks the unmentionable, the answer is not so clear. Is it best for funds to be wasted by an incompetent government or is it best for resources to be carefully saved for future investment? And that is not just rhetoric. The Rudd/Gillard government showed how colossal government waste can be. They added half a trillion to Australia's national debt and what did we get for it? More bureaucrats mostly.
So any money that can be kept out of government hands should be. It will be much more usefully employed by those who earned it
I might also mention that the poll commissioned by Oxfam should not be taken seriously. Oxfam are anything but impartial and will be sure to have designed the poll to get the answers they want
Nearly $AU9 billion that could be spent on schools, hospitals and critical infrastructure in Australia and in poor countries is instead being hidden by Australian-based multinationals in tax havens, according to an Oxfam report released today.
According to The Hidden Billions – How tax havens impact lives at home and abroad, and based on the latest available data, tax haven use by Australian-based multinationals cost Australia around USD $5 billion (AUD $6 billion) in lost tax revenue annually, and cost developing countries an estimated USD $2.3 billion (AUD $2.8 billion) every year.
The report is being launched with an online poll that shows 90 per cent of Australians polled think the Government should do more to stop multinational corporations avoiding paying tax in Australia and in every country in which they operate.
Oxfam Australia Chief Executive Dr Helen Szoke said the report showed how much the public lose out when big companies do the wrong thing and governments don’t step in and stop them.
“The Oxfam report, for the first time, puts dollar figures on what Australians and poor people in our region are missing out on because Australian-based multinational companies aren’t paying their fair share of tax like the rest of us,” Dr Szoke said.
The Oxfam-commissioned poll also found:
* 60 per cent of Australians polled believe the main thing the Federal Government should do to raise revenue is crackdown on tax avoidance by multinationals;
* 90 per cent of Australians polled believe the Federal Government should legislate to prevent all multinationals operating in this country from moving their profits to tax havens to avoid paying tax here;
* 87 per cent think that those Australian companies who operate in developing countries and in Australia should publicly report their earnings and how much tax they pay everywhere.
Globally, tax-dodging is rampant in developing countries, with big companies ripping USD $172 billion (AUD $209 billion) of tax revenue out of their economies in 2014, money that could have been used to fight poverty and generate equality and prosperity.
Dr Szoke also said The Hidden Billions report found that use of tax havens overseas by big businesses based in Australia would cost developing countries USD $4.1 billion (AUD $5.6 billion) in desperately needed revenue for essential public services over the next five years, including many of Australia’s poorest neighbours.
“Over the next five years, it’s estimated that Indonesia will be deprived of around USD $360 million (AUD $493 million) that could have gone towards education, and PNG stands to lose around USD $17 million (AUD $23 million) in expenditure on essential services such as hospitals, schools and sanitation,” Dr Szoke said.
“This is shocking, given in PNG, 60 per cent of the population don’t have access to clean water.
“In Ghana, funding lost due to the use of tax havens by Australian-based multinationals could pay for an estimated additional 1,400 primary school teachers, and nearly 600 nurses, a year. In The Philippines, an estimated 1,700 new classrooms per year could be built.
“It doesn’t have to be this way. Australia should show that it’s tackling this issue by making the tax affairs of Australian-based multinationals public – not only for their operations in Australia, but for every country in which they operate.
“Our research relies on IMF data, which shows the flow of money from Australian-based multinationals. Unfortunately, there is no way to find out which individual companies are dodging tax, as they’re not required to publish their tax affairs on a country-by-country basis.”
Dr Szoke said this lack of public reporting enabled big companies to hide billions of dollars they should be paying in tax.
“Other countries, including the US, France and Canada, have made tax reporting public for high-risk sectors in big business, such as for mining companies and big banks; it’s time Australia caught up,” she said.
Dr Szoke said the report showed that Australia was a major part of this global problem that affected so many lives here and overseas.
“With inequality worsening around the world, making the fight against poverty even harder, companies must pay their fair share of taxes, so that the revenue can be used to improve people’s lives, both here and for the world’s poorest people,” Dr Szoke said.