28 January 2016
Transcript - #2016007, 2016

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Ross Greenwood, 2GB

SUBJECTS: Coalition bolsters ATO in fight against multinational tax avoidance

ROSS GREENWOOD:

Thanks for joining us.

MINISTER O'DWYER:

Great pleasure to be with you Ross. I think you characterised that very well.

GREENWOOD:

Are you likely to try and cut a deal with Google and its ilk to try and see whether you can fill it up or are you likely to try and just fill up the holes in the bucket? Because it's quite clear right now that there are holes in the bucket.

MINISTER O'DWYER:

Well a couple of things, I think it's important to note; I'm as angry as anyone that companies that operate here, make money here, don't pay the appropriate amount of tax here. The Government has been taking very significant measures to make sure that we close any loopholes that multinational companies are trying to exploit because you're quite right to say that the burden falls on individual taxpayers, other companies and in fact other companies that are doing the right thing. We are absolutely focused on companies that are artificially structuring to avoid Australian tax by booking their revenue offshore and we're looking at those companies that are structuring themselves in such a way as to move themselves into low or no tax jurisdictions.

GREENWOOD:

Kelly I'm such a genius I can work this out in a heartbeat. You know, if let's say Apple, $8 billion in revenues last year – you can't lie about your revenues, that's what you got through the door, that's what you've got to declare as your receipts. You put a 10 per cent tax on the revenue ok, and you simply say that's what you can have, you're a big multinational company, 10 per cent tax on the revenues, just like we've got a 10 per cent tax of GST right now, well you've got an extra 10 per cent tax. And by the way, P.S. don't pay us any income tax because we're going to tax your revenues and not your declared profits. Guess what, you're revenues last year would have increased from $80 million dollars from Apple to $800 million – you'd be $720 million dollars better off and you might suddenly find a few extra dollars around the place for education or for hospitals. Why is that not a reasonable tactic?

MINISTER O'DWYER:

First let me just tell you what we've actually done. From the first of January this year we have, Ross, put in place totally new powers that the ATO now have in order to crack down on multinationals that are trying to avoid paying tax. We've put in place new penalties for those that are avoiding tax – we've doubled it – so anyone caught avoiding their tax is going to have to pay 100 per cent of the tax avoided and we're making it so much easier for the Australian Tax Office to actually see what companies are paying through this country-by-country reporting. In fact only yesterday we were one of 31 countries all up to sign a multinational agreement in Paris to share tax information on these activities of multinational companies, and these are the things we have to do at an international level and the laws that we are putting in place locally are what we need to do at a local level and make sure, as you say, that we close any loopholes.

GREENWOOD:

Alright the only problem is, as you know Kelly, is here is the problem companies such as this right now are not breaking any laws, what they are doing moving the money overseas because they have got what they claim to be legitimate licencing bills and legitimate agreements for marketing and all this type of thing.

MINISTER O'DWYER:

No they are artificially structuring, Ross, they are in fact breaking the law. This is what these new powers have done. These powers by the way were opposed by the Labor party, we actually got them through right at the end of last year - we got the legislation through the Senate thankfully so that we could take action in this regard. And we are - straight away we know that the Australian Taxation Office already has got more than 43 audits underway into these multinational companies where they have got people embedded into these companies. We know already that these companies, as a result of these changes to the law are coming to the Australian Taxation Office to say well actually these are the arrangements that we have got in place at the moment and…

GREENWOOD:

So they are fessing up. One final thing, Kelly, I am Australian company, I compete in the advertising space with Google, I employ Australians, I pay my taxes here, they get away with paying less tax, guess what they have got an advantage – a price advantage over me as an Australian business.

MINISTER O'DWYER:

Which is exactly why you need to make sure you crack down on them and that they pay their fair share of tax. We don't disagree on any of this, Ross that is why we are taking action right now to do just that. That is why we have given increased powers to the ATO, that is why we have introduced new laws, that is why we have taken action so that we can close any loopholes that have previously existed, which is by the way what we inherited from the previous government. Can I also just say though that Ross you talked about the Budget and it is an important point for your listeners to know that this idea that somehow if we could only crackdown on multinational companies, that this would fix the Budget according to even Labor's figures which they won't release the costings of and the assumptions behind we are talking around about $7 Billion over ten years – now that is only a fraction of the interest bill that we pay on the debt that they accumulated each and every year.

GREENWOOD:

There you go. Kelly O'Dwyer the Assistant Treasurer.