1.1
Labor Senators welcome the intention of the legislation and note the
support of the Australian Labor Party.
1.2
Labor Senators draw attention to the Government’s inconsistency in
relation to the issue of multinational tax avoidance. After voting against the
previous Labor government’s measures, the Coalition government proceeded to
water down tax transparency measures and refused to implement outstanding
measures aimed at closing tax loopholes that had been announced by the previous
Government.
1.3
Subsequent efforts by the Abbott-Turnbull governments to address
multinational tax avoidance have been patchy and belated, lagging behind the
expectations of the Australian community that multinational companies pay their
fair share of tax, and behind measures announced by the Labor Opposition. The
Diverted Profits Tax only raises one-eighth of the revenue that proposals taken
to the 2016 election by Labor to close debt deduction loopholes would have
collected. The Coalition still refuses to legislate such debt deduction
changes, preferring to focus on handing a $50 billion company tax cut to the
very companies it claims to be targeting with this legislation.
1.4
Labor Senators note that this legislation was rushed in an effort to
meet the Treasurer’s self-imposed deadline of introducing the legislation to
Parliament before the end of the 2016 parliamentary sitting year. The Treasurer
missed this deadline. Labor Senators note that additional consultation on the
draft legislation was conducted, with submissions and representations not
publicly disclosed.
1.5
The Government has now imposed a very tight implementation deadline on
affected parties, including government agencies such as the Australian Taxation
Office.
1.6
As such, Labor Senators note submissions recommending the Australian
Taxation Office or the Senate Economics References Committee review the
legislation in a reasonable timeframe (e.g. within three years) to ensure the
Diverted Profits Tax is operating as intended and address any unintended
consequences of the legislation, and urges the Government to support such a
review.
Senator
Chris Ketter Senator Jenny McAllister
Deputy Chair Senator
for New South Wales
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