MINISTER O’DWYER:
As we think about our tax system, we think about whether it is fit for purpose. The two key areas we concentrate on are the structure and also the integrity of our tax base.
When we think about structure, we look at the issues to do with our tax mix, our tax rates and also our taxation concessions. We focus on what we tax, how much and whether or not it will be having potential impacts on our economy. We think about competitiveness, we think about investment and ultimately we think about the impact on jobs. We will have more to say about the structure of our taxation system in relation to the Budget on the third of May.
The Government though is constantly addressing and improving the issues around integrity of our tax base. After six years of inaction by the Labor Government previously, the Government has acted very quickly to ensure the integrity of our tax base. We’ve done this because we know that nothing makes Australians angrier than having to pay more tax because someone is avoiding tax or paying less tax than they should – whether it be an individual or a company. It isn’t right and the Australian Government doesn’t tolerate it, which is why the Australian Government has acted.
The Australian Government acted in December of last year to move the Multinational Anti-Avoidance legislation when it comes to big multinational companies. This legislation strengthens the powers of the Australian Taxation Office, it doubles the penalties for multinational companies who are avoiding tax and it means that Australia now has one of the toughest taxation systems in the world for multinational companies. That is not just my words, they are the words of the Australian Taxation Commissioner.
Labor despite all of its talk about the need for these changes put its political interests ahead of Australia’s national interest and didn’t support these changes. Thankfully we were able to secure support in the Senate and these laws are now in place from the first of January this year.
It is a matter of fairness. It is a matter of fairness that we preserve the integrity of our tax base. When we came to Government, the Labor Party had refused to deal with the changes that we had seen in our economy and had failed to ensure that our taxation system kept pace with those changes. Those changes to digital technology, those changes to the importance of intellectual property, and those changes in relation to the integrated global supply chains. We have made sure that our taxation system keeps pace with these changes and we’ve recently introduced legislation that ensures that GST is now paid on digital goods and digital services.
This comes off the back of changes that the government has already made in relation to strengthening thin capitalisation and making sure that we as a country are very clear in understanding what taxes are being paid country by country through our new country-by-country reporting standards. Under the Coalition government the Australian Taxation Office has expanded its international team, it has expanded its team beyond that which existed under the previous Labor government and already we have seen more than $400 million raised in liabilities.
Finally, can I say that the government is also very keen to ensure that those people who are doing the wrong thing are detected and that they are prosecuted. The Australian government has announced and put in place a multi-partner agency in the Serious Financial Crimes Taskforce, the government has committed more than $127 million to this taskforce over the next four years. It builds off the great success of Project Wickenby which raised more than $2 billion in liabilities and we have seen more than $110 million raised thus far. This Serious Financial Crimes Taskforce agency is very much needed by the Australian Taxation Office in conjunction with the Australian Federal Police and also Austrac. It means that those individuals and those companies that are seeking to avoid tax will be detected and they will be prosecuted. We will not tolerate tax evasion in this country which is why the government has acted to make sure that we have the strongest and the toughest taxation laws in the world, in relation to these matters. Are there any questions?
QUESTION:
Just looking at funding for health and education, has the government acknowledged that Tony Abbott did rip $80 billion from health and education?
MINISTER O’DWYER:
Well let me say that at the recent COAG meeting that was held only on Friday of last week the Government was able to announce very significant new funding commitments to hospitals over the next four years of around $2.9 billion. We have done that though in agreement with the States because the States have agreed to reform their system. They have agreed to an efficient pricing mechanism which means that the taxpayer dollars that are going to be spent on hospitals we will see value from the money that is being spent there. We also have announced a better management of chronic diseases through the package that was announced recently by the Health Minister and the Prime Minister and that will ensure that we are keeping people with chronic diseases out of hospital because we are better managing those chronic diseases. This is a very, very significant announcement. It will ensure that taxpayers will get value for money and ensure that they have the best services available to them and that there’s better accountability for those services.
QUESTION:
Are we going to see a company tax rate?
MINISTER O’DWYER:
Well, obviously there is a lot of interest around potential changes to the taxation system, and I can tell you that on the third of May, the Budget will be handed down and you will have answers to all of those questions the night that the Treasurer delivers the Budget.
QUESTION:
Can we do that though, if we live within our means, you know, revenue and spending and that sort of thing. Can we actually afford a company tax rate?
MINISTER O’DWYER:
When the Government thinks about the taxation system, we think about how we can grow investment and how we can grow the economy. You see, if we can grow our economy, we can make sure that we grow jobs. That is what ultimately is in the national interest. So we are looking at the levers the Government can pull in relation to that and the taxation system is one such lever. But as I said to you, the Government will obviously be announcing the Budget on the third of May, and as much as I would love to be able to preview that with you today, that will be a matter for the Treasurer on the third of May.
QUESTION:
Just coming back to Health. You said that there has been an announcement of $2.9 billion over four years. What about more long term funding?
MINISTER O’DWYER:
Well, obviously we determine these funding agreements on a four yearly basis and the Government, in the recent announcement, with the Premiers, has been able to lock in that funding agreement over the next four years. But what is very, very clear, is that the previous Labor Government in making the spending promises that they made, have been shown up for the fantasy figures that they claimed at that time. They claimed at that time that it was fully funded and clearly it was not. It was not fully funded and today the Government is dealing with those issues as a result of the failure of the previous government to fund the spending commitments that they promised.
QUESTION:
Despite the fact that you said you obviously can’t go into details about the Budget, could you give us any idea whether we can expect any kind of “goodies” or whether it’s going to be a bit of a minimalist Budget?
MINISTER O’DWYER:
I will leave all of the announcements to do with the Budget to the Treasurer who will be making all of those announcements on the third of May. Thank you.