TREASURER:
I can confirm reports that the Australian Taxation Office is embedded in the offices of 10 multinationals operating in Australia. The ATO has additional resources to identify whether those companies are not paying their fair share of tax in Australia. This is part of a coordinated effort from the Australian Government. We worked through the G20 to lay down a platform for global action – we are doing that domestically. We have also worked with the OECD in a base erosion and profit-shifting program, which I announced with the head of the OECD in Cairns. We are also an early adopter of the common reporting standard, which ensures that those people who open up bank accounts right around the world are going to have to disclose that information to the Australian Taxation Office.
I want to emphasise to the Australian people that we are going to work as hard as we can to make sure that companies that earn profits in Australia pay tax in Australia but it needs to be a coordinated global effort and that is certainly what we are undertaking at the moment. We are closely monitoring new developments in the United Kingdom. We see it as essential that all corporations – all corporations, contribute to the country in which they operate.
REPORTER:
Mr Hockey, when are you going to announce details of like the Google tax [inaudible] – the version of – the Australian version?
TREASURER:
We are still working with the United Kingdom and better understanding the sorts of initiatives they're undertaking. I obviously wrote to the European Commission just a few weeks ago in support of initiatives out of Germany and a number of other countries to tighten up rules in relation to the treatment of multinationals. It robs Australians when multinationals don't pay tax here and we are going to do everything we can but it must be coordinated. It is not good enough to bleat about it as the previous Government did. You actually have to have coordinated action because, ultimately you can take unilateral action here, but if other jurisdictions allow multinationals to get away with it, then whatever you do domestically isn’t going to work.
REPORTER:
We've been named the worst performing country on climate change – industrialised country, and they have blamed the fossil fuel lobby for your decision to get rid of the Carbon Tax. What do you make of that claim?
TREASURER:
I don't accept it.
REPORTER:
Can you clarify whether your tax changes to Google tax requires legislation or whether it will be real changes by the ATO?
TREASURER:
The ATO is using extensive existing powers. So, we are certainly contemplating additional legislative action and I've been in discussion with, obviously, the Treasury and the Australian Taxation Office about that.
REPORTER:
Mr Hockey, it's true, isn't it, that any action Australia takes would be meaningless if there is not the coordinated global action you want? And the other thing is, to send a signal to companies like Google, should the Government stop paying to run ads on Google like you are doing with higher education?
TREASURER:
I want to emphasise that I will not name any individual company, nor will the Australian Taxation Office. There are very strict laws and you should not presume guilt against any individual or any company. That would be unwise. In relation to the first matter, which was global action, look, we haven't wasted our leadership at the G20 this year. This is something that I've been consistently working with other Finance Ministers on during the course of the year and you would note that from all of our statements following those meetings. So, there is coordinated global action, particularly out of Europe. There has been a change in attitude in the United States, which we welcome and which we all worked on during the course of the year. So, it's hugely important that everyone takes action and that is exactly what we are undertaking again.
REPORTER:
Are the big Australian companies paying a fair share of tax or is this [inaudible] multinationals because there has been a report that you know, as much as a third of them only pay 10 cents a dollar in tax.
TREASURER:
Yeah and that was disputed by the Taxation Commissioner. I don't see individual tax returns and nor should I but the Taxation Commissioner said that that report was wrong.
REPORTER:
Do you think it's a risk that [inaudible] Australian companies that are operating overseas and other jurisdictions could face a backlash from other agencies or countries that are not as proactive on BEPS?
TREASURER:
This is one of the challenges. There are a large number of Australian companies that do operate overseas and again I emphasise that is why we need to work collectively, globally, to address this. Now, if Australian companies aren’t paying their fair share of tax overseas, it is equally unfair for those jurisdictions. So, we are trying to have a fair global taxation system because ultimately if a multinational doesn't pay its fair share of tax it means the tax burden falls more heavily on families, on small businesses and that is unacceptable – unacceptable to the Government. Everyone has to pay their fair share of tax and we will do whatever we can to make sure they do.
REPORTER:
You said that you were contemplating legislation; can you talk at all about the circumstances in which you would legislate? Would it only be when other jurisdictions are acting as well?
TREASURER:
We fully expect there to be a greater coordinated effort next year in terms of tax law changes around the world. Domestically, I believe there will be – probably – a number of court cases during the course of next year, where existing laws will be tested. In the interim, we are contemplating further measures that will give the Australian Taxation Office the power to get the sort of information they need. It is very complicated. Minimising tax is an industry, particularly when it involves billions of dollars. We are applying all the resources we can to ensure that we catch those businesses that are not paying their fair share of tax.
REPORTER:
As I understand it, some companies have already paid some revenue – lost revenue, back to the government under their own volition. So, is kind of the strategy here, really to shame these companies without naming them but you know, is this a warning shot? So, they can act before you do need to legislate?
TREASURER:
There is a global warning message to multinationals. You have to pay tax where you earn the profits. Wherever you are located, the developed world has had enough. The developed world has had enough. We are not going to cop this sort of minimization, and in certain circumstances, avoidance and even evasion. We are not going to cop that anymore.
REPORTER:
Mr Hockey, do you have a target set in mind for how much tax revenue [inaudible]
TREASURER:
No, and I am deliberately not going to count it as banked money until it's actually banked. That was the mistake the previous Government made.
REPORTER:
Mr Hockey, as a Treasurer looking at your Budget bottom line, do you have any idea how much the partial fix announced by Senators Cormann and Johnston this morning for the air warfare destroyer program will cost, because it's unlikely to be cheap?
TREASURER:
Yes.
REPORTER:
[Inaudible]
TREASURER:
We will wait and see.
REPORTER:
George Osborne is calculating $1 billion out of his diverted profits tax over five years…
TREASURER:
£1 billion [inaudible]…
REPORTER:
Pounds – £1 billion. Are you saying we can't implement our own version of that until everyone else has signed up or [inaudible]…
TREASURER:
No, what I am saying is we are gathering a lot of information at this very point in time. The Australian Taxation Office is embedded in these companies and really you shouldn't count your lottery winnings, or you shouldn't count your income until you have actually received it. I think [inaudible] to be very careful about this. We are being very methodical, we are working in a coordinated fashion. We are not going to make the mistake of the previous Government and that is have knee jerk reactions which appear populist but at the end of the day fail to deliver.
REPORTER:
Treasurer, what is the approximate budget for higher education [inaudible]?
TREASURER:
No, that will be up to Mr Pyne.
REPORTER:
Treasurer, how important is it to crack down on internet piracy and what specifically is the Government going to do about that?
TREASURER:
I will leave that to the Minister for Communications.
REPORTER:
Another report today about some divisions between the Foreign Minister and the Prime Minister’s office – well, I am guessing you are not going to confirm or deny that report out of Cabinet; can you give us the mood of Cabinet at the moment, heading into your second year?
TREASURER:
It is good. I would say to you: I read that report this morning and that certainly wasn't my recollection of the Cabinet discussion. Thanks, guys.