MARIUS BENSON:
Treasurer, does Google have anything to worry about in terms of its tax arrangements?
TREASURER:
Well, I can’t comment on specific companies but what I can say is that we have taken a very firm, very strong approach towards companies that earn profits in Australia but don’t pay tax in Australia. The Australian Taxation Office has had additional resources allocated – more than 60 new staff, particularly in the area of multinational taxing and they are working with investigators to ensure that multinational companies pay tax if they earn profits in Australia.
MARIUS BENSON:
So, it is a fact that they don’t do it at the moment?
TREASURER:
Well, there is some concern about some multinationals not paying their fair share of tax in Australia. Everyone should pay their fair share of tax, whether you are a small business person, whether you’re an employee or whether you are a multinational. I am absolutely determined to ensure that everything is done to make sure that people or companies who earn money in Australia pay tax in Australia.
MARIUS BENSON:
Do you have any idea of how much you are missing out on at the moment?
TREASURER:
The estimate is somewhere between $1 billion and $3 billion a year but of course, that is one of reasons why we are undertaking these investigations. The Australian Taxation Office has provided additional resources to this task and at the same time, I have used our chairmanship at the G20 to prosecute a case for all countries to move together. We have recently seen action by the United Kingdom Government with a new approach to multinationals in the United Kingdom. We are exchanging information with them and we are looking to make further statements over the course of the next few months.
MARIUS BENSON:
So, do you have international co-operation in train because obviously if you are dealing with multinationals, that’s what you want?
TREASURER:
There are new and stronger links between the Australian Taxation Office and international collaborators such as other taxation offices. There is no doubt in my mind that Australians will not cop multinational companies earning profits in Australia and not paying tax in Australia, and the same principle applies in other countries as well.
MARIUS BENSON:
But doesn’t history just say that these companies are too smart? That they will just get their accountants to keep them one step ahead of you?
TREASURER:
Multinationals will no longer have the option of trying to use clever accounting to reduce their tax liabilities in Australia if it means that they are not paying tax somewhere else as well. Those days are coming to an end. The use of jurisdictions like Ireland and Bermuda to hide profits is coming to an end for multinationals. Australia has led the charge in that regard in the G20 and through the OECD, but we are also going to take very strong action domestically here in Australia.
MARIUS BENSON:
As we speak, the world is gathering – or representatives of countries are gathering in Lima in Peru to discuss climate change. Julie Bishop is representing Australia there with Andrew Robb, the Trade Minister. Reports in the Sydney Morning Herald amongst other papers this morning, that Julie Bishop is only there because an additional decision by the Prime Minister’s Office for her not to go was reversed when she took that refusal to Cabinet, and Cabinet overruled it.
TREASURER:
That story is not my recollection.
MARIUS BENSON:
What is your recollection?
TREASURER:
It’s certainly not that story. I don’t talk about what happens in Cabinet but I can say to you, from my recollection, that story is quite wrong.
MARIUS BENSON:
Entirely wrong?
TREASURER:
Quite wrong.
MARIUS BENSON:
Could you expand on that?
TREASURER:
No. I think there are bigger issues to talk about for Australia than speculating on what happens in Cabinet and who says what to whom. The bigger issues are how do we have a stronger economy, how do we get on with the job of building greater prosperity. They are the bigger issues, Marius.
MARIUS BENSON:
Can I ask you just a quick general question about the selling of the Budget, which has obviously been your major preoccupation this year? Is it a difficulty that the Budget is simply seen generally as unfair? John Hewson, for example, says, ‘When you look at this Budget – it hits low and middle income earners 10 to 15 per cent on their incomes. Whereas, the highest incomes only get a temporary bee sting.’
TREASURER:
That is just not right. I would say to you: the most unfair thing you could possibly do is leave every Australian with a debt of $25,000 to the government in ten years’ time. If we don’t take action now that is exactly what would have happened if Labor were re-elected and nothing was done about the Budget. The debt would keep rising and rising to the point where every child born in a decade’s time would be born with a $25,000 debt to the government. Now, that is intergenerational theft as far as I am concerned. We need to live within our means. Overwhelming, the government has to reduce spending because we do have revenue challenges, especially given that the iron ore price has fallen so dramatically. So, the only way to reduce expenditure is to ask people to make a contribution along the way now and if we don’t take these actions now, it is going to become much harder and much more expensive in the future.
MARIUS BENSON:
Only a couple of shopping weeks until Christmas; do you think people are spending?
TREASURER:
I am getting good feedback from retailers. I am certainly getting very good feedback in a number of data series. I know it has been a difficult year for some Australians, but I am confident it will be a good Christmas.
MARIUS BENSON:
Joe Hockey, thank you very much.
TREASURER:
Thanks very much, Marius.