LEIGH SALES:
The Australian Tax Office is investigating 800 Australians implicated in a massive leak of investment and financial documents from a business in Panama. The papers also reveal the secret financial dealings of many of the world's most rich and powerful, including 72 former or current heads of state. It is an unprecedented insight into how assets are hidden and how taxes are minimised or in some cases, evaded. With me now live from Melbourne is Australia's Assistant Treasurer, Kelly O'Dwyer. Thank you for joining us.
MINISTER O’DWYER:
Good evening.
SALES:
What do you make of this leak?
MINISTER O’DWYER:
Let me say at the outset, Leigh, the Australian Government will never tolerate tax avoidance in Australia. There is nothing that makes Australians angrier than having to pay more tax as a result of an individual or a company not paying the tax that they're supposed to pay. The Australian Government is absolutely focused on making sure that the integrity of our tax base is strengthened and we have instituted a number of measures to do that. And the information that has come from the release of this information is being acted upon as we speak by the Australian Taxation Office.
SALES:
But if Australian residents are using offshore entities to minimise their tax, is there anything illegal about that, or are you simply making a moral argument?
MINISTER O’DWYER:
Well, no, if people are deliberately structuring their affairs to avoid paying tax in Australia, that is clearly against the law. The Government has announced a number of measures to strengthen our laws, to close tax loopholes that existed during the six years of inaction by the previous Labor Government, particularly last year we strengthened multinational anti-avoidance laws through the legislation we brought into the Parliament, that gives the Australian Taxation Office more powers, it doubles the penalties for those companies that are ripping off the Australian taxpayer and it introduces for the first time country by country reporting. So the Australian Taxation Office has a much better picture of what's going on in countries right around the world. This makes Australia one of the toughest places for anti-avoidance legislation for multinationals and it comes despite the fact that the Labor Party voted against the legislation.
SALES:
If I can steal a line from Kerry Packer circa 1991, is it not reasonable that any Australian what doesn't legally minimise their tax should have their head read because as a government you don’t spend it well enough that we should be donating extra.
MINISTER O’DWYER:
I certainly believe governments of all persuasions, whether federal or state, need to be absolutely accountable for the taxpayer dollars they spend. You would have seen recently we had quite an argument at COAG about responsibility and taxpayer dollars. The point I would make here, Leigh, is that tax avoidance, structuring your affairs to avoid being tax, is in fact against the law. That's why it's so important that the Australian Taxation Office be properly resourced, have the right tool-kit in order to be able to go after those companies and those individuals who are doing the wrong thing by those other people who are law-abiding. That's why we have increased the number of people in the Australian Taxation Office in the international team so that they have the ability to do just that.
SALES:
How could Australia, though, take action just in isolation? Because surely from the scale from what we've seen here, it is a global problem and there are very attractive places to park your assets and minimise your tax.
MINISTER O’DWYER:
You're absolutely right that there needs to be international cooperation. We have more than 100 international tax-sharing agreements with other jurisdictions. In fact, Australia led the global efforts on these matters when we were President of the G20 and we've been working with the OECD to make sure that we put in place the right rules, right around the world, so that we can stop those people who are doing the wrong thing. But let me also say this – we need to take action here at home as well. The Australian Government has put in place a multi-agency taskforce, the Serious Financial Crime taskforce, that we have resourced to go after those people who are committing these serious financial crimes. We have already seen them raise liabilities of over $110 million to date, in a short space of time, which we expect to be much, much higher based on the fact that Project Wickenby, which this is a successor to raised over $2 billion worth of liabilities during its time.
SALES:
If we can turn to some domestic economic issues, the Coalition's message at the moment is about Australia needing to live within its means. How do you think most Australians are going to react to the news that future health and education spending they were promised isn't going to happen?
MINISTER O’DWYER:
The promise was made by the previous Prime Minister Julia Gillard in relation to spending were spending promises without funding. That's part of the issue, that's part of the problem that we're actually facing today...
SALES:
And Tony Abbott promised in the last election campaign he would have no cuts to funding for health or education funding either?
MINISTER O’DWYER:
We have in fact increased funding to education and also to health. And the recent agreement with the state premiers and the Prime Minister has announced an additional $2.9 billion in additional spending on hospitals but, with the important proviso that we want to see taxpayer dollars be spent properly and be spent well, which is why we have only agreed to provide this additional funding on the basis that the States agree to a national efficient price, which means that they get better value for the tax dollars that are spent on hospitals. And it's also why the Government has announced a program, the Health Minister and the Prime Minister, to ensure that we can keep Australians healthier and out of hospital by managing chronic illness much better.
SALES:
We just heard in the first story on this program tonight that Australian households are carrying unprecedented levels of debt. Is that something that bothers the Turnbull Government? And are you prepared to lecture Australians about the need for personal responsibility?
MINISTER O’DWYER:
I think we have been very clear with our values. We, of course, believe in accountability and in people taking responsibility for their actions. But also providing them with information by which they can make positive choices. But at the end of the day, people are responsible for their own decisions. That's a fundamental tenet. But let me say this around your previous report. We conducted a review into the financial system led by David Murray, who provided advice on how we can ensure that we can have a strong and stable financial system going forward. He made a number of recommendations last year, of which we accepted the vast majority of them. In particular, the regulator making some changes to bring us into line with international standards, the Basal standards, regarding regulation for standards regarding lending.
SALES:
We're unfortunately out of time, thank you for joining us this evening.
MINISTER O’DWYER:
Great to be with you Leigh.