The Treasurer Scott Morrison speaking at The Tax Insitute breakfast. Photo: Nick MoirFederal Budget 2016: full coverage
The Treasurer, Scott Morrison, has used a post-budget sales tour to send a blunt warning to big companies that dodge tax by shifting profits offshore.
“My clear message to multinationals: pay your tax,” he said in a speech to the Tax Institute in Sydney on Thursday.
Mr Morrison claimed budget measures targeting multinationals showed Australia was at the forefront of an international push to crack down on complicated tax avoidance schemes.
The changes were needed to protect the integrity of the tax system because when voters see big firms avoiding tax they know it means a bigger tax burden falls on individuals, Mr Morrison said.
“Multinationals know the game is up on this and it has been countries like Australia in particular…that have put that issue on the agenda.”
Tuesday’s budget unveiled a new “diverted profits tax” similar to a scheme introduced by Britain’s Conservative Government which taxes multinationals on income they have sought to shift offshore at a penalty rate of 40 per cent. A new Tax Office taskforce with more than 1000 specialist staff to police and prosecute companies was announced along with other changes to close tax loopholes.
Mr Morrison claimed these changes, which will raise nearly $4 billion over the next four years, were “measured” and well-targeted.
Both the Coalition and Labor have forcefully targeted the tax minimisation strategies of large corporations but Mr Morrison denied this would discourage multinational firms from investing and doing business in Australia.
“I don’t think it will have that effect because there is a global movement at the moment that is cracking down on this,” he said.
Mr Morrison said Australia was “leading the way” in global efforts to crackdown on multinational tax avoidance and commended his predecessor, Joe Hockey, for promoting international cooperation on this challenge during Australia’s tenure as G20 chair in 2014.
“You have got to pull every lever that you possibly can,” he said. “The international community of businesses are waking up to this…there has been pretty tight club of countries, led by ourselves and the UK, who have really been trying to drive this issue of multinational tax avoidance.”
Mr Morrison told the Tax Institute that a major overhaul of superannuation taxation in the budget, which mostly affected wealthy individuals, was required to make the system more sustainable.
“Superannuation tax concessions shouldn’t be a free for all, they should be…targeted to those who most need them,” he said.
Mr Morrison said the changes had “generated some $6 billion in additional revenue” that will be used to fund lower taxes for “hard working families” and small to medium-sized businesses.
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