Australian tax justice movement fights Trump-style corporate tax cuts







The Australian government, led by its Prime Minister Malcolm Turnbull, is pushing to implement Trump-inspired corporate tax cuts. While Australia’s peak business group, BCA, seized on the Prime Minister’s meeting with Donald Trump in Washington DC to launch their pro-tax cut campaign, several #TaxJustice actions, campaigns and initiatives are flourishing and gathering momentum.

In the two states of New South Wales and Queensland, the Australian Council of Trade Unions (ACTU) is supporting a campaign criticising global oil giant Exxon Mobil’s record on paying tax, titled “Make Exxon Pay Tax, Malcolm!”. This takes place as Unions maintain picket line for 200 days outside Exxon-Mobil’s Longford gas plant in Victoria, because of changes to maintenance contracts for hundreds of workers in the oil and gas industry. Robo calls, radio ads and billboards saying “You paid tax but Exxon didn’t” are also being installed to reach voters in critical targeted electorates. “We are targeting areas of Australia where we know people are concerned about corporations having too much power and not paying their share of tax,” ACTU secretary Sally McManus said.

The ACTU has calculated that tax revenue it claims Exxon funnels offshore through a network of companies in the Netherlands and the Bahamas could treat 76,000 people in public hospitals, educate 5,500 public high school students and support 1,685 disabled Australians through the NDIS – labelling Exxon as a “very bad corporate citizen”.

“Over three years from 2014, the average working person paid thousands in tax on their wages, food, fuel and energy bills, Sally McManus added. It’s wrong that ExxonMobil paid nothing despite earning $24.8 billion in the same time. “Workers contribute to building the schools, hospitals and roads our community needs. We expect corporations to play by the same rules and pay their fair share.”

See this wrapup video by Australian Unions:

As the debate is raging in the country, an independent media outlet led by former journalist and stockbroker Michael West is counting down the country’s “Top 40 Tax Dodgers”. “There are now three years of tax transparency data published by the Tax Office, the webpage explains, and we have used this data to work out which of Australia’s largest companies have paid the least tax, or no tax, on the highest incomes”. The ranking, which has so far only revealed the 15 last companies, can be followed online. So far, Oil and gas companies lead the way in tax dodging! Michael West has also drawn critical attention to the role of the Big 4 global accounting firms in their conflicting roles in facilitating multinational tax avoidance, while auditing companies and advising governments on tax policy.

In December, a report from the Tax Justice Network Australia detailed a massive system of offshored profits and other tax avoidance strategies deployed by Exxon, describing how Exxon’s entire Australian operation is owned through the Bahamas, where 575 Exxon companies are registered. The report, titled “Is Exxon paying a fair share of tax in Australia?” can be found here. The civil society network called for a public investigation of ExxonMobil Australia’s tax affairs, saying the company has failed to disclose direct links to shell companies in the Netherlands and Bahamas, and that it uses related party loans to artificially reduce tax payments in Australia.

As a result of the report, the Australian Parliament agreed to extend the ongoing Senate Inquiry into Corporate Tax Avoidance to specifically examine Exxon’s tax affairs. A public hearing happened on March 14th. In a submission for the hearing, Annie Butler -the head of the Australian nurses’ union (ANMF), the country’s largest union and most recent member of the Tax Justice Network Australia- wrote that if “Exxon paid a fair share of corporate income tax more resources would be available to ensure quality health services for all and, most importantly, to solving the staffing crisis in Australia’s aged care facilities.” She also commented that the union was “deeply concerned about the likelihood that the tax bill for many of our members is greater than that of Exxon’s.”

submission by the Tax Justice Network Australia and the Make Exxon Pay Coalition, further exposes Exxon’s tax dodging in Australia, provides detail on hundreds of Exxon tax haven subsidiaries and examines tax issues in the UK, New Zealand and Papua New Guinea as well. The Tax Justice Network Australia, Publish What You Pay Australia and many other organisations have called on the Australian government to implement mandatory disclosure of payments to governments by all resource companies. These transparency measures already exist in the UK, the EU and Canada. Similar measures were to be implemented in the U.S., but President Trump -after appointing the former Exxon CEO as Secretary of State- scrapped these crucial anti-corruption measures.

As Jason Ward introduces in its Senate submission, “Exxon has a global track record of bullying communities and governments and avoiding tax obligations wherever and whenever possible. Exxon’s submissions, statements and actions show complete disrespect for this committee and the Australian people. Exxon’s arrogance and disrespect are not exclusive to Australia”.

A huge rally was organized outside the Senate hearing, in Melbourne.

Meanwhile, Exxon’s hearing at the Senate was live on Facebook:

While The Guardian notes that “public records released by the Australian Taxation Office show Exxon has generated revenue worth $24.5bn over the last three years without paying any corporate tax”, most media outlets are widely diffusing the stunning testimony from Exxon, implying “Exxon has paid no corporate tax since 2013 and don’t expect to pay until 2021”. Consistently, Exxon announces no PRRT (Petroleum Resource Rent Tax –  the only applicable royalty payment) on its 25% interest in the massive Chevron operated Gorgon project (world’s largest LNG project off the coast of Western Australia) until mid-2030s…

The Sydney Morning Herald for instance, insists on the “staggering” fact that “Australia is losing $90 billion in resources tax”: “Australia is on track to eclipse Qatar as the largest exporter of gas by 2020, but is expected to only earn $600 million in 2018 – the same amount of revenue the government earns in beer tax every year – compared to Qatar’s $26.6 billion”.

Indeed, the Australian media also scrutinizes tax issues, widely reporting how the Australian tax office recently said “36% of big firms and multinationals paid no tax in 2017” and “figures for 2015-16 show same proportion of companies pay no corporate income tax as in previous years”, as The Guardian relays in a documented database.

In February, Australian Broadcasting Corporation (ABC) Chief Economics Correspondent Emma Alberici wrote an analysis of the Coalition’s proposed corporate tax cuts, arguing that there was “no case for a corporate tax cut when one in five companies did not pay tax”. It appears the article was taken down by ABC, after Turnbull formulated complaints: “Guardian Australia understands ABC News management has been in crisis meetings for two days after the prime minister attacked the articles in question time and then wrote formal letters of complaint to management”. You can read the article posted after the first one was erased here. This week, ABC published an interesting chart showing “Every big business that would benefit from the company tax cut”.

Jason Ward, a spokesperson for the Tax Justice Network Australia and author of the Exxon tax reports, commented that “it is a pretty desperate measure for the government to pressure the public broadcaster to remove a well-documented analysis which argues that there is no factual basis for a corporate tax cut. I believe this signals that the government knows they are losing the public debate. The censorship has only caused more people to read the analysis and understand that a corporate tax cut is purely a giveaway to big business and that following Trump’s race to the bottom is not a viable economic strategy.” 

Feel free to contact Jason Ward for more info on the Exxon report, and Mark Zirnask about the Tax Justice Network Australia.

You can follow the debate through Tax Justice Australia’s website, Make EXXON pay’s Facebook page and the hashtags #ChangeTheRules #MakeExxonPay

You can follow the debate through Tax Justice Australia’s website, Make EXXON pay’s Facebook page and the hashtags #ChangeTheRules #MakeExxonPay

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