Source: Australian Treasurer
MELISSA CLARKE:
But first, a new report shows more than 1,200 companies paid no tax in the past financial year. An annual report from the Australian Taxation Office shows of the nearly 4,000 firms that lodged their returns, around 30 per cent did not pay tax. But the overall amount of corporate tax being paid to the ATO has increased by 17 per cent, which the government says is partly due to a crackdown on tax avoidance, as well as increasing profits by some companies. The Assistant Treasurer and Minister for Financial Services, Stephen Jones, joined me a short time ago. Stephen Jones, thanks for joining us. We see that corporate tax receipts are up 17 per cent under new figures the ATO have released. Is it a case of a tax avoidance crackdown working or is it just that companies are doing particularly well and recording record profits and paying more tax?
STEPHEN JONES:
Look, I think the good thing about this is we’re seeing strong compliance. We put about $200 million into a tax compliance taskforce focusing on large businesses and multinationals, and I’m very pleased to see that it’s reaping rewards. Australians want to ensure that whether you’re a big business or a small business, you’re paying your fair share. So, pleased to see that in the numbers today that we’re getting strong revenue coming through. Of course, it’s what pays for Medicare, it’s what pays for defence, it’s what pays for all the services that Australians expect us to deliver for them.
CLARKE:
How can we quantify, though, how much of that increased corporate tax revenue for the government is coming because of the tax crackdown, to make sure that they’re not profit shifting or avoiding, how much is due to that compared to just some companies in particular – we know a lot of our large mining companies have just had a really good year of sales.
JONES:
Well, frankly, from a bottom line point of view, it doesn’t matter that much. We want to ensure that as we continue to try and balance the budgets. Delivering 2 strong budgets in our first 2 terms of office means that we can do more, and ensuring that we’re getting every dollar that is owed through the taxation system is a key part of that strategy. Australians expect the Albanese government to do that. So, a bit of this, a bit of that, a bit of strong revenue coming through from those traditional sectors like resources and banking and financial services, but also knowing that we’ve got a strong compliance effort going on there as well, to ensure that we’re getting every dollar that is owed to the Australian people.
CLARKE:
There’s still something like 1,200 large companies not paying any tax at all. Is that acceptable? Can the crackdown on tax avoidance reach those companies that are not just, you know, rightly perhaps for some of them, not recording paying tax this time of year due to losses or various, various reasons they might not, but likely some of them are still finding ways to move their profits elsewhere.
JONES:
If it’s avoidance that’s going on, then it’s not acceptable and we’ll track it down. We’re putting a lot of effort into ensuring that we’re cracking down on tax avoidance, particularly in the area of multinational tax avoidance, working through multilateral organisations, through the OECD, but also here at home, ensuring that we’re getting every dollar that is owed. Big priority for the government, huge priority for the government in that multinational area. And of course, as you say, there’ll be some of those businesses who aren’t paying tax because they’re not making any money, they’re breaking even or they’ve made a huge capital investment and any money they have made is being offset against the capital investments that they’ve made. So, some of that is signs of healthy economic activity, particularly if there’s been a big capital investment. We want that. It’s going to drive productivity, but if it’s avoidance, we’re onto it.
CLARKE:
Is it inevitable that there’ll be some level of avoidance so long as Australia has a corporate tax rate of 30 per cent? Is there any value in looking at a lower corporate tax rate in the hope that it might mean there is less accounting shuffling done, and that could actually lead to a better outcome? Or are you convinced the 30 per cent tax rate is the right one to remain at?
JONES:
Look, a couple of things to say about that. It’s 30 per cent, that’s the headline rate. But of course, there are a whole range of offsets and allowances that are made, which means the actual rate, the underlying rate, is significantly less than that for most businesses and have used, as you’ve just pointed out, a whole heap of businesses, one‑third of them in today’s report, that aren’t paying any corporate tax at all. So, that’s the first point I’d make. The second point I’d make is Australians expect our businesses, particularly our resources businesses, our banking businesses and the multinational organisations, to be paying their fair share. And if we want to be able to continue to balance our budgets, we’ve got to ensure that whether you’re an individual taxpayer or a corporate taxpayer, you’re paying your fair share.
CLARKE:
The Australian Financial Complaints Authority has been reporting of the number of complaints that it is dealing with, and it’s dealing with an order of 900 complaints about scams every month. But it is reporting that does seem to be going down slightly. Why do you think that is?
JONES:
Look a sign of success, I’ve got to say. You would be aware, Melissa, that the government’s put a big emphasis on reducing scams and preventing scams. Phase one involved standing up a National Anti‑Scam Centre and pulling down fake investment websites. We’re blocking about a million calls and messages a day, which is a significant uplift in our effort. More legislation coming into parliament in a fortnight to uplift our effort here. So, our strategy is working. There’s no other country in the world that can say they’re having the success that Australia is having, which is why people are now starting to talk about the Australian model for scam prevention. That’s all great, but it doesn’t mean we can rest on our laurels because as soon as we do, the scammers come back, losses go up again and that’s not good enough.
CLARKE:
Is this a sign that this is an area that really does need strong government intervention, that the financial institutions can’t be relied upon to do the right thing, to make sure that customers are as protected as they can be and that a government has to step in here?
JONES:
Yeah, look, 100 per cent. You know, the approach of our predecessors on this was that if you get scammed out of money, you’re a mug and you’re on your own basically. It was a private problem, not a public problem. We think that’s wrong because scams have been industrialised, but they’ve also, if you don’t get on top of it, people won’t answer phone calls that they don’t recognise, they won’t respond to emails because they think it’s a fraud. They won’t respond to SMS messages because they think they’re bogus. Whether you care about it from the social aspect, which I do, or you understand that it’s actually undermining the rails of modern commerce unless we get on top of it, you should have 2 strong motivations for wanting to do it. And that’s the approach of the Albanese government. This is a public problem, not a private problem and we’ve got to get on top of it. So, we’re really leaning, it is a priority for us. We are leaning into it. We want to ensure that we are the hardest country on earth for a criminal to make a buck through scams.
CLARKE:
Well, it’s interesting then to look at some of the other findings of the last financial year from the Financial Complaints Authority, because they also note that complaints about financial institutions dealing with hardship has gone up, and it also is quite critical of a number of insurance companies saying they’re not taking enough of a resolution mindset, that it’s still too adversarial and not doing enough to resolve complaints that people have about those services. Does that then suggest that maybe this is requiring more government intervention with banks and insurers to put more pressure on them to resolve complaints earlier in the process?
JONES:
Can I say, in the area of insurance, when somebody’s lost their property because there’s been a fire or a flood or some other tragedy, the last thing they need is to have to be involved in a brawl and a dragged out fight with their insurance company. Prompt payment, prompt resolution, prompt clarification of rights is what is needed. And it’s exactly why I got Dr Daniel Mulino to chair the recent inquiry into insurance claims handling, particularly arising out of the NSW and Queensland floods recently. He’s done a great job. A series of recommendations to both government and industry. We’re going through them now. An excellent report, and you’ll see us implementing a lot of those recommendations as soon as possible. Like, the insurance industry doesn’t have to wait. The message to them is get better. We want to ensure that you’re looking after your customers, and they’re not adding insult to injury after they’ve had their properties wiped out through a flood.
CLARKE:
And look, before we let you go, I do want to ask you about the issue that has taken up much time in Canberra this week, of politicians accepting flight upgrades or access to the Chairman’s Lounge from Qantas. Given the risk of the perception of a conflict that this creates, do we need our politicians, yourself included, to perhaps rethink whether or not they should be accepting flight upgrades or a Chairman’s Lounge? Is the declaration process not enough to allay public concern that it might be influencing policy decisions?
JONES:
Look, I don’t think it does. Can I first start by saying I don’t think it does influence policy decisions, I’ve read all the stuff, and I’ve watched all the stuff over the last week, and, you know, there’s a lot of strong words that have been said about it. I’m certain that it doesn’t influence policy decisions. You know, should politicians be banned from, you know, upgrades or Qantas lounge? Frankly, I don’t care one way or the other. It’s not a big deal to me. But, yeah, I think Australians are actually focused on, is Medicare working properly? How’s cost of living? Is my job secure? Am I getting a pay rise? Frankly, they’re the issues. I know it’s fascinating in Canberra, and I know there’s a lot of tit‑for‑tat stuff going on here, but I think Australians are really in a different place.
CLARKE:
I know you say that you don’t believe that it creates any influence on policy decisions, but it can create the perception that there could be, and we know that that’s important when it comes to transparency and accountability. So, given the perception issue and given that we have had things like the decision to not grant Qatar extra, you know, slots coming into major airports, which, you know, at the time you said was to help keep Qantas viable and competitive, would there not be some value in reassessing that issue of perception that might remain even if the policy influence isn’t affected?
JONES:
You know, I think we’ve got to continually assess these things to ensure that we are keeping pace with community expectations. I actually don’t think it makes a difference. Both Qantas and Virgin have the same sorts of lounges. I think Rex does as well. Like, I don’t think it’s exceptional. When I’ve been into any of them, you’ll see sports people, you’ll see business people. Yes. You’ll see politicians, you know, so there’s – frankly, I don’t think it changes the way people make a decision either way. All of the airlines have these facilities available to them, so it’s not like people are making a pro‑Qantas or an anti‑Qantas decision, depending on which door they walk through. I just don’t think that happens. But I do accept your point, frankly, around perceptions, I’m not sure where it ends. But I do accept your point that, you know, that we’ve got to ensure that we’re continually reviewing behaviours and arrangements to keep place with community norms.
CLARKE:
Alright. Something I think we’ll keep assessing and perhaps perpetually keep assessing. Stephen Jones, thanks very much.
JONES:
Good to be with you.