The Treasurer of Australia, Joe Hockey, has assaulted multinational profit-shifters, labelling these companies as “thieves” and “cheats”. He has the public’s support to force multinationals such as Apple, Google and Microsoft to pay their fair share of tax in Australia and has been in contact with his British counterpart, George Osborne, who is committed to introducing a “Google tax”.
But, as reported in The Age, the Parliamentary Budget Office (PBO) claims that the proposed idea of a “Google tax” risks breaking Australia’s international tax treaties.
An interesting dilemma for Mr Hockey – and also for the Australian Trade Minister, Andrew Robb. Mr Robb is busy “negotiating the process” for the Trans Pacific Partnership, (TPP) which will probably provide further protections for these large multinationals. We cannot verify this – as TPP business is SECRET.
So the left arm of Canberra wants to (and needs to) tax these profit-shifters (to pay back Central bank debt), while the right hand of Canberra has allegedly allowed these multinationals to draft the new very complex treaty, the TPP. We cannot verify this – as TPP business is SECRET.
But what is not secret is that Google paid a paltry $295,000 in tax last year despite estimated earnings in Australia of $2 billion. At the same time, the tech giant pocketed $4.5 million from the tax man in “research and development offsets”.
And if the multinationals are taxed a little more, they will most likely get it all back (and more) when the TPP allows them to sue the Australian Government through some “loss of future profits” clause. (reported examples here)
And The Age reports: “The PBO has warned that the introduction of a “diverted profits tax” like ones being considered by Australia and Britain could provoke revenge taxes being imposed on Australian businesses operating overseas.”
I praise Mr Hockey for his clarity – calling these multinationals “thieves” and “cheats” – but one can only wonder whether “they” are planning to throw him “under the bus” (so to speak) after his next budget – and force Canberra to go about its business of servicing the Corporate agenda.
But maybe these large multinationals won’t have to manage Hockey’s hot air for long, as Canberra might soon sign the Trans Pacific Partnership – providing these large companies with all the global profit and market protections they want.
We can only guess, as it is all SECRET.