“Revenue is a more important issue post-COVID because there are potentially fewer companies contributing to consolidated revenue. Even those that are, are likely to have reduced profit because of COVID. That means everyone has to contribute fairly.”
On Wednesday, Mr Patrick used parliamentary privilege to pillory Lendlease and the ASX-listed property group’s chairman Michael Ullmer, saying he was a “corporate tax dodger” and the company has paid no corporate tax despite winning a billion dollars in federal government contracts since 2016. There is no suggestion Lendlease has acted outside the law.
Mr Patrick has previously criticised ExxonMobil chairman Richard Owen and EnergyAustralia managing director Catherine Tanna and plans to continue naming and shaming high-profile executives and directors of companies he believes are not paying their fair share of tax.
A Lendlease spokesman described Mr Patrick’s comments as “disappointing”, saying Mr Ullmer made a major contribution to Australian business and the nation’s cultural life and the business had offered to meet with him.
“We’re committed to paying the correct amount of tax in all jurisdictions in which we operate,” he said.
Deloitte Access Economics partner Chris Richardson, who was previously involved in an expert panel with the ATO to analyse the tax gap, said the major tax avoiding group was “not who the public thinks it is” and on international comparisons Australian businesses typically played by the rules.
ATO estimates from 2016-17 show large corporate groups have a 4 per cent net gap between the amount of income tax paid and what should have been paid, amounting to $1.98 billion of missing tax from a pool of $47 billion paid.
Individuals had a 6.4 per cent net gap totalling $8.4 billion of $124.1 billion paid, while small businesses had a 12.5 per cent gap worth $11.1 billion of $77.4 billion paid. This data does not reflect legal tax loopholes but does include estimates for incorrect deductions, undeclared cash wages, and in the case of large corporate groups “differences in the interpretation of complex areas of tax law”.
“This is a genuine all in it together moment. You want all Australians to be doing the right thing. One of those things before, during and after the crisis is to pay tax,” Mr Richardson said.
Tax Justice Network Australia spokesman Mark Zirnsak backed the campaign to crackdown on big businesses. He is also concerned about tax avoidance at the smaller level but said now was not the right time to focus on them “as we’re trying to stimulate small and medium businesses back to life”.
“But a tax on [digital giants like Facebook and Google] to capture the huge profits they are making out of Australians is a no-brainer and it’s not going to stifle their businesses,” Dr Zirnsak said.
Assistant Treasurer Michael Sukkar said Australia had become a global leader against multinational tax avoidance and had given the Tax Office more than $1 billion in the latest budget to continue its crackdown. This is expected to raise $4.6 billion in tax liabilities over the next four financial years.
“Over the past four years the government has implemented more than a dozen measures to ensure that everyone pays the appropriate amount of tax,” Mr Sukkar said.
Grattan Institute chief executive John Daley said the tax office and the government had “gone a fair way to try and shut down most of the loopholes” and the bigger issue was international giants like Facebook and Google not paying enough.
“Tax law is grey at the edges and companies do have choices about how far they push it.”
GetUp economic fairness campaign director Ed Miller backed Senator Patrick’s campaign against tax avoidance, but said spending was a tool to help with the recovery and the government should feel comfortable to run a deficit “as long as needed” to support the community.
Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.