Clamping down on multinational tax avoidance could boost the federal budget by more than $1bn over the next four years, a Parliamentary Budget Office analysis of Greens proposals shows.
Greens leader, Adam Bandt, on Saturday released a policy that includes stopping very large companies claiming a tax deduction for sending money offshore for the use of intellectual property – a common way cash is shifted out of Australia by technology and consumer goods groups.
He has also proposed toughening the rules for deductions on some loans and charging withholding tax at the top company rate of 30% on distributions from certain trusts that flow to offshore beneficiaries.
The Greens also want to stop companies claiming deductions for a bad debt when the person or company that owes the money is a related party.
Taken together, the package would boost income tax receipts by $1.1bn over the four-year forward estimate period, or $5.2bn over 10 years.
However, the gains would be reduced by transparency measures such as abolishing fees to obtain company documents that are among the highest in the world.
It currently costs $42 to order a document of 10 pages or more from the Australian Securities and Investments Commission database. In the UK, the equivalent document is available for free from Companies House.
The Greens also want to remove a “grandfathering” arrangement enjoyed by about 1,500 companies which exempts them from laws requiring them to file annual financial accounts, as well as decrease the threshold at which the taxation office publishes tax information about companies, from $100m in revenue to $50m.
They also propose dramatically increasing the penalties for promoting tax scams, but the PBO said this would have little impact on the budget.
Including the cost of the transparency measures, the Greens package would raise $926m over the forward estimates and $4.48bn over 10 years, the PBO said.
It adds to policy that already includes a 40% tax rate for big companies making “super profits” and a 6% wealth tax on billionaires.
Bandt said the party would push for the policies if it succeeded in obtaining the balance of power at the next election, which must be held by 21 May next year.
“Right now, we’re all being ripped off by multinational corporations who hide their profits in tax havens, shell companies and use accounting tricks to get away with paying their fair share of tax,” he will say in a speech on Saturday.
He said the means used by multinationals to avoid Australian tax were a rort and dodgy, but lawful.
“We must close the loopholes and stop the cash train departing our country,” he said.
“When a nurse is paying more tax than a multinational, something is deeply wrong.”
The Greens Treasury spokesperson, Nick McKim, said tax avoidance was a game to big companies.
“We’re sick of hearing that it’s ‘too hard’ to tax corporations making billions of dollars here in Australia,” he said.
“All of the tired excuses and threats of leaving the country are paper thin.”
