Wealthy business owners get tax shield. While PM talks up “have a go” society
Sketch: Turnbull dodges fearsome Cayman attack
Just 25 days: Labor gets down and dirty
Who else has money in tax havens?
Tax paid by companies controlled by Australia’s richest business people, including Gina Rinehart, James Packer and Lindsay Fox, will remain secret after the Coalition succeeded in exempting private companies from new tax disclosure requirements.
The exemption, which followed a low-profile lobbying push by wealthy business owners against obligations due to take effect in December, passed the Senate on Thursday as Prime Minister Malcolm Turnbull hit back against Labor’s “smear” on his personal wealth and offshore investments.
Prime Minister Malcolm Turnbull during question time on Thursday.
Prime Minister Malcolm Turnbull during question time on Thursday. Photo: Alex Ellinghausen
In his strongest question time performance since deposing Tony Abbott, Mr Turnbull blunted Labor’s two-day attack over his multimillion-dollar investments in hedge funds based in the Cayman Islands, dismissing it as a “the politics of envy [and] just another smear”.
Mr Turnbull insisted he had been “scrupulous” in paying tax on his offshore returns before talking up the egalitarian, “have a go” society of modern Australia.
“If [Bill Shorten] wants to go round wearing a sandwich board saying, ‘Malcolm Turnbull’s got a lot of money’, feel free. I think people know that,” he said.
“Lucy and I have been very fortunate in our lives. We have more wealth than most Australians, that is true. We’ve worked hard, we’ve paid our taxes, we’ve given back.
“I don’t believe that my wealth, or frankly most people’s wealth, is entirely a function of hard work … there are taxi drivers that work harder than I ever have and they don’t have much money. There are cleaners that worker than I ever have … this country is built upon hard work, people having a go and enterprise.
“There is lot of luck in life and that’s why all of us should say, when we see somebody less fortunate than ourselves, ‘There but for the grace of God goes me’.”
At the same time, the most fortunate in society got their way when the government forced through its “better targeting the income tax transparency” bill.
The law, which tax transparency campaigners branded a “big step backwards”, will exempt private companies with revenues of more than $100 million a year from a requirement to disclose how much tax they pay.
About 800 companies will benefit from the exemption, including James Packer’s Consolidated Press Holdings, Gina Rinehart’s Hancock Prospecting, Lindsay Fox’s Linfox and the scandal-plagued 7-Eleven convenience store empire of Russ Withers.
Former Australian of the Year Dick Smith said Mr Turnbull would be “ratting on ordinary Australians who pay their tax” if the government passed the exemption.
An Australian Tax Office official recently disclosed at a Senate hearing that one in five privately owned companies with revenues in excess of $100 million paid no tax last year and Mr Smith said the only reason that wealthy business owners were pushing for the exemption was to avoid paying tax.
A vote on the bill had not been expected on Thursday but the government capitalised on the absence of independent Senator Nick Xenophon, who was due to speak to the bill but was fronting a press conference at the time.
When Labor did not have a speaker ready in his place, the government was able to pass the bill on the voices without crossbench support being tested in a formal division.
The government had originally argued that the exemption was needed to protect business owners from kidnapping and extortion if their wealth was made public but it dropped that defence after Fairfax Media revealed that security agencies, including the Australian Federal Police, had not even been consulted on whether any threat existed.
Mr Turnbull said the transparency law, passed by Labor in 2013, had never been about raising more tax and that smaller and medium-sized companies would have been disadvantaged had it come into effect.
“If you were a food manufacturer, family-owned business, and you were dealing with Coles or Woolworths … it would mean that Coles or Woolworths on the other side of the table would know everything about your affairs and be in an even stronger bargaining position,” he said.
Mark Zirnsak of the Tax Justice Network said: “At a time when the world is moving forward on tax transparency, we have just taken a big step backwards.”
Read more: http://www.smh.com.au/federal-politics/political-news/wealthy-business-owners-get-tax-shield-as-pm-talks-up-have-a-go-society-20151015-gka899.html#ixzz3z0JBC8ua
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