Neither Liberals nor Labor plan to act, despite 800 Australians being on files of Mossack Fonseca and contrary to pledges at Brisbane G20 meeting in 2014

This article is more than 4 years old

This article is more than 4 years old

Neither major party in Australia is promising to outlaw shell companies that disguise their true beneficial owners, despite the revelation that more than 800 Australians were on the files of Panama–based law firm Mossack Fonseca and contrary to pledges made with great fanfare at the Brisbane G20 meeting in 2014.



A spokesman for the prime minister, Malcolm Turnbull, said there were no immediate plans to change the current laws.

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Labor’s assistant treasurer Andrew Leigh said Labor would “carefully consider proposals for making information regarding all companies available on a public register” but did not make a specific promise.

Mark Zirnsak, of the Tax Justice Network, says implementing the G20 pledge that beneficial ownership information be publicly available should be Australia’s immediate response to the Panama papers revelations.

“The government should respond to the Panama papers by following through on its G20 commitments and implement a public registry of who the real owners of companies are,” Zirnsak said.

“Shell companies with front people have a long history of being vehicles for all sorts of harmful and criminal activities, from tax evasion, to money laundering, to illicit arms dealing and funding terrorism. It should be against the law for an Australian to act as a front person of a shell company where the real owner or controller of the company is hidden. It should also be against the law for an Australian to own or control a company where they have not disclosed that fact,” he said.

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The UK government will require the disclosure of the beneficial owners of companies in a public register from June, despite complaints from British business, and at the Brisbane G20 all governments agreed to principles on beneficial ownership transparency, including that beneficial ownership information be recorded.

But, like many other countries, Australia has not acted on the pledge, and a Transparency International report late last year found Australia had complied with only one of the principles – the one that requires a legal definition of what beneficial ownership is.

“Current laws and regulations do not require legal entities, other than those with anti-money laundering obligations to maintain information on beneficial ownership. Consequently, there is also no requirement that the beneficial ownership information is maintained within Australia,” the report says.

If it suspects wrongdoing by a publicly-listed company, the Australian Securities and Investment Commission has been given powers to help it trace the beneficial ownership of shares.

The chair of the Senate inquiry into tax avoidance, senator Sam Dastyari, told Guardian Australia the inquiry may now take further evidence on what the Panama papers reveal about income tax avoidance by high wealth individuals. The committee – which uncovered rampant tax minimisation and avoidance by major international and Australian companies – was due to report on 22 April.

Zirnsak said Australia should also extend whistleblower protection laws to cover private businesses so that individuals would report shady practices.

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Labor has promised to do this.

The opposition leader, Bill Shorten, announced last December Labor would extend whistleblower protections to the private and not-for-profit sector, and that anyone who took adverse action against whistleblowers would face two years jail and a $18,000 fine, with whistleblowers able to take civil action for reinstatement and compensation.

On 12 May, British prime minister David Cameron will chair an international summit in London on tax avoidance and evasion. Given an Australian election is likely to be called around that time Australia will be represented by the high commissioner and former foreign minister Alexander Downer.

Other EU countries are due to introduce central registers of corporate beneficial owners by 2017 as part of their implementation of the EU’s Anti-Money Laundering Directive. However, these registers need only be accessible to ‘competent authorities’, financial intelligence units, obliged entities and “persons who can demonstrate a legitimate interest to access the information”, and not the wider public.