Bill Shorten says tax transparency figures are remarkable and urges Malcolm Turnbull to focus on large companies instead of cutting health funding

This article is more than 4 years old

This article is more than 4 years old

More than one-third of the largest public companies and multinational entities paid no tax in Australia in the most recent financial year on record, according to the first transparency report published by the Australian Taxation Office.



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Qantas Airways was the company with the highest total income that paid no tax, followed by a subsidiary of mining group Glencore (GHP 104 160 689 Pty Ltd), ExxonMobil Australia and Lend Lease. These companies reported a taxable income of zero, despite having incomes in billions of dollars during 2013-14.



The ATO data release covers Australian public companies and foreign entities, public and private, with total annual incomes of $100m or more. This was the category of businesses the Coalition did not seek to shield in the recent political dispute over tax transparency for Australian private companies.



Of the 1,539 individual entities listed in the ATO report, 579 (or 37.6%) paid no tax, and 920 (62.4%) paid some tax in 2013-14.

The ATO then broke down these entities into 1,331 “economic groups” to reflect the fact some were part of one corporate group. Under this analysis, 26% of the economic groups did not pay tax that year.

The energy and resources sector had the highest proportion of public companies that did not pay any tax, with 60% of them in the nil-tax category. Tax officials have previously said big resource projects often incurred large expenditure upfront, and taxes were generally not paid until well into the production phase.

Guardian Australia is not suggesting the companies that paid no tax or low amounts of tax in 2013-14 have done anything illegal, because various types of deductions and carry-forward tax losses are allowed to be claimed.

The report shows 346 (22%) of the companies incurred a loss in 2013-14, and 120 (8%) made use of prior losses.

Qantas said in a statement: “Qantas reported a record loss of $2.8 billion in 2013-14, so, as the report states, we had no taxable income and therefore did not pay company tax.”

Glencore said it had inherited significant tax losses when it acquired Xstrata in 2013, including from Jubilee mining operations in Western Australia that subsequently proved to be uneconomical. It said the combined data for the various Glencore Australian subsidiaries showed total income of $24bn, but a total taxable income of just $315m, which resulted in the payment of about $88m in tax.

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Lend Lease said its tax deductions exceeded its assessable income for the year, partly because it had carried forward capital losses that could be offset against capital gains. The company added that it had a cooperative relationship with the ATO, which reviewed its tax return and did not make any adjustments.

The Labor party said the data raised “significant concerns” and called on the government to crack down on tax loopholes.

“We can see that of the 1,300 or so economic groups that are covered by these tax transparency data, around one in four paid no tax,” the shadow assistant treasurer, Andrew Leigh, said.



“In certain sectors, it’s bigger than that. If you look at foreign-owned companies, operating in the banking and finance sector, nearly half paid no tax in the year for which they’re reporting.”

The assistant treasurer, Kelly O’Dwyer, said the Coalition had taken action to ensure the ATO had the powers it needed, and it was up to individual companies to explain why they had not paid tax in any particular year.



“There are some reasons why it would be that some companies are not paying tax at all, particularly in circumstances where there might be losses,” she said. “Just because they don’t pay tax doesn’t mean that they are avoiding tax.”

O’Dwyer pointed to the passage of multinational tax avoidance legislation in the final parliamentary sitting fortnight of the year, which gave the ATO greater powers to clamp down on contrived structures.

“All of these companies are paying their fair share of tax and all of these companies are subject to our Australian taxation laws and our strengthened Australian taxation laws,” she said.

“I want to stress that over half of these companies have been audited by the Australian Taxation Office within the last three years.”

The Labor leader, Bill Shorten, said the figures were “remarkable” and urged the prime minister, Malcolm Turnbull, to focuson large companies instead of cutting health funding.



The Australian Council of Trade Unions said the figures showed the country had “a revenue problem, driven by corporate tax avoidance”.

“The question for Malcolm Turnbull is whether he is too afraid to go after his friends in the big end of town,” the council’s president, Ged Kearney, said.

Facebook Twitter Pinterest The minerals resource rent tax brought in just $287m from seven companies in 2013-14, with BHP Billiton topping the list by amount paid. Photograph: Marc Dozier/Corbis

The Business Council of Australia urged people to interpret the data carefully.

The group’s chief executive, Jennifer Westacott, said companies did not pay income tax on total income or revenue, but on their profits after paying all expenses including wages, capital replacement, supplier costs, fleet costs and other operating expenses.

“Profit margins will also vary by industry reflecting different capital intensities,” she said. “Many small and medium-sized businesses, in particular, do not make a profit in a given year, and even large businesses go through cycles where profits from large investments take time to be realised.”

The report lists the total income, taxable income and tax payable for each entity. It does not contain information about Australian private companies, but some of those details are due to be published next year.

The Coalition initially won Senate support to scrap an element of previous Labor legislation requiring the publication of details of all private companies with annual incomes of $100m or more, but then in a deal with the Greens it reinstated the requirement for private companies turning over $200m or more.

The leader of the Greens, Richard Di Natale, said the release of the data should trigger a long-overdue public discussion. He said big corporations “might be able to afford the best tax lawyers to help them stay ahead of the parliament but they won’t be able to escape the court of public opinion”.

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The tax transparency measures are separate from the dispute over a list of companies that enjoy a historical exemption from filing reports to the Australian Securities and Investments Commission.

Thursday’s report also details the amounts paid under the petroleum resource rent tax and the minerals resource rent tax. The petroleum tax brought in $1.8bn from 12 companies in 2013-14, with the highest amount coming from a BHP company, BHP Billiton Petroleum (Bass Strait) Pty Ltd.

The minerals tax, known more commonly as the former Labor government’s mining tax, brought in just $287m from seven companies in 2013-14, with BHP Billiton again topping the list by amount paid. The government of the former prime minister Tony Abbott had campaigned against the tax, saying it had fallen well short of initial revenue forecasts, and repealed it in late 2014.