Private companies such as those controlled by the billionaire mining magnate Gina Rinehart will be exempt from new laws requiring the publication of their tax information because of fears this could jeopardise their safety and possibly lead to kidnappings.



The assistant treasurer, Josh Frydenberg, told the Coalition party room on Tuesday the publication of the financial statements of large private companies raised “real safety concerns”. He said the 700 private companies captured by the new law covering more than 1,600 companies with a turnover of more than $100m should be exempt.

The prime minister, Tony Abbott, agreed the Coalition would implement this exemption. The changes will require a legislative amendment.

Frydenberg was responding to questions from senator Cory Bernardi and the New South Wales MP Craig Laundy, who argued private companies should be exempt on commercial and personal security grounds. They argued the information could harm a company’s commercial operations and potentially leave private business people and their families at risk of kidnapping.

After the meeting, Frydenberg said: “The government is considering its response to concerns about the publication of information about the tax affairs of privately owned Australian companies. Legitimate concerns have been raised about the misuse of information related to privately held companies that is made public as part of tax transparency measures.”

Mark Zirnsak, of the Tax Justice Network Australia, said the kidnapping argument was “nonsense”.

“This is government giving in to the big end of town,” he said. “There is no reason why there should not be greater transparency around the tax paid by multinational companies, so there can be community confidence that these companies are paying their share of tax.

“Arguments that greater transparency will lead to greater risks of kidnapping are nonsense. Australia is not some fictionalised version of Colombia.”

The tax transparency laws, passed by the former Labor government, required that the Australian Tax Office begin publishing tax details of about 1,600 public and private companies with an annual turnover of $100m or more from July. Under the laws, total income, taxable income and income tax payable must be reported.

The ATO says, “The first objective of [the laws] is to discourage large corporate tax entities from engaging in aggressive tax avoidance practices. The second objective of these amendments is to provide more information to inform public debate about tax policy, particularly in relation to the corporate tax system.”

The shadow assistant treasurer, Andrew Leigh, said the rollback showed the treasurer, Joe Hockey, was “full of big talk about cracking down on tax avoidance … but consistently lets companies off the hook”.

“Rolling back these transparency laws means shielding big multinationals from public scrutiny,” he said. “Without transparent tax reporting, it will be easier for some big firms to continue to avoid paying their fair share of tax.”

Greens leader Christine Milne said the “the kidnapping argument is laughable. This is just yet another example of the Abbott government doing everything it can to protect the people it governs for: the rich.”

Business groups had argued against the publication on the grounds that it could be misleading but the tax office has now agreed that companies can review the information before it is made public.