The latest Tax Office transparency report shows the oil and gas juggernauts are, again, Australia’s biggest tax grifters. Callum Foote and Michael West report on the good and the bad in multinational tax-dodging land.
The usual suspects are at it again. Dodging tax that is, failing to contribute to the society in which they operate. Rupert Murdoch, the cuff-linked pirates from Brookfield, Lendlease, and a slew of foreign multinational fossil fuel companies, the likes of Exxon, Shell, ConocoPhillips and BG Group. Donut. Zero income tax payable all round, for yet another year.
When we calculate the annual Michael West Media Top 40 Tax Dodgers, it’s a cert that America’s biggest oil company Exxon will top the charts once again. ExxonMobil Australia booked total income of $15.6 billion for the 2019-20 year, managed to completely extinguish its profits – thanks to the customary “debt-loading” – and paid not one red cent in income tax.
That’s $71.3bn in income over the seven years of available Tax Office transparency data. Zero tax from Exxon. And a piddling amount no doubt from the PRRT, the miserable failure of a tax which is supposed to capture a portion of the massive mineral wealth which Australia exports each year.
Each year, just once a year, we get to see how much tax the biggest companies in the world are, or are not, paying in Australia. It landed today, that is the annual Corporate Tax Transparency Report from the Australian Tax Office.
Broadly in trends, the oil and gas companies were the worst. The usual property groups such as Meriton, Brookfield’s BPIH, Toga and Lendlease paid not a zac. Neither did the big trusts such as Mirvac, Transurban and Sydney Airport, although they are trusts so don’t have to; that’s up to their members.
Once again the domestic banks paid their fair share. BHP and Rio did too. Iron ore magnates Gina and Twiggy paid roughly $1.3bn and almost $3bn respectively. The airlines as usual paid nothing, as did gas giants Santos and Origin Energy. Nothing from Adani Abbot Point, or coal companies Whitehaven and Peabody.
Murdoch’s News Australia Holdings paid nothing for the seventh year on the trot, despite $1.7bn in income, and Foxtel – as reported here – has been conveniently and slyly “disappeared” offshore to the secrecy jurisdiction of Delaware amid rumours of a sharemarket float.
Goldman Sachs finally bounced into the status of a taxpayer, as did tech groups Atlassian, Uber and Facebook; and Glencore is now paying a chunky amount. PwC ‘s consulting business again paid zero, this time on $700m in income.
Unfortunately, the latest ATO dataset does not capture the extent of the pandemic on businesses operating in Australia, as a vast proportion of companies within the dataset filed in December 2019 before the shock began.
ATO Deputy Commissioner Rebecca Saint was quick to point out the effect of the ATO’s Tax Avoidance Taskforce and the $10 billion it has brought to Commonwealth coffers over the past 6 years.
In the wake of the Corporate Tax Avoidance senate inquiry in 2015, the Taskforce was initially funded with $679 million over four years in 2016; and in 2019 a further $1 billion was provided to extend the operation of the Taskforce until 30 June 2023. In 2021-22, over 1800 staff at the ATO are funded by the Taskforce.
The Taskforce also employed the considerable use of industry expertise, primarily in gaining access to transfer pricing advice, though Saint assured MWM that, “I would never engage the Big 4 [accounting firms] on any of my cases” though maintaining that they have a very important role to play in Australia’s tax culture.
The Taskforce has resulted in half of the top 100 largest companies and economic groups operating in Australia being issued with a high assurance rating, up from just 6% in 2019, as a result of the ATO’s “significant investment of time and resources by the ATO in scrutinising structures, transactions and tax governance frameworks”.
As a result of the Taskforce’s scrutiny, Saint assured MWM that “There is nowhere to hide for these economic groups. The ATO has some of the best tax auditors in the world, not just Australia.”
Saint also emphasised that this scrutiny was ongoing and a large part of the Taskforce’s job is to make sure “we’re locking in these behavioural changes going forward, and monitoring whether they stick to them.”
An important step in the battle between corporate tax lawyers constant innovations around Australia’s tax regulations.
The report also reveals that roughly a third of all the companies analysed have paid zero tax, a metric consistent with previous years and one which Saint did not think would change substantially, even leading into the 2020-21 pandemic year.
While the Pandemic shellacked many businesses, the $90bn in JobKeeper subsidies propped many of them up, and some $20bn of it was wasted on companies which enjoyed rising revenues. Another $20bn went to corporations which did not need it, much was spent of executive bonuses and dividends to shareholders.
This time next year will will get a better idea of whether the corporate culprits which snaffled the massive JobKeeper subsidies paid their fair share of tax.