The usual culprits top the list again this year: Rupert Murdoch’s Fox, Frank Lowy’s Westfield and the host of real estate trusts listed on the Australian Securities Exchange.
These are our thoroughbreds of tax avoidance; the nation’s chief “leaners”, as opposed to its “lifters”, the ordinary tax-paying Australians, small businesses and big retailers who fork out their fair share.
Those singled out in for special mention in the latest report from the Tax Justice Network will scream blue murder that they obey the law, that they have a duty to their shareholders to minimise tax. This much may be true. The one simple thing about corporate tax though, despite its impenetrable complexity, is that every year in a company’s financial statements there is a number showing exactly how much has been paid.
Or in the case of Rupert Murdoch’s media empire, how much it got back. This group has historically “leaked” very little in tax but last year it even won an $880 million rebate from the Australian Tax Office for a company restructure – where no money changed hands – back in 1989. It has now split into two entities, News Corp and Twenty-First Century Fox.
Fox, which led the pack for sheer numbers of tax haven subsidiaries, was also cited for the dubious honour of having the greatest negative impact on Australia’s tax base. With its effective tax rate of just 1 per cent – even before last year’s rebate – the Tax Justice Network estimates $1.6 billion in tax forgone.
Elsewhere, the word “aggressive” was used a number of times in respect of the tax practices of the world’s biggest shopping mall operator Westfield. Toll-road operator Transurban, Sydney Airport and many stapled trust structures spawned from the loins of the Macquarie Group were also among the nation’s top leaners.
They will argue it is up to their unit-holders, members in the trust that is, to pay income tax not them. Yet many of these are offshore or are trusts themselves which enjoy special tax relief.
The two biggest miners, BHP and Rio Tinto, were nominated for failing to disclose all but a fraction of their tax haven subsidiaries. These pay a good deal more tax though than the third-biggest miner, Glencore, whose coal holding company enjoyed an $8 million rebate last year.
The point is that while tax avoidance is rife among companies in the ASX Top 200, which are covered by the analysis, it is far worse among multinational companies who have their headquarters elsewhere.