The Australian Taxation Office (ATO) released figures on Wednesday which revealed that large corporations and multinationals avoided paying $2.5 billion in tax in the 2014-15 financial year.
In reality, that $2.5 billion figure is probably a conservative estimate. The ATO figures only include information that large companies are bound to pass on, and don’t include the taxes multinationals are dodging through legal loopholes.
This is the first time the agency has placed a specific dollar value on the ‘tax gap’. The tax gap measures the theoretical difference between the total amount of income tax collected and the amount the ATO estimates would have been collected if 1400 corporate groups with gross incomes of over $250 million were fully compliant.
The figures are remarkable when you consider the lengths to which this Government will go to save a few dollars.
We have been lumbered with a second-class broadband network, because we have been told that we can’t afford better.
Worse still is the fact the Government is constantly pushing to lift the retirement age, because apparently we can no longer afford to pay the Age Pension to 65-year-olds.
This $2.5 billion we are missing, isn’t a one-off figure. The ATO’s corporate tax gap estimate covers a seven-year period between 2008–09 and 2014–15. The tax gaps for earlier years were $2.7 billion in 2008–09, $2.3 billion in 2009–10, $2 billion in 2010–11, $2.7 billion in 2011–12, $2.5 billion in 2012–13, and almost $3 billion in 2013–14.
If the Government was serious about cracking down on these large corporations, it could start the budget repair.
Instead, we have money going in the other direction. The Government seems hell-bent on lending allegedly corrupt mining company Adani $1 billion to start an unwanted coal mine that banks will not touch with a ten-foot pole.
It would seem the only way we can ever address tax reform that targets the biggest tax dodgers, is to start with some donation reform, changing the nature of political donations. Perhaps then we can discover the proportion of companies not paying their way, and why they are continually allowed to get away with it.