What do we need? A royal commission into tax evasion now
By Jenna Price
19 April 2018
We need a royal commission into tax. Tax avoidance, tax minimisation, tax evasion and all the other sneaky, creepy ways corporations get around paying tax. I think I could get a former treasurer of the year to back me up.
Why do we need a royal commission into tax? We need it precisely because the government tells us there is no problem with tax compliance by big business. In exactly the same way, it told us there was no problem with banks.
Nothing has exposed the cosy relationship of the Coalition with the banks in quite the same way as failed former deputy prime minister Barnaby Joyce's stance then and now. Then he said there was no need for a royal commission. Now he says he was naive and wrong.
We aren't sorry he was wrong – he's been so wrong before in so many ways - because it makes crystal clear to the community where his values are, where his natural allegiances are. It also makes perfectly clear where the allegiances of influential Liberals are, including Malcolm Turnbull and Scott Morrison. Former bankers, former lawyers, all a bunch of jellyfish when it comes to standing up to corporate influence.
Over just a few weeks, under the gimlet gaze of former High Court judge Commissioner Kenneth Hayne, cheats, lairs, liars and thieves been held to account. I mean, how good was it when Hayne insisted Marianne Perkovic from the Commonwealth (hah) Bank answer the questions.
"We will get along much more quickly and efficiently and if I may put it quite bluntly, it will be safer for you, if you attend to counsel's questions. If you need to stop and think about your answer take your time."
It puts into perspective a comment made about Hayne earlier this year to the Australian Financial Review: "Ken is brutally direct."
Brutal. Businesslike. Whatever you call it, the systemic abuse of power and privilege has been exposed. Every day brings horror. My favourite, no, not exactly favourite, my most compelling example of misconduct was the news on Thursday the Commonwealth Bank charged dead peoplefees for advice it wasn't providing. That was the same day ANZ spruiked #financialwellbeing. My guess is our collective financial wellbeing would all be a lot better off if our institutions stopped stealing from us.
Now if you think the banking royal commission terrifies bankers and their friends, imagine what a commission into tax evasion/avoidance/minimisation would do.
Now I couldn't quite get Wayne Swan to straight out back the idea but I reckon I could talk him around. In fact, I don't think it would take long at all.
Swan, former Labor treasurer now running for the ALP presidency, has just been appointed as a commissioner to the Independent Commission for the Reform of International Corporate Taxation (ICRICT), alongside Joseph Stiglitz and Thomas Piketty (double swoon). The aim of ICRICT is to bring enough pressure to rewrite international rules so corporations can't avoid paying their fair share.
"We heard for years the denials from the finance sector that royal commission was needed but now we see the mess beneath.
"Surely it is time the industry itself acknowledged the folly of its ways and began to support fundamental reform of the system. If the banks don't support fundamental reform, then the pressure will be unavoidable for a further royal commission."
And what would that further royal commission be? Nothing could be more useful to the Australian economy and therefore to the Australian people than getting companies to pay a decent level of tax, to support the way of life we love. We need to rethink why tax rules are structured so that it's legal for companies to pay so little tax yet take advantage of all the other benefits of operating in Australia, such as the education of our excellent workforce and the health of our citizens. And that infrastructure and those services are built with tax.
Swan says: "We have seen more clearly the evidence of outright tax evasion and massive avoidance across our large corporates. Everyone knows they use big money and big corporate power to try to intimidate the tax office which has fought back bravely."
It depresses me that the Coalition is now pretending it thinks the royal commission is a good idea; or that the cure would be carving off financial advice. That's not the bad bit. The entire system has septicaemia and chopping off a limb won't remove the poison because the poison - the addiction to power and privilege – is endemic. It was only eight months ago that Treasurer Scott Morrison said Australia's existing regulatory powers were enough.
"The things that a royal commission could potentially recommend: we're already doing that," he told Reuters.
Morrison may not have known that AMP lied to ASIC about 20 times and those are just the lies we know about.
It would be hard to believe that the only types of corporate institution, the only sector which broke the law and the spirits of its customers, would be financial, the banks and the bankers. How could we assume that money doesn't corrupt the behaviour of all sectors where there is poor oversight and even less scrutiny?
A royal commission would clear that up for all of us, one way or another.
Jenna Price is an academic at the University of Technology Sydney and a Fairfax Media columnist.