Labor Senators agree with the intent of this Bill. It is a perfectly reasonable community expectation that government procurement and grants not contribute to the profits of entities that utilise tax havens and other tax avoidance measures to minimise or indeed, eliminate the tax they would otherwise pay in Australia.
We acknowledge the evidence received by the Committee during the course of this inquiry that the Bill would create significant interpretative and administrative challenges to the agencies charged with ensuring compliance and the entities, particularly small and medium enterprises, on which it would impose obligations as outlined in Chapter 2 of the report.
We also note the submission of the Department of Finance in which the Department states that the PGPA Act is not a legislative scheme that is amenable to amendment to achieve the intent of the Bill presently before us.
We also note the evidence of Professor Louis de Koker and the Community and Public Sector Union that independent checks should be required of suppliers who currently self-disclose and self-certify, and that companies should be required to disclose any convictions or notices to comply issued to them in foreign tax jurisdictions respectively. These two matters are not dealt with in the Bill.
While we acknowledge that the government has enacted some measures to tackle black economy activity, we do not agree that those measures are directly relevant to the Committee’s consideration of this Bill. The tax avoidance measures that this Bill is directed against do not generally occur in the black economy. Rather, they occur in plain sight.
While Labor Senators do not support the passage of the Bill, we are of the view that there is considerable scope for the government to achieve the intent of the Bill through an effective legislative scheme that addresses the interpretative and administrative challenges and some other deficiencies of the Bill outlined in the report and the submissions received.
That within the term of the 46th Parliament, the government commences work on a legislative scheme that will impose obligations on government suppliers and grant recipients to disclose their use of tax havens and similar tax avoidance practices and improve tax compliance through the administration of government procurement and grants.