Australians are paying the price for the Coalition Against Tax Evaders’ inaction

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At its peak, the Stawell tire dump held nine million tires, making it one of the largest tire dumps in the world. After being inactive for more than a decade, the state Environmental Protection Authority finally stepped in and cleaned it up, recycling more than a million tires weighing around 10,000 tons.

Yet when they looked for someone to foot the bill, the government discovered that ownership of the dump had been transferred to an internet marketing company based in the tax haven of Panama. Asked about the sale, the previous owner admitted “I’ve never been to Panama and I don’t speak or understand Spanish.”

When the case went to court, Judge Karin Emerton called the sale of the site “outrageous”, suggesting that “it is possible to infer that the transfer of assets between two companies, to a storage company in Panama, is a means used to avoid obligations under the fire prevention notice”.

Tax havens are dubious and they are used to dodge all kinds of obligations. From drug lords to terrorists, from kidnappers to fraudsters, tax havens are the favorite hiding place for criminals.

When the Panama Papers were leaked to the media, they revealed how the super-rich were using tax havens to avoid paying their fair share. It was estimated that four fifths money in tax havens there is in violation of the tax laws of other countries.

They may be small islands, but the role of tax havens in the global economy is growing. An investigative journalist calls this world “Moneyland”. Another dubbed it “Kleptopia”. Lawyers and accountants design structures that are deliberately impenetrable.

Although the accounting tricks can be complex, the result is simple.

When multinationals and the mega-rich avoid taxes, you pay more. After all, someone has to pay for pensions and medicine. For every multinational corporation that evades taxes laughing on a beach in the Cayman Islands, there’s a hard-working taxpayer wondering why they’re being asked to pay more.

Tax havens make a mockery of the idea of ​​a level playing field. If you’re a start-up, you’re not afraid to try shifting profits to the Bahamas. Most of the new companies I talk to are more concerned about the lack of rapid antigen testing, skills shortages and slow broadband.

But when overseas-based multinationals use tax havens, Australian companies feel like clean cyclists in a race against Lance Armstrong.

Take the tire recycling business, for example. How could an honest company compete with a company that travels to Panama to avoid its cleaning obligations? In its simplest form, the argument against tax havens can be summed up in three words: it’s not fair.

An eyesore, a health hazard – and a burden on the taxpayer to clean up Photo: Getty

To be clear, we are not talking about small amounts. According to one estimate, about two fifths profits of multinationals are currently accounted for via tax havens. Aussie moguls have stashed $100 billion in these “treasure islands”. Globally, the amount of money in offshore bank accounts can be as large as one tenth of world GDP.

So what can we do about it? When the OECD and the G20 brought together more than 100 countries to strike a global tax deal last year, campaigners gave them half encouragement. The deal promised a lot, but there was always a risk that it would be delayed. Australia has remained largely on the sidelines, raising questions about how seriously the Morrison government is taking the issue of multinational corporations evading their obligations.

After all, if you want a guide to how liberals view multinational tax avoidance, don’t look at what they say, look at what they do.

In the last Labor government, the Liberals voted against key measures to combat tax evasion, including one that resulted in Chevron paying extra $300 million in taxation. Once elected, they several abandoned measures to close the tax loopholes of multinationals. The little they have done since has had the full support of the Labor Party, but it has not been enough.

It’s not enough to pretend to take action against multinational tax avoidance – you actually have to close the loopholes. If the federal government does not act, shell companies and dirty money will win. And Australia will continue to see abominations like the Stawell tire dump sold to a Panamanian company.

No country has ever dodged taxes on its way to prosperity. If you are not determined to fight tax havens, you are not on the side of the Australians. Only an Albanian Labor government will ensure that the multinationals pay their share.

Andrew Leigh is the Shadow Deputy Treasury Secretary. His website is

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