Labor’s criticism of profits from company tax cuts going offshore creates “sovereign risk”, the cabinet secretary, Arthur Sinodinos, has said.
Sinodinos made the claim to suggest Labor was hypocritical for releasing a policy designed to encourage foreign investment in agriculture.
Speaking about the need to attract foreign investment on Sky with Joel Fitzgibbon on Wednesday, Sinodinos said: “If Labor’s so worried about foreign investment, why do they keep lambasting foreign investors and saying they will be the beneficiaries of our company tax cut, as if there’s something wrong with that?
“[This] walking both sides of the street by Labor in so many policy areas is actually in itself something which creates sovereign risk about our country.”
In its strict sense, sovereign risk describes governments defaulting on obligations but is used by some to mean any change in taxes, subsidies or regulations that are less favourable for businesses.
Asked why Labor criticised the company tax cut if it wanted to attract foreign investors, Fitzgibbon said: “We want to attract them but we don’t want to repatriate all our hard-earned money”.
Sinodinos said: “But that’s why foreign investors come here ... Otherwise, why do they come?”
Sinodinos said the government would legislate its 10-year $48bn company tax cut because “that’s what provides the growth impetus”.
“Companies need certainty about the direction, because it takes time to draw up their investment plans, to change their capital equipment, they think forward.”
Fitzgibbon said tax cuts to multinationals and attracting foreign investment were separate questions.
Under Labor’s policy, it would increase the threshold at which the Foreign Investment Review Board reviews investment in agricultural land to $50m. The threshold is currently $15m, meaning Labor would relax oversight of foreign takeovers of agricultural land.
Fitzgibbon said Labor wanted an “enormous investment in agriculture to meet our future aspirations” and did not want to scare foreign investors away with red tape.
He said the government’s decision to lower the threshold to $15m at the Nationals’ behest was a “dog-whistle”.
Sinodinos said checking foreign investment was in the national interest and encouraged confidence, which increased foreign investment.
Host David Speers also asked Sinodinos about reports that Liberal MPs used their taxpayer-funded office allowance to purchase data registry services from Parakeelia Pty Ltd, a company that donated significant sums to the Liberal party.
Sinodinos said it was a legitimate office expense and he “thinks he would have” paid Parakeelia out of his office allowance.
“That would be used to provide information that we gather on electors ... we use it to try and do our electorate business.”
Sinodinos said he believed it was a legitimate use of taxpayer funds.
