Labor continues to hedge about whether it supports a register revealing the identities of the beneficial owners of shell companies following confirmation by the Turnbull government that it will implement the policy.
The assistant treasurer, Kelly O’Dwyer, revealed in Guardian Australia on Friday that the government would follow the UK in creating a public register to help stamp out tax evasion. But despite campaigning intensively on the problems associated with multinational tax avoidance, Labor has declined to commit one way or the other.
Asked about the register, the shadow treasurer, Chris Bowen, told the ABC the opposition was “open to all proposals that make a genuine improvement in this area”.
But he said policymakers needed to be careful because some changes could create “unintended consequences”.
This month, the Panama Papers revealed that more than 800 Australians were on the files of the Panama–based law firm Mossack Fonseca.
The firm offers services as a “registered agent” for hundreds of thousands of individuals and corporate clients seeking to set up shell companies in low-tax jurisdictions.
Creating a register of beneficial ownership of shell companies, which is expected to be announced in detail by the government in the next couple of weeks, will bring Australia in line with the commitments it made at the G20 in 2015.
The Greens have offered in-principle support for a register. “A beneficial ownership register was the capstone of the Greens’ recently released tax-avoidance policy,” the Greens finance spokesman, Peter Whish-Wilson, said.
“We are very pleased to see the government following our lead on this.”
Mark Zirnsak, from the Tax Justice Network, welcomed the government’s announcement, saying it was one of the key “asks” of the network globally.
Zirnsak said it was great to see Australia “lead from the front”, but he warned that there was a long way between an in-principle commitment and a detailed policy announcement, and that the details of the new register would be critical.
He said the legal definition establishing beneficial ownership for the purposes of the register was very important. “The definition is going to have to be tight enough to make sure people don’t get through loopholes.”
Zirnsak said the register would need to be backed by serious penalties for non-disclosure to ensure the policy worked as intended – to reveal the people behind shell companies, including owners and their advisers.
He said having clarity around shell companies would assist in fighting not only tax avoidance and evasion, but also “all forms of serious crime”.
The commitment of the UK prime minister, David Cameron, to create a public register has been controversial among businesses, and many interest groups have said it would reduce Britain’s attractiveness as a destination for foreign investment.
Australian businesses are also likely to resist the move towards greater transparency. The Business Council of Australia has been contacted for comment.
