Malcolm Turnbull has defended an exemption allowing 1,400 companies associated with Australia’s business elite to avoid financial reporting requirements but said he would remove one of his own companies from it because it was now a “relatively small ... passive investment company”.
While attacking the government for “fighting tooth and nail for mega wealthy companies to keep their tax arrangements secret” Labor is also resisting demands it vote to immediately end the exemption, suggesting instead the issue should be sent to a parliamentary inquiry for proper consideration.
Crossbench senator Ricky Muir is demanding Labor support for ending the little-known longstanding exemption, after Guardian Australia published the full list of companies exempted from filing annual financial reports with the Australian Securities and Investments Commission (Asic) under a deal done by the Keating government in 1995.
Muir is linking the historic exemption with a separate tax transparency stand-off in the Senate, where the government is staring down demands for the mandatory reporting of big companies’ tax details.
Labor, the Greens and crossbench senators Muir, Jacqui Lambie, Glenn Lazarus and Nick Xenophon have demanded the government restore reporting requirements imposed by the former Labor government, requiring the tax commissioner to publish the taxable revenue and tax paid by private Australian companies with revenues above $100m.
The Coalition had repealed the reporting requirements – arguing they could lead to kidnappings, harm commercial negotiations and breach privacy. The Coalition has also argued most of the information would be available from Asic’s database after the payment of a small fee.
But the publication of the 1995 list reveals that some of the companies on it – those with revenues above $100m – would be facing the public revelation of their tax information for the first time if the Senate restores the Labor-era transparency provisions.
After an earlier Senate procedural bungle, the measures have now been included in a bill on multinational tax avoidance and the government has said it would rather see its own multinational tax bill defeated than allow the tax transparency requirements through.
Guardian Australia understands that Muir told the major parties on Tuesday he would vote to insist on the transparency measures if Labor agreed to amend the Corporations Act to finally remove the 1995 exemptions list.
It was Labor policy to remove the list before it came to government in 2007, but it did not implement that promise.
Asic has recommended the list be abolished in a recent submission to a Senate inquiry and Treasury sought to have it removed during the Howard government years.
The list is a who’s who of corporate Australia, including private companies associated with the Myer family, the Pratt family’s Visy Industries, media proprietor John B Fairfax, Transfield Holdings, News Corp subsidiaries Courier Newspaper Operations and General Newspapers Pty Ltd, chicken producer Inghams, the Moran Health Care Group, construction giant Grocon and pastoral companies such as S Kidman and Co, currently up for sale.
Some companies on the list have ceased to exist or are dormant, including one of Turnbull’s former companies – Allcorp Property Services, through which he ran a cleaning business with the late Neville Wran.
Turnbull and Partners Holdings Pty Ltd, which ran the investment bank he established with Wran and Nick Whitlam, later sold to Goldman Sachs, is also on the list.
Turnbull told parliament the company had “back in the ’90s [run] the Turnbull and Partners Investment Bank”.
“You see many of us actually had a career before we came into politics ... you know, I know it’s a shock but a lot of us have made a living doing other things. Anyway, so I had that investment banking business for many years in partnership with my very good friend Neville Wran and at that time it was, without question, a large proprietary company, a large company.
“It, however, it’s remained on the list of exempt proprietary companies but it really shouldn’t be on the list at all because it is not a large company anymore at all and it doesn’t meet any of the tests of being a large company at all. In fact it’s [a] relatively small company. But in any event, it is a passive investment company ... so we will be writing to Asic to make sure that it is no longer left on that list of large exempt proprietary companies. “
He also defended the government’s repeal of the tax transparency measures on the grounds that they “will not raise one cent of additional tax. It makes absolutely no difference to the tax collections.”
Asked about the publication of the list and whether Labor would support axing it, Labor leader Bill Shorten backed the idea of transparency but did not give a specific answer.
“Well, I think we have seen this phenomenon of the grandfather companies leap into real magnification overnight, haven’t we? The fact there is well over a thousand companies from 1995 [that] have been exempted from reporting their income – I think the whole challenge of tax transparency is an important debate. Australians should know what the largest corporations in Australia are paying in tax. If you want the rest of us to pay tax and accept the system’s working, I think it’s very important that the big end of town be transparent and clear in what they do.”
Labor sources suggested a decision on the future of the 1995 list should be sent to a parliamentary inquiry rather than rushed in connection with the separate legislation.
Labor senator Sam Dastyari told the senate that “shining a light in these corners ... will not only better inform the Australian public but will also drive policy change in this area”.
