Nearly 1,500 companies will continue to be exempt from filing reports to the corporate regulator after the Senate voted down a last-minute attempt to remove the historic exemption.
Guardian Australia revealed the full list of 1,498 companies that were – as of 2011 – exempt from filing annual financial reports with the Australian Securities and Investments Commission under a deal done by the Keating government in 1995.
Further analysis suggested one in six of the companies that remained registered were either political donors or government contractors.
Crossbench senators raised concern about the exemption, amid an intense political dispute over tax transparency policy and the government’s separate legislation to clamp down on multinational tax avoidance.
A last-ditch attempt by the Australian Motoring Enthusiast party senator, Ricky, Muir to remove the “grandfathering” arrangement failed on Thursday evening, when the Senate voted 36 against and 25 in favour of the amendment.
“The major parties, despite various commitments made over the years, have failed to resolve this issue,” Muir said. “Therefore, it is my intent to try to clear this up today.”
His proposal was blocked by the Coalition and the Greens, which had reached a deal on other transparency measures and argued the change would scuttle the multinational bill’s passage into law.
The Greens senator Peter Whish-Wilson said his party wanted to remove the grandfathering arrangement “but it will destroy this bill tonight, which is delivering an outcome on multinational tax avoidance”.
“We support the principle and we congratulate Senator Muir for raising this issue, but we will not be supporting his amendment tonight,” he said. “We are building momentum towards getting that transparency that we want in place.”
The finance minister, Mathias Cormann, said the government opposed “amending these rules on the fly as part of this critical piece of tax integrity legislation”. He noted the exemption had not been removed by the opposition when in office.
“The grandfathering of exempted proprietary companies was done to avoid disrupting businesses which would have established themselves under other business forms if they had known they would have additional compliance and reporting requirements which might be subsequently introduced,” Cormann said.
The independent senator Jacqui Lambie said companies had initially been told the exemptions would remain in force for only a few years, but “nobody has the guts in this chamber to remove them because they are special”.
Lambie said the Coalition-Greens deal “equates to a woman that is in her first trimester of pregnancy – because you have done about 30% of a deal”.
“You have done a crappy deal for Australians out there today and you should be ashamed of yourself,” she added.
The Labor senator Sam Dastyari blasted the Greens for not insisting on the amendment being added to the multinational tax bill, suggesting linking the measures would have put pressure on the government to accept them.
“The leverage to get that big change, to get that important change, to get these 1,497 companies in that disclosure, is about to be lost,” Dastyari said. “The leverage was attaching it to this bill and the Greens sold it out.”
The independent senator Nick Xenophon also supported the amendment, saying it was “time these 1,500 grandparents got a bit of sunshine”.
Muir’s amendment won support from Labor and most crossbench senators but fell short of a majority in the Senate.
The Greens vowed to work with Labor and the crossbench next year to bring the remaining grandfathering provisions before a Senate inquiry, which could pave the way for change. They also argued some of the companies on the list would face the release of basic tax information because of other measures in the bill that passed the Senate with the government’s support on Thursday.
The bill gives the Australian taxation office greater powers from January to target multinational companies using “artificial or contrived arrangements” to avoid their domestic tax obligations. Companies found to be in breach of the new law will have to pay back double the tax they owe.
The bill also implements the type of “country-by-country reporting” backed by the Organisation for Economic Cooperation and Development, which will give tax authorities more information about how multinationals operate. The measure has been warmly welcomed by the Tax Justice Network of Australia, a group of non-government organisations pushing for tax transparency.
The Greens and Coalition agreed to add two further measures to the legislation, including the reintroduction of a form of tax transparency for big Australian private companies that had been wound back by the Senate in October.
The deal will require the tax commissioner to publish the amount of tax paid, total income and taxable income of any Australian private company with an annual turnover of at least $200m.
This exposes fewer companies to disclosure than the $100m threshold which had been part of tax transparency legislation passed by the former Labor government. The $100m minimum had also had been set in an earlier Senate amendment to the government’s bill that the House of Representatives refused to pass in November.
The Greens have rejected Labor claims of “selling out”, arguing the deal secured progress because at least 281 companies now shielded will be subject to disclosure.
They said they had also secured agreement to force multinational corporations with global revenue of at least $1bn to file “general purpose” financial statements to the corporate regulator, instead of “flimsy” special purpose statements.
