Doesn’t the public have a right to know the names of the global companies using offshore tax havens and transfer pricing to minimise their tax? That’s the question a Senate committee on tax dodging wanted answered this morning — but the Australian Taxation Office argued it had to protect the confidentiality of details provided to it by big business, to foment goodwill.

The Uniting Church put in a freedom of information request for the Tax Office to release the names of companies accused of tax avoidance through international channels. But the 200-page document the ATO released in response in January was heavily redacted, as the Tax Office claimed it did not have to fully comply with the FoI request due to confidentiality provisions. The Senate Economics Reference Committee now wants an unredacted document, but the Tax Office is refusing, citing public interest immunity. Labor Senator Sam Dastyari grilled Tax Commissioner Chris Jordan for 45 minutes on the public interest immunity claim this morning, saying the release of the names would be in the public interest, but Jordan held firm.

The standoff was the most heated part of the start of three days of hearings of the Senate Economics Reference Committee to take place in Sydney, Canberra and Melbourne. The committee is looking at corporate tax avoidance, particularly of multinational corporations. The formation of the committee sailed unopposed through the Senate, and it is believed to have the at least tacit support of both the Labor and Liberal parties, as well as the Greens. Appearing later today will be representatives of tech titans Apple, Google and Microsoft, as well as News Corp.

Labor Senator Dastyari asked Jordan why the documents hadn’t been released, as the ATO is legally allowed to breach taxpayer confidentiality if the Parliament requests it. “The rules of freedom of information are different from those regarding parliamentary committees,” Dastyari said. Regardless, Jordan argued, the ATO’s ability to do its job would be affected should the details about individual companies be revealed. “It would be unprecedented for taxpayer-specific situation to be provided in a public way … We need to be able to have transparent and open relationships with companies. We cannot have a situation where companies argue they won’t share info with us under belief [it will be revealed].”

“But their sharing information with you is a statutory obligation,” Dastyari argued. “These companies aren’t giving you information because you’re nice. They have a legal requirement to do so. Are you saying that if you revealed information … Australian companies would stop meeting their legal obligations?” Jordan responded that it wasn’t in taxpayers’ interest for the ATO to have a tense and adversarial relationship with big businesses. “It’s better for the system if we have an open and transparent relationship with these taxpayers.” Treasurer Joe Hockey had signed off on the public interest immunity claim, Jordan added in response to questioning.

In his opening comments, Jordan said he was aware of media commentary that said the ATO had gone soft on big business. He assured the committee this was not the case, with the ATO still open to litigation to clarify the law, or to send a message. He added that the ATO didn’t hesitate to pass on information to law enforcement. “You can trust us to get the balance right between help and enforcement and pursue those who are playing on the edge, or simply doing the wrong thing,” he said.

The ATO’s testimony followed a panel with three of Australia’s most eminent tax academics. Two of the three — Professor Richard Vann of the Sydney Law School and Professor Kerrie Sadiq of the QUT School of Accounting — cautioned politicians against proceeding unilaterally on attempts to make international organisations pay more tax. The OECD will in June table the recommendations of its base erosion and profit shifting project, and corporations like Google and Apple have urged the Australian government to wait on this process before moving on tax issues. “The goal of multilateral tax coordination shouldn’t be to see one country gain revenue at the expense of another, but to ensure a consistent rules ­based approach to taxation, creating certainty for companies operating across borders and predictable revenue streams for government budgets,” Google said in its submission.

Vann echoed similar concerns, saying he couldn’t think of any legislative change that would result in a “big pot of gold” for the government if it moved unilaterally. “For a country like Australia, staying within the pack is a good strategy,” Vann said. “That’s been our strategy for many years. ”

But Professor Antony Ting, a noted expert on Apple’s tax minimisation strategies from the University of Sydney’s School of Business, said the United States had been actively undermining the OECD process (a characterisation Vann said he opposed, though he did allow that American lawmakers may be reluctant to pass any tax increase).

In his submission to the inquiry, Ting noted:

“The US has been knowingly facilitating its [multinational corporations] to avoid foreign income tax. There has been no sign so far suggesting any significant change of the US attitude … In fact, the involvement of the US in the BEPS Project has been described by a prominent US tax commentator as ‘a polite pretense of participation with quiet undermining‘ (emphasis added). It appears that the primary objective of US involvement in the BEPS Project is not to avoid double non-taxation, but to minimise the impact of the Project on the country and its MNEs.”

In his appearance this morning, Ting said Australia should continue to participate in the OECD project, which is widely expected to deliver more transparent tax information to governments. But if it doesn’t do enough, Ting said, the government should be open to another plan. For example, the ATO could be given the power to tax foreign subsidiaries without “economic substance”. And it should be able to ignore contracts between subsidiaries that are implemented only to avoid tax. Seemingly alluding to a recent story in the Fairfax papers that claimed News Corp was lending subsidiaries money at inflated interest rates to avoid tax, despite it being able to raise money far more cheaply externally, Ting said the ATO could be given the power to avoid such contracts. “If it’s not ‘real’ … why should we respect that as a genuine transaction for tax purposes? It’s tax-driven, so maybe we should ignore that contract. If a group can borrow at 2%, maybe Australia should only allow a deduction at 2%.” It could be possible to structure a law in such a way that this would not breach tax treaties Australia has with other countries, Ting said.

It’s these kind of suggestions the committee is most hopeful of pulling out of the three days of hearings. With the government in need of more revenue, the Senate is open to suggestions.