Multinational companies appearing before the Senate Economics References Committee’s inquiry into tax avoidance yesterday gave us an insight into what informs their decisions about where to base their offices around the world.

Oil giant Chevron has hundreds of companies in Bermuda because of its reputation for “maritime safety”.

Airbnb has a head office in Ireland because of the “skilled workforce” available there.

And Uber directs Australian revenue to an office in the Netherlands because Dutch workers, it says, are so talented.

Nothing to do with the fact that Bermuda, Ireland and the Netherlands are all tax havens that allow multinational companies to transfer profits earned in Australia offshore, depriving us of tax revenue.

Such is the contempt for Australia of these tax avoiders that they can’t even be bothered inventing a decent lie to explain their use of tax havens.

The committee, led by Labor’s Sam Dastyari, has done excellent work in drawing public attention to the systematic avoidance of tax by multinationals via the use of tax havens and other tax-minimisation mechanisms. As almost every company appearing before the committee has insisted, what they are doing is perfectly legal. And that is exactly the problem — governments can address this by tightening laws in areas like transfer pricing and by improving transparency.

And that’s all the more reason why the government’s unwillingness to pass its own multinational tax legislation — because the Senate has refused to accept the absurd exemption of large private companies from reporting obligations — harms the national interest and the government itself. The warm inner glow of doing what its big business mates want should be no substitute for the government taking the lead on curbing multinational tax avoidance.

Peter Fray

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