In the end a small business person, or any taxpayer, should set up their tax affairs to ensure they pay the right tax. Some people would view that as looking for the least tax, which is what it is, but they still pay. Many big businesses don’t look to pay the right tax, the least they legally have to pay; they set up to pay no tax to anyone except small amounts to other countries. Let’s name some of these companies: Westfield; Lend Lease; the Macquarie Group; the Goodman Group; Amazon; Google; Book Depository; IKEA; the Future Fund and many more. Actions like this take people’s jobs, threaten their hospitals and health, remove their welfare and safety, and they do it for the sake of avarice.
There is currently a tendency to blame the Tax Office for not doing its job. The Australian Tax Office is one of the best in the world and blaming the ATO is like a second rate football team blaming the ref when they lose. The fact is that it is some of the leaders of commerce and industry in Australia who are doing the wrong thing. If the ATO has the resources and the proper regulation then the ATO will pursue the enemies of a healthy society and do what needs to be done. The Treasurer could do worse than to ask the Tax Commissioner what is needed to get the taxes from these companies and then give the ATO all the resources it has asked for, the return will be billions of dollars.
Finally, the argument that company tax is too high in Australia is no excuse. It might be too high (it is) but the culture of many big businesses is such that even if we dropped it to 10% they would still dodge the tax, because that is what they do, that is their culture.
Let’s get taxes paid at where companies make their profits – not elsewhere where the tax is lower. Then we will have a good functioning society and developing countries can continue to develop. (The more developed countries we have on the planet the less likely there will be extremes of government and dictatorships and the less chance of war.)
Then small business people can operate and innovate and add to productivity, jobs and wealth full in the knowledge that everyone else is doing the right thing.
It isn’t just Australia that suffers; it is probably all countries that try to manage their taxes in a professional manner. This week’s G20 needs to address this issue. Big businesses need to stop playing games and pay their share of tax. Everywhere.
Peter Strong is the chief executive of the Council of Small Business of Australia.
