For 44 years Multinational Corporations have paid little or no Tax.
Corporate Australia now 90% foreign-owned.
60% of foreign-owned companies report to Taxation Office they operate at a loss!

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    For 44 years Multinational Corporations, whether owned by foreigners or by Australians, have paid little or no Income Tax*, and many of them have been pretending to be operating at a loss, by the use of transfer pricing and high interest payments, etc.   A good number are using tax havens.
   This taxation advantage has enabled the Multinationals to systematically take over Australian-owned companies, leaving the Commonwealth, State, and Territory Governments with insufficient revenue to maintain essential services, forcing governments and people to sell further assets, and escalading unemployment.
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   This is why Australians are in trouble.
   The vast majority of local and foreign multinationals pay little or no tax in Australia, according to an internal Australian Taxation Office (ATO) analysis ...
   The head of the ATO's international tax division, Mr Jim Killaly, told the Herald that in 1993-94, 60 per cent of foreign-owned and Australian multinationals claimed to be in loss and paid no tax, while the "great bulk" of the remaining 40 per cent claimed to be marginally profitable ...
   In an interview earlier this year, Mr Killaly said a "conservative" several hundred million dollars a year was being lost and that it posed a "significant risk to revenue."--- (PAUL CLEARY, Economics Correspondent, Sydney Morning Herald, October 28, 1996)
   Since Federation the Treasury had manipulated taxation to favour overseas investors, and to keep Australians poor by bestowing "naturalising status" (their code word) on foreigners, giving them tax holidays and other benefits.
   Then in 1953 the Treasury and other groups recommended the Double Taxation Agreement, which allowed multinationals to pay little or no tax on their profit. This Bill was introduced into the Commonwealth Parliament by Sir Arthur Fadden (leader of the Country Party, Deputy Prime Minister in the Menzies government).
   At the time and since the policy has been vehemently opposed by Clyde Cameron (now an A.O.), a Labor Party frontbencher, and later a Minister in the Whitlam Government. At the time the Act was publicised very little, and none of the major political parties has campaigned vigorously against it.
   The Act has progressively wiped out Australian companies, which have to pay income tax, and so are an easy prey for takeovers because they cannot compete with virtually tax-free competitors. At the same time, the Act has left insufficient tax base and volume of tax receipts to sustain the country's essential services, defence, and infrastructure.
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   The huge shortage of government revenue has, under present economic rules, almost forced the three levels of governments in Australia to sell public assets to foreigners, thus making it impossible to sensibly finance the country's future. The multinationals take some of the profits by disguising them under the "double-invoicing" system, so that on these profits even the low amounts of tax supposed to be paid in Australia under the Double Taxation Agreement are not paid.

Many companies and investors send the money overseas to tax havens.

Workers and small to medium businesspeople are lucky to be making wages, if not being forced to claim Unemployment Benefit (which succeeding governments keep renaming).

About $200 billion ($200,000,000,000) of the multinationals' profits are being taken out of Australia, almost tax-free, every year.

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To cover up the extent of the overseas invasion, the Treasury and politicians have manipulated the Australian Bureau of Statistics figures, and they have also stopped the publication of vital information.

The politicians have reversed the role of the Foreign Investment Review Board (FIRB), and further promoted the sale of Australian assets and the few remaining Australian-owned companies.

Corporate Australia is now approximately 90 percent foreign-owned.

The Financial System Inquiry (FSI) and various other Quangoes are moving fast to allow banks and moneylenders to manipulate interest rates, to allow an acceleration of the rate at which the overseas investors are divesting Australian residents of their homes, farms, and businesses.

Would this swindle have been possible if there had been a truly free News Media, with plenty of independent competition? Most of the television, radio and newspaper companies are in the hands of three major groups, thanks to a previous Federal Government changing the rules on cross-media ownership, and successive governments allowing foreigners to hold shares in media companies.

The foreign takeovers, tax-free, is economic warfare. Our politicians know the facts. So do the small numbers of Australian reformers. The Double Tax Agreement Act could be repealed--if the politicians had the will to do so.


* The original version of this article had accidentally attributed certain words to the official later quoted in this article, and there was a confusion about the date of the newspaper reference.   Corrections were made and some rewriting was done on 7 November, and other improvements were made 9 November 1997.

The SMH Economics Correspondent's article was on page 39 of October 28, 1996; an Internet version can be read at http://www.smh.com.au/daily/archive/961028/business/961028-business2.html

Do you feel like sending an e-mail message, only for display on the SYDNEY MORNING HERALD Website, about news and comment?   If so, click news@smh.com.au.   And you can browse the letters on the SMH Website by clicking http://www.smh.com.au/daily/archive.html

Further reading: "Then we were provided with a printout from the Australian Bureau of Statistics (Document No. 5506.0 [1995-96]) that further confirmed that the foreigners were paying little or no tax.
"This showed that total tax revenue stood at $115 billion, while it further confirmed little or no tax was paid by the foreigners. According to our calculations the country could not possibly survive on a tax income of $115 billion.
"(Obviously there is a great deal of tax avoidance involved, affecting this figure.) It is interesting to note that Australians paid $105 billion (91%) and the foreigners paid only $10 billion (9%). And yet they own an estimated ninety per cent of the corporate sector, which embraces almost all of the large companies in Australia."   The Great Australian Swindle Mk II -- Austand, at: http://www.gwb.com.au/gwb/news/mai/austand.html

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