Another outstanding effort of obfuscation by our bureaucrats.
Last estimates I asked the Revenue section of Treasury (i.e. revenue being our taxes) if they were familiar with a number of sections in our tax act that gave tax breaks to foreigners, and if they would abolish them.
I didn’t really get an answer which is pretty much par for the course nowadays.
I suspect the people who can’t provide answers earn at least $500,000.
We really need to deal with big government in this country. It’s killing us.
Economics Legislation Committee
14/02/2024
Estimates
TREASURY PORTFOLIO
Australian Charities and Not-for-profits Commission
Senator RENNICK: Hi guys, how are you going? My first question is for the Revenue Group. I want to talk about the Tax expenditures and insightsstatement. I note that there are a number of provisions that give tax breaks to foreigners, namely: section 880, which gives sovereign funds investing here in Australia, a tax break; section 128B, which, gives foreign banks a withholding tax break; and section 855, which gives foreign holdings in non-portfolio interests a capital gains tax break. These tax breaks total about $4 billion. Do you think, given that we are looking at reforming the tax act, that it’s right that these foreign entities get tax breaks that are not available to Australian entities? In particular, I refer to 128B, the public offer test, where banks don’t have to pay withholding tax. Given that they are closing branches in the regions and not upholding the banking code of conduct, should we really be giving them a tax break?
Ms D Brown : As I said to other senators, we look at the tax system broadly—we’re not going into the specifics of what we look at—but I can say that those provisions are not immediately familiar to me.
Senator RENNICK: Okay, I thought you were responsible for that. Mr Jordan, you might be familiar with the provisions, at least. I know you’re not responsible for the policy, but there are a number of policies in the tax act that give tax breaks to foreigners that aren’t available to Australian companies. I’m a bit disappointed that you didn’t know about these particular tax sections because I thought Treasury were the guys who designed the tax policy. Perhaps you can make yourself familiar with these sections of the tax act because they’re giving a tax break to foreign entities, particularly foreign banks. They are big figures in B57 and B58 of the tax expenditure statement. Some of those are very big tax expenditures. Perhaps you could come up to speed on them. Minister, I’ll ask it of you then because you’re obviously responsible for policy. Do you think we should continue to give tax breaks to foreign entities that give them a competitive advantage in the Australian economy?
Senator Gallagher: We haven’t made any changes to those, as I—
Senator RENNICK: No, they’re inherited. I’ll admit it’s been going on for decades.
Senator Gallagher: They currently operate as they have previously. It has not been our policy to change them.
Senator RENNICK: So you’re not interested in looking at removing the arbitrage between onshore and offshore profits?
Senator Gallagher: The government looks at the tax system. Obviously, the Treasurer is briefed by the Treasury around the tax system as a whole. We haven’t made any changes in relation to the ones that you raise, if that’s—
Senator RENNICK: The fact that your representative from the Revenue Group is not aware of them—I’d suggest you become aware of them, because it’s in the document. Anyway, I’ll leave that.
