The Australian Government has a very good system of checks and balances in place for foreign investment and the operation of multinational corporations in Australia.  We need foreign investment, but it is also important to have checks and balances.

In particular, we have a foreign investment review process which applies automatically to any investment coming from a foreign owned state or company.  Secondly, we are establishing a Foreign Ownership Register for Agricultural Land so we can establish who owns what around the country.

I sit on the Government’s Revenue and Taxation Committee and it’s our job to make sure the ATO is doing everything in its power to prevent tax avoidance.  Tax avoidance is a serious issue and we know we have a significant tax gap in this country, as do many countries in the world.  Where you’ve earned a profit, you should pay tax in the country. That’s not just an essential tax principle, it is rational and fair.

Of course, most businesses do comply with our tax laws.  But there is a small proportion of large corporations that set up sophisticated arrangements to avoid Australian tax. This is patently unfair – unfair on the Australian taxpayer and unfair on local businesses that are doing the right thing.

Finally, this is also a global problem and one that is being tackled through the G20.

The G20 is on track to deliver on the two-year Base Erosion and Profit Shifting (BEPS) Action Plan to address tax avoidance.  All G20 and OECD members, representing 44 countries and around 90 per cent of the world economy, are committed to the Action Plan reforms which will bring international tax rules into the 21st century.

These reforms will restore the integrity of tax bases and ensure individuals and small businesses do not carry the tax burden unfairly. They will also ensure countries receive the taxes they are due; revenue which can then be used to provide infrastructure and services to benefit their citizens.

At the most recent G20 Summit held in Brisbane, G20 Leaders endorsed a new global transparency standard that will leave no place for tax cheats to hide.  More than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017 or 2018.  This will arm tax authorities around the world with the information they need to identify tax cheats and enforce the tax laws.

The G20 is working with low-income and other developing countries to ensure they are involved with and benefit from the G20’s tax agenda. The next stage of the BEPS project will see developing countries engaged in developing solutions.  Australia will do its part by assisting the Philippines to implement the automatic exchange of tax information as part of the fight against tax cheats.

Leadership by the G20 on this important issue is having an immediate effect. The OECD estimates that information exchange arrangements have already yielded A$53 billion dollars of revenue in around 20 OECD and G20 countries through increased voluntary disclosures by taxpayers.