Multinational company tax crackdown would not reduce foreign investment, Labor says
Federal Labor has dismissed concerns that a tax crackdown on multinational companies would reduce foreign investment in Australia.
The Opposition announced measures to prevent tax avoidance that it said would reap close to $2 billion for federal coffers over four years.
However, Business Council of Australia (BCA) head Jennifer Westacott warned the policy could instead curb economic growth.
"Some of the company tax measures announced today by the federal Opposition have the potential to slow economic growth and further diminish Australia's competitiveness," she said in a statement.
The BCA is particularly concerned about Labor's proposal to tackle thin capitalisation rules, which are designed to cut profit shifting mostly by transnational companies.
"The Business Council has serious concerns that proposed changes to thin capitalisation laws risk undermining major capital and infrastructure projects and deterring investment," Ms Westacott said.
Labor's policy also includes changes to the rules guiding the classification of assets and giving the Tax Office more money to investigate multinational companies.
Opposition Leader Bill Shorten emphasised that being internationally competitive was also about being fair to Australian business.
"How can we be competitive when certain companies are gaming legal tax loopholes in Australia?" he said.
"How do we get up every morning and ask people to work hard in their small businesses in the high street of Australia - [people] who pay their taxes - and then other corporations we say to them '... don't worry' because we are not interested?"
"[How do we say] it's not our priority ... that we will leave alone multinationals?
"It isn't right that James Hardie pays less than James Smith the plumber, James the greengrocer or indeed any of the small or medium sized businesses in Australia."
Treasurer Joe Hockey said Labor's proposal was a "thought bubble" and he had received advice from Treasury that it would "cost jobs".
"That'll cost jobs. That'll cost jobs at Unilever, that'll cost jobs at Shell, that'll cost at McDonalds, that'll cost jobs at IBM, that'll cost Australian jobs," he said.
Finance Minister Mathias Cormann questioned whether Labor's talk would ever turn into action.
"All of the evidence in terms of what Labor actually does is that they don't take protecting our tax base all that seriously in practice. They just make a lot of political noise about it," he told Radio National.
