At a speech on June 11, a few days ago, Joe Hockey said that Australia should be rewarding ‘lifters and not leaners’.
Presumably Glencore/Xstrata, Australia’s largest coal company, would be an ideal example of a heavy lifter, not like those welfare leaners, and particularly the young unemployed.
But not so. Michael West in the SMH on June 14, a few days ago, reported ‘Lo and behold Glencore had booked cash of almost $15 billion from coal mining in Australia in the last three years and had effectively paid zero tax’. Yes – that is right! Zero tax. Presumably Joe Hockey is proud of such a lifter.
Apparently Glencore achieved this remarkable result by borrowing billions from its parent company and other overseas entities, and paid them interest on these loans. It is a classic example of shifting profits offshore to countries with low tax rates. The result was no tax payable on coal mining in Australia.
Glencore/Xstrata has a track record in tax evasion. It was formed by Marc Rich who Michael West described as ‘the biggest tax-evader in US history’. He was charged with fraud and tax evasion. In 2001, Bill Clinton pardoned him on his last day in office.
Other Glencore executives have similar track records in tax avoidance around the world and in Australia as our Federal Court found in a recent tax decision.
In my blog of June 10 ‘Taxes and the free riders’ I described the various devices that the wealthy used to avoid taxes, e.g. self-managed super funds, moving funds offshore to avoid tax, tax havens and trusts.
It is not only Google, Apple and Westfield engaged in this tax avoidance, but we now learn that companies like Glencore/Xstrata are also shirking their responsibilities.
Not surprisingly the SMH in its editorial on June 16 said it was ‘time to get tough on profit-shifting multinationals’. Previous Labor Governments made little progress.
It is time also for Joe Hockey to get companies like Glencore/Xstrata to do some lifting instead of castigating the leaners on welfare.
Glencore/Xstrata is a classic example of corporate welfare at the expense of the Australian community.