Government must lift tax transparency to stem mining, oil and gas avoidance
Australia urgently needs to boost transparency requirements for mining and energy companies to ward against tax avoidance, offshore secrecy and businesses seeking unfair tax breaks, as government coffers are hit by COVID-19, new analysis has found. Ethical Partners Funds Management in partnership with Publish What You Pay Australia — a coalition of 30 anti-corruption, human rights, environmental, union and faith-based organisations — will release the new report on Monday. The research, undertaken in the three months to June 23, benchmarked the top 20 ASX-listed companies across the mining and energy sectors. It found just five — BHP, Fortescue, Rio Tinto, Iluka and Woodside Petroleum — had renounced the use of “artificial arrangements” for tax optimisation.
The research also showed just 47 per cent of companies reported to the Australian Taxation Office under the Voluntary Tax Transparency Code in the 2019 financial year, compared to 67 per cent in financial 2017. Ethical Partners’ sustainability and advocacy manager Robyn Parkin said the issue of tax and disclosure for mining and energy companies was top of mind, given the COVID-19 economic turmoil and debate about social licences. “As we’ve all seen with the budget blowout, taxation is going to be an even more important issue going forward,” she added.
“It’s more about finding the (company) leaders, and those leaders in transparency will actually give us peace of mind that there is good governance all around
“... We prefer not to get to the point of AGMs (annual general meetings) and voting — we’d prefer companies to try and be leaders in this space rather than being adversarial.”
Last week’s federal budget update forecast a 4 per cent drop in company tax take this financial year due to a slowing economy.
Ethical Partners manages about $2bn, and is part of a growing contingent of investment firms focused on environmental, social and governance screens as well as financial metrics for choosing portfolio companies.