After sustained union campaigning on how tax issues affect workers across the last 4 years, the Australian government has released its budget and announced that it will force corporations to publicly report their taxes on a country by country basis.

Danny Bertossa PSI Assistant General Secretary said “this win has global significance as it is the first time a country has broken ranks and demanded that global corporations tell the public where they are hiding their money. It has set the way for other countries to follow and also to demand that the OECD release all the data it has but keeps secret. It shows that national campaigning is needed to make wins on international tax reform and that unions are well placed to lead this fight.”.

This follows four years of co-ordinated campaigning from PSI and affiliates in Australia to shape the Labor party's election manifesto and co-ordinated global action with affiliates to build the case for public country by country reporting.  The announcement appears to reflect one of the recommendations PSI made to the Australian Treasury in its recent submission on Multinational Tax integrity and enhanced tax transparency. 

A series of reports in Australia from the Centre for International Corporate Tax Accountability and Research have shown how corporate tax dodging has bled money from public services and workers including in scandal ridden aged care homes. Most recently a report exposed how Microsoft receives billions in outsourced government IT Contracts, while lodging over $2billion in profits via its Bermuda based subsidiaries where it pays little tax.

Kate Lappin, PSI Asia Pacific Regional Secretary said “Union research and campaigning has had a big impact in shifting the debate in Australia about tax. The work unions have done highlighting the tax dodging of Aged Care companies, Big Tech and other multinationals has convinced the public that corporate tax dodging affects workers as well as users of public services. Our joint work with affiliates convinced Labor politicians that ending corporate tax dodging is a vote winner."

The work in Australia has been part of a global PSI strategy to work with unions to force corporations to disclose where they pay tax and where they do not. PSI was on the technical committee that drafted new Global Reporting Initiative standards which are now widely regarded as the best benchmark for corporate tax accountability.

PSI worked with union pension funds to ensure that global investors worth over $10trillion backed these standards to ensure global corporations can’t use technical  loopholes to get out of reporting.      

So far, the OECD has adopted a set of standards that are less effective, riddled with loopholes and has refused to allow the public to see the information – making it impossible to know what corporations are up to and if governments are serious about taxing them. This was the result of fierce corporate lobbying to make the information collected much less useful in tracking where the companies were shifting their profits. Similarly, the European Union has implemented a watered-down version of Country by Country Reporting that does not include reporting on companies activities in widely accepted tax havens. PSI, EPSU and unions in Europe campaigned for the EU to do a better job – but were disappointed at the result.

The Global Labour Tax Forum held in June confirmed the international labour support for more corporate transparency; to fund cash-starved public services, fight inequality and ensure workers and their unions can see where corporate profits are being stashed so they can hold management to account and bargain for their fair share of the profits before they are hidden away in tax havens.

Bertossa said: “Public country by country reporting is an important first step in forcing corporations to pay a fairer share towards the public services we all need. It is particularly important for low- and middle-income countries who rely more heavily on corporate taxes for public revenue. We now need to make sure that the Australian standard is robust and follows the GRI standard as closely as possible - and not the OECD standard that is riddled with holes.”