The Australian Federal government released draft legislation today that will require large multinational corporations to publicly report where they pay taxes (and therefore where they are dodging taxes) around the world. The Labor government will become the first in the world to adopt this important PSI demand.
This follows years of work by PSI and unions across the world to publicise the issue. In Australia, Unions working with PSI and CICTAR, have pressured the Labor party.
Kate Lappin PSI Asia & Pacific Regional Secretary
Union campaigns attracted significant media, won the support of workers and the public and in Australia made corporate tax avoidance an election issue.
The Australian Labor Party went into the federal election with a commitment to make corporate taxes more transparent but also to address the other issues highlighted in the campaigns, including repairing the Aged Care system and reducing outsourcing in the public service. These popular policies helped win the election.
Daniel Bertossa PSI Assistant General Secretary
This win shows that unions have a critical role in shifting national debates about tax policy. Tax was not an issue in Australia until unions put it on the agenda by explaining why tax matters to their members.
"The approach can work anywhere in the world – and now that unions know how to win we must do more," added Bertossa
With PSI and CICTAR support unions exposed the tax practices of Aged Care companies, Big Tech and companies that profit from large government contracts whilst avoiding paying taxes that fund the health, care, education, infrastructure and services we need for a prosperous and fair society.
WHY THIS MATTERS
The Australian law will have major global ramifications. It will mean we will have access to information about corporate taxes around the world. With this information we can continue to campaign to make corporations pay a fairer amount. It will be particularly important for government revenue in low income countries that rely more heavily on corporate taxes for revenue. Importantly it will now set a precedent for other countries to introduce robust standards and paves the way to normalise the practice.
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.
In 2017 PSI, with its allies, joined with the Global Reporting Initiative to develop standards that require Public Country By Country Reporting (Public CBCR), which are now widely regarded as the best benchmark for corporate tax accountability – sidelining the widely criticised OECD CBCR standards.
In 2018 and 2019 PSI and CICTAR 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.
In 2020 and 2021 PSI, EPSU and our affiliates lobbied the EU to implement the first public reporting standard – but were disappointed with the EUs final directive that watered down the standard and introduced loop holes.
PSI and CICTAR have been working with affiliates since 2018 to produce exposes to mount public pressure on governments all over the world.
The breakthrough in Australia represents the first time that a comprehensive mandatory public standard is being proposed.