(Australian Prime Minister Kevin Rudd)
On December 1, 2012, Australia joined Russia and Mexico to form the troika of future, present and past hosts of G20 summits, signalling that country’s chairmanship of the group in 2014.
Shortly thereafter the website of the Australian Prime Minister and Cabinet announced the formation of a G20 Task force and commemorative stamp collection competition.
For those interested in the future of the G20’s international tax reform agenda, that the Aussie government has chosen to given primacy to the following in its list of the country’s key contributions to the G20 is perhaps instructive:
“Australia has a strong financial sector, with domestic banks that performed well compared to their international peers during the global economic crisis. Our effective system of financial regulation has allowed us to make a useful contribution to discussions in G20 forums aimed at improving international financial standards, such as the workshop on the ‘New Financial Landscape’ co-chaired by Australia and France in July 2011.”
Even more insightful are the recent comments by Australia’s Assistant Treasurer David Bradbury about his department’s scoping paper which concluded that “global tax settings have failed to keep pace with changes in the global economy.”
(Australia’s Assistant Treasurer David Bradbury)
Bradbury commissioned the research last November over concerns about the risks posed to the sustainability of Australia’s corporate tax base.
Australia has good reason to be concerned because with corporate tax receipts worth AUD66.6bn (USD61.7bn) in 2011-12, representing 22 percent of the total federal tax receipts and 4.5 percent of gross domestic product (GDP); the government collects more corporate tax as a share of its GDP than most other Organization of Economic Cooperation and Development (OECD) countries.
Writing in the foreword to the document about the activities of multinationals, Bradbury noted that, “Although they act within the law, they are able to take advantage of outdated international laws to reduce the taxation contribution they make to the countries in which they operate.”
Speaking at the launch of the document Bradbury expressed the view that “the deficiencies in the tax laws is beyond the scope of any one country acting alone. To move forward, governments must cooperate, and Australia is keen to ensure that by taking the chair of the G20 next year it is able to play a prominent role in “determining and driving the base erosion and profit shifting reform agenda.”
When asked to address one of the four key recommendations made in the report that Australia should consider exploring options for improving the way tax authourities work together Bradbury reminded that “the government has been a strong supporter of strengthened information exchange networks, and that Australia was set to join a pilot launched by the G5 for the multilateral automatic exchange of taxpayer information. Likewise, the Government has supported the OECD’s new Action Plan on base erosion and profit shifting.”
On the subject however of revising tax treaties to ensure that they continue to operate in the national interest – another recommendation in the report and identified by the OECD in its BEPS Action Plan – Bradbury was rather less definitive saying only that the government would consider it.
Russia hosts this year’s last meeting of the G20 from September 5-6 in St. Petersburg. As has become the custom it is expected that the Final Declaration of the heads of government attending this Summit will indicate that:
- the work of the G20 will continue under Russia’s Presidency until November 30;
- on December 1, 2013 Australia will start chairing the G20; and
- the next G20 Summit will convene in Brisbane from November 15-16,2014 , under the Chairmanship of Australia.
(President of Turkey Abdullah Gül)
No doubt the rest of the world will learn more about the ‘G20Australia’ international tax reform agenda, on December 1, 2014 when Turkey is expected to join the troika as 2015 chair.