Multinational tax avoidance means Australia is missing out on $6 billion in revenue every year, a new report reveals, with 90 percent of Aussies believing harsher legislation should be introduced to stop multinational corporations avoiding paying their fair share.
The report, released by Oxfam on Thursday, shows the impact Australian companies avoiding tax have on developing countries as well as on home soil, with essential services missing out on millions of potential funding.
Oxfam Australia Chief Executive Helen Szoke told The Huffington Post Australia multinational tax avoidance in Australia is keeping money from schools and health services on home soil.
But the issue is also spilling over to our nearest neighbours.
Australian-based companies operating out of developing countries such as Papua New Guinea and Indonesia who avoid paying tax can have an impact on the development of those local economies.
"As a country domestically we're missing out. But our biggest concern is that it's costing developing countries $2.8 billion every year," Szoke said.
"If Australia chose to deal with this issue it would make a huge difference to the lives of people in Indonesia, Papua New Guinea, India and many of our aid partnerships."
Australia is Papua New Guinea's main trading partner, with Australian-based multinational corporations investing more than $11 billion in the country, according to the report. An estimated US$12 million is lost annually due to Australian-based multinational tax avoidance in the country.
The report -- based on modelling from International Monetary Fund data -- estimates over the next five years $23 million which could go to essential services in PNG will be lost due to tax avoidance, with $5.6 million ripped out of health services. This could provide 66,000 vaccinations at birth.
"Over the next five years, it's estimated that Indonesia will be deprived of around $493 million that could have gone towards education, and PNG stands to lose around $23 million in expenditure on essential services such as hospitals, schools and sanitation," Dr Szoke said.
Eighty seven percent of Australians surveyed in a poll of 1000 believe Australian companies operating in developing countries and on home soil should publicly report their earnings and tax paid in each country.
Oxfam is calling on Labor leader Bill Shorten and Prime Minister Malcolm Turnbull to voice a commitment to cracking down on multinational tax avoidance. Making multinational ownership information public and enforcing tax transparency on home soil and for Australian companies operating abroad are steps the not-for-profit is urging.
In December, the Senate passed laws -- reintroduced by the Coalition -- forcing multinational companies with a global turnover more than $1 billion to disclose financial statements with more tax details.
Szoke told HuffPost Australia the new legislation was a "step in the right direction" but more needs to be done.
"Multinationals companies should report business on country by country basis. So that it's absolutely clear what their revenue is, what profit they're making, which then allows oversight of how much can be used to help these people out of poverty."Suggest a correction