Tony ‘climate change is crap’ Abbott wasn’t able to entirely keep global warming off the agenda, but did manage to reduce it to the 19th item in the communique. It’s entirely inconsequential.
As is the taxation segment, which is reproduced in full below. It is full of noble words, but totally devoid of any action, or even realistic commitment to action.
It is full of weasel words and phrases like ‘we welcome significant progress’, ‘we are committed to finalising’, ‘we endorse the global standard’, ‘we will begin to exchange information’, ‘we call on all to join us’, ‘ we welcome further collaboration’.
Read it below. It is all bullshit. Governments have known for years about transfer pricing and other tax avoidance mechanisms, which are legal only because of the lack of concerted international action.
The Australian Government, in its own piece of self-congratulatory twaddle, went even further: “At this Summit, G20 Leaders have endorsed a new global transparency standard that will leave no place for tax cheats to hide.”
If you believe that, you’ll believe anything.
“More than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017 or 2018. This will arm tax authorities around the world with the information they need to identify tax cheats and enforce the tax laws.”
Yeah, right. We will know something is happening when companies like Google and Apple actually start paying tax in Australia commensurate with their profit. Their real profit, that is, not the artificially reduced figure of what is left over when exorbitant ‘fees’ are paid to the same company’s subsidiary in low tax jurisdictions like Ireland and Luxembourg.
The Grand Duchy of Luxembourg is a tiny country sandwiched between Belgium, France and Germany. I drove through it once – it took about 15 minutes. It is about as big as the greater Sydney metropolitan area, and has a smaller population than the Gold Coast.
But it is an independent country, and a foundation member of the European Union. And its former prime minister Jean-Claude Juncker, who is the current president of the European Commission, has been exposed as the man who worked with a number of multinational corporations on sweetheart taxation deals that have saved them billions of dollars over the years.
He has gone to ground as the publicity over the rorts has grown in recent weeks, avoiding the press and public meetings. It’s not a good look, particularly when he’s Europe’s top bureaucrat.
But not to worry. The G20 is on the case. Read this and weep. It is section 13 of the G20 Brisbane Communique:
“We are taking actions to ensure the fairness of the international tax system and to secure countries’ revenue bases. Profits should be taxed where economic activities deriving the profits are performed and where value is created. We welcome the significant progress on the G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan to modernise international tax rules.
“We are committed to finalising this work in 2015, including transparency of taxpayer-specific rulings found to constitute harmful tax practices. We welcome progress being made on taxation of patent boxes. To prevent cross-border tax evasion, we endorse the global Common Reporting Standard for the automatic exchange of tax information (AEOI) on a reciprocal basis. We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures.
“We welcome financial centres’ commitments to do the same and call on all to join us. We welcome deeper engagement of developing countries in the BEPS project to address their concerns. We will work with them to build their tax administration capacity and implement AEOI. We welcome further collaboration by our tax authorities on cross-border compliance activities.”
Blah blah blah blah