Tuesday, 14 May 2019 10:43

Fixing big-tech tax avoidance high on Labor agenda Featured

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Three areas of tech which the Labor Party plans to go hard on if it is elected on 18 May are the workforce, the certification of providers to government, and getting big technology firms to pay their fair share of tax.

Labor's Shadow Minister for the Digital Economy Ed Husic told iTWire that working out how to deal with big tech would be "the hottest game in town" within government.

"I think a lot of big tech have brought it on themselves and I'm genuinely worried that they are tarring the name of tech and Australian firms are getting caught up in that when they don't indulge in the same practices," he said during an interview in Melbourne on Monday.

"They're not doing the same thing in terms of taxation. They want to provide good jobs for Australians. They want to be a source of export income for the country, but they're all being lumped in with some of the big players that aren't playing ball properly or fairly. So that needs to be tackled."

He agreed that despite a lot of talk about stopping tax avoidance, companies like Google and Facebook were continuing to thumb their nose at government.

Recent figures published by The Australian show that Facebook paid less than $12 million in Australian tax in 2018 despite earning nearly $600 million in ad sales. Google posted revenue in excess of $1 billion but paid $49 million in tax.

Said Husic: "We're not prepared to accept on face value some of the licensing arrangements that are being used between the internal arms of some of the global tech players and we have announced that we would look to basically make sure we're getting our fair share by examining some of these mechanisms further.

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"I think big tech is, as I have said elsewhere, facing a day of reckoning. They've gotten too big, they've gotten too dismissive of community concerns and governments are awake now that they need to be able to reform either competition frameworks or taxation arrangements to ensure that the people are paying their fair way, that big tech is paying its way. I think the year of light regulation like taxation for tech, that's gone."

Asked about visa issues in the tech industry, after the government cancelled the 457 visa and replaced it with another category, Husic said: "Digital skills shortages have been persistent for years. I have been raising this issue for as long as I've been an MP since 2010 and it's been an issue before that as well.

"When we were in government last, I was working to try and get movement on it. We did the ICT Workforce study back in 2013 that examined what needed to be done. We had dedicated bodies to try and drive skills development to meet the needs of businesses that can't find digitally enabled staff.

"One of the first initiatives of the the incoming Coalition was to tear up those [initiatives] or basically kill off those bodies that were working on that and therefore there was no one to implement some of the thinking around dealing with skill shortages. You've seen an under-investment in skills and training by the Coalition.

"I know some people think that's partisan, but that's reality and they haven't done anything seriously about dealing with skill shortages or there's no sense of urgency about getting people on a different skills pathway to lift their skills, knowing what impact technology will have in the workplace.

"And so what a business has been forced to rely upon, they've had to try and bring people in from overseas, a completely rational decision on their part. And then, all of a sudden, the government in April 2017 decides that they're going to reform the whole 457 visa system without consulting one of the biggest users - tech.

"So they haven't invested in local skill development. They then shut off access to overseas talent. And what's the local sector supposed to do - just wither and die? So what we did is we said we would put in a specific visa which we called the SMART visa - for science, medical, academic research and technology."

Husic pointed out that he had raised the issue of Microsoft being given preferential treatment when it came to being certified for Protected cloud status which enables a company to bid for hosting top-secret Australian Government data.

"Much as I have great relationships with Microsoft and AWS and Google, my view is that if you're going to change the way in which the certification is done, it should be transparent and available to a wider group of people who are able to capably meet your expectations," he said.

Local companies should be able to get certified for government contracts if they met the specifications laid out, Husic emphasised, adding, "I cannot abide a situation where local firms have the door shut on them and they are trampled over in the rush to embrace an overseas option when we've got very capable terrific local providers."

He was also asked about the Digital Transformation Agency, its frequent changes in leadership and whether it was achieving what it was meant to. "I've been very concerned about that having watched DTA for a number of years," Husic responded. "Well, we have been very supportive and believe that digital transformation will be important, increasingly more so in the years ahead because departments will need to get their head around the application of technology to deliver services more effectively to the public, but also more efficiently for the taxpayer.

"The problem has been, I think, a lack of acceptance of accountability across the board, a tendency to just have DTA be created. I do wonder sometimes if it's an edifice only, a facade only, and there's not much substance to it, if the minute there are problems, you can't again find who's accountable and what were they actually doing to deal with some of the derailments we've experienced over a dozen different major projects that have gone off-track, digital projects under this government."

Husic said more shared accountability was needed across government to ensure digital transformation. "Building a digital literacy across senior levels of government and its ministers and the leaders of other public sector, building public sector skills capabilities is going to be really important for the government. It's part of the reason why I ruffled a few feathers earlier in the year when I said we should clamp down on digital poaching which was my way of referencing when IT vendors to government basically lure public servants with strong ICT capabilities to go and work for them, and then charge them back to us at sometimes triple the right.

"I'm happy for us to fight for improvement. You're tackling skill shortages confronting industry, but the way to solve it is not by poaching public servants. So you'll see through the course of the election, we've announced a series of measures designed to start building capability. I don't, by any stretch of the imagination, put my hands behind my head and lean back and think 'job done'. This is a big task to address the skill shortages we have, but we need to do it equally within the private and the public sectors and if we've got stronger capability in the public sector, I think we'll be able to drive digital transformation a lot more effectively as well. So I think there's a number of key objectives we need to sort out."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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