Big mining and gas companies falling behind in tax transparency
Emergency aid to women in the Pacific, increased funding for responding to violence against women, ICU beds and income support. These are some of the things that our tax dollars have funded since COVID-19.
Whilst the global health crisis rages on in Australia and also in low-income countries like Papua New Guinea and South Africa, governments are relying on public spending to bring essential services to their citizens. However, tax avoidance, offshore secrecy, and government tax breaks to attract foreign investment potentially divert much needed revenue.
In 2014, Oxfam estimated that the Australian Government lost up to AUD $6 billion in revenue through ‘offshoring’ and that up to USD $2.3 billion was taken out of low-income countries through tax havens by ASX-listed multinational companies. Recently, the Publish What You Pay Australia coalition released research showing Australia’s mining, gas and oil companies are falling behind in tax and financial transparency.
Australia is a giant player in the extractive industry. There are 717 ASX-listed companies operating in 106 countries and thousands of communities globally. With COVID-19 and the climate crisis, the transparency and contribution of these projects are more important than ever, especially for the women and men living in these communities.
The new research looked at Australia’s top 20 publicly owned mining, gas and oil companies. It shows only three companies are mandated to report all their taxes, royalties and other financial payments at project and country levels. This is because BHP, Rio and South32 are also listed on the London Stock Exchange and covered under the strong laws there.
Just 11 of the top 20 companies have committed to pay tax where their mine or gas fields are located. This means some communities might be getting cheated out of the economic benefits from these projects.
Only one company, Rio Tinto, discloses any form of donations to political parties, industry associations or lobbyists. These are groups which directly influence government policy.
Consider a nurse’s average monthly salary in South Africa and Indonesia ranges from USD $680 – 1500, and that COVID-19 testing kits can cost up to USD $70. If billions of dollars worth of extractive industry revenue are taken out of low-income countries, it could literally be a matter of life and death for communities impacted by COVID-19 in these countries.
Recent polling also shows that the Australian public are becoming sick and tired of ASX-listed companies moving their funds and not paying sufficient tax in both Australia and low-income countries. For example, the polling released by Publish What You Pay shows 71% of Australians believe Australian mining, gas and oil companies should contribute more in taxes in low-income countries where they do business in response to COVID-19.
We cannot expect societies to build back better using the same old tools that have failed us in the past and transparency is the first step in tackling tax avoidance.
ActionAid Australia is a member of the PWYP coalition and proud host of the PWYP in Australia.
Original blog was published on ActionAid to view the blog click on the link below: