21 February 2014
Transcript - #2014003, 2014

Interview with Marius Benson, ABC News Radio

SUBJECTS: G20 Meeting

JOURNALIST:

Steve Ciobo good morning.

CIOBO:

Good morning Marius.

JOURNALIST:

You've chalked up a bit of a win even before the G20 gets underway according to the Fin Review at least because Christine Lagarde, the IMF Chief, has backed the Treasurer in declaring a specific growth target of 3.7 percent for this year. But growth targets in themselves don't do anything do they?

CIOBO:

Well I think it's important we have an ambition globally to improve growth. The key focus for G20 this weekend is to go for jobs and growth. We know that by doing so we're going to help with the process of fiscal consolidation, but also help to get people back into work. The key way we do that is by increasing economic growth globally.

JOURNALIST:

But I recall in Opposition the Coalition was always scoffing at not just targets declared by Governments, by the Labor Government, but the specific growth forecast prepared by Treasury. So the numbers really bare little relationship to the reality as a year develops.

CIOBO:

I think it's important to understand why people would say that, but it's important to look at what's flowing through in terms of the actual commitment to achieving a target. It is certainly one thing to set a target, but it's a separate thing to then see… inaudible… and not just within Australia but other G20 member nations, and to see a commitment to that. Certainly if we are able to achieve consensus across the G20 for there to a be an increase to the growth target that would be the first time that has been achieved. It also comes incumbent with that, with a commitment from all members to make sure that they implement policies that are going to help achieve that target on a global basis.

JOURNALIST:

Can I ask you about tax which is obviously a big topic and there will much discussion of ways of cooperating on tax. But while Governments, represented by the G20 ministers and the G20 central bankers, talk about cooperating globally aren't the big corporations just dancing around national tax laws? And can I give you a line from the Fin Review again, which says that Apple, the company Apple, tax liabilities in Australia fell to $36 million during its 2013 reporting year despite banking revenues of $6.1 billion for its local Australian operations; a tax rate of a tick over half of one percent.

CIOBO:

Well this is the challenge all countries face in the digital age Marius. There's no doubt that we're continuing to see, especially those that have a heavy reliance on intellectual property, on digital content, where they are able to shift jurisdictions and shift licensing agreements, especially in relation to that intellectual property across different tax jurisdictions. The challenge for G20 member nations is how we go about effectively getting uniformity in terms of both tax sharing, but also in terms of the ability to levy appropriate levels of tax on those companies that have the ability to shift intellectual property agreements between tax jurisdictions and that base erosion is a key focus that Australia brings to the table this year.

JOURNALIST:

But given the failure of national governments to date, do the large corporations like Apple have anything to fear from these G20 talks this weekend?

CIOBO:

I wouldn't use the word fear. I think that large multinational companies in various situations where they are able to shift, effectively shop different tax jurisdictions because they are able to shift the licensing regime for their intellectual property framework, which in essence is the core for many of these businesses. They should recognise that there is a growing global appetite to make sure there is a uniformity of approach across jurisdictions, the ability to share information across jurisdictions so that they should start to pay their fair share of tax.

JOURNALIST:

But this appetite for uniformity, surely the nations in fact, the large reality is that you're all competing for businesses, to host businesses, in your own nations. You're cutting each other's throats; you're pulling the rug out from each other. Say in Ireland's case, lowering corporate tax rates to 12 percent.

CIOBO:

Well, no one is afraid of competition; we think competition is a good thing; we don't want to see a change away from that. But it's one thing to say a good competitive tempo between nations to try and attract corporate business and corporate head quarters is a bad thing, and a separate thing to say that as a consequence of that we should enable corporations to continue to effectively shop around in terms of their structures that they pay next to no tax or vey very small amounts of tax by having false constructs. So that's where the real focus is, the real focus is upon making sure that globally G20 member nations are in a position where we can share that information, we can look at what is taking place, and we develop a new frame work that better represents the digital age and the ability, as I said, to level appropriate levels of tax in those jurisdictions.

JOURNALIST:

Are you losing that war at the moment?

CIOBO:

There's no doubt that globally at the moment, those companies that have the ability to shift their structure to take advantage of intellectual property arrangements are in a situation where they are able to, lets say maximize, their opportunity to retain profit. There's no doubt that numerous countries around the world aren't levying an appropriate level of tax on these companies because of this consequence. So that is the challenge, as I said there is a growing global appetite to change this.

JOURNALIST:

Are those corporations being good corporate citizens?

CIOBO:

In my view these companies are acting legitimately within the laws as the laws stand now. What we need to do, and the challenge that lay before the G20, and this is a key part of what Treasurer Hockey has focused on and a way in which Australia is leading the agenda, is to make sure we get global action on this front because this isn't a problem that only confronts Australia; it's a problem for all developed economies so that's going to the challenge that lies ahead this year. If we can achieve success on this front, and we're all optimistic we will be able to, we'll be in a situation where these companies start to pay a fair share of tax. That's going to beneficial, not just for the each of counties involved, but on a global basis also to make a difference.

JOURNALIST:

Steve Ciobo thankyou very much.

CIOBO:

Pleasure Marius.