Nick Shaxson ■ The Rumble Down Under: democracy v multinationals in Australia
This is just one part of what one might call the ‘mega-capture’ of political processes, around the world, by the Big Four accountancy firms.
The AFR story concerns an ongoing Australian Senate committee hearing into corporate tax avoidance, which has seen Senate investigators trying to uncover abuses that large multinational corporations have engaged in in recent years, courtesy in large part of tax havens – notably (in Australia’s case) Singapore and to a lesser extent Switzerland.
This is an important, even landmark, story, and is reminiscent of similar inquiries in other countries which has seen corporate executives squirm for the simple reason that they have been caught doing unsavoury things. These inquiries are themselves the fruit of rising public anger by people who don’t want to see large corporates free-riding off the backs of everyone else. (For more on these issues, see 10 reasons to defend the corporate income tax.) Long may they last, and deep may they dig.
The report highlights some classic example of devious and slippery tricks being pulled by large corporates in order to try and pull the wool over the eyes of the representatives of Australian democracy. Among many other attempts at deception, a representative of mining and trading giant Glencore is quoted as saying:
“We do not consider Singapore as a tax haven.”
Oh yes it is.
Tax havens all engage in a theatre of probity that involves denying being tax havens. They have to: the world’s hot money hates a taint. They already spend considerable resources in this operation: they don’t need the representatives of large transnational corporations to do their dirty work for them.
A further detail, the AFR notes:
“Each company with the exception of News Corp admitted to being audited.”
News Corporation, and its father figure Rupert Murdoch, are originally Australian. Several years ago the journalist who wrote this AFR article, Neil Chenoweth, investigated Murdoch and News Corp., and his book was summarised in the London Review of Books:
“Chenoweth has found, looking at the accounts, that the company’s profits, declared in Australian dollars, were A$364,364,000 in 1987, A$464,464,000 in 1988, A$496,496,000 in 1989 and A$282,282,000 in 1990. The odds that such figures were a happy coincidence are 1,000,000,000,000 to one. That little grace note in the sums is accountant-speak for ‘Fuck you.’ Faced with this level of financial wizardry, all the ordinary taxpayer can do is cry ‘Bravo l’artiste!’ “
The f-word is quite appropriate for what is happening here. Free-riding, and two fingers (or the middle finger) thrust in the air in the direction of democracy.
An important story, on an important development in the world of international tax. One to watch.