A report released by the Australian Tax Office reveals that 1 in 3 large corporations paid no income tax in Australia in the 2020-21 financial year.
This includes companies who benefit financially from securing government contracts.
According to the report, a company called Ignite Limited had a total income of $115.8 million but paid no income tax in the 2020-21 financial year. In the same financial year, the Austender value of Commonwealth government contracts it obtained totalled $93.2 million, or about 80% of their total income. Most of these contracts were for ICT contractors and labour hire, which we know can cost up to 62% more than APS employees.
Ignite is not alone. Other corporations such as global labour hire giants Adecco and Randstad, and consulting firms including KPMG, also benefitted from government contracts in that financial year and according to this report, paid no income tax here in Australia.
The findings from this report come only weeks after a separate report by the Centre for International Corporate Tax Accountability and Research (CICTAR) examined how Microsoft used multiple Irish subsidiaries, which were tax residents in Bermuda, to avoid their corporate income tax obligations here in Australia.
Quotes attributable to Melissa Donnelly
When the average Australian family is paying more tax than a multimillion-dollar company, you know you have a problem.
These numbers are cause for concern and reinforce the need for our government to ensure that every company that is considered for a government contract passes tax standards.
Dealing with multinational tax avoidance is a complex issue and will take time to address. However, for companies who want to profit off government contracts while also minimising or completely avoiding their tax obligations in Australia, there is action we can take much more quickly.
If a business wants a government contract, then they should have to be completely transparent and meet their tax obligations here in Australia.
