Michael West writes in The Conversation (24.4.17) about the implications for multinational corporations of a Federal Court ruling that resources company, Chevron, has failed to properly pay taxes on its Australian operations.
‘The Australian Tax Office had a superb win against Chevron in the Federal Court last week, but there is something everyone is missing, something that will turn the art of tax avoidance on its head; a game-changer for multinationals.
‘Put simply, Chevron borrowed US$2.5 billion in the US at less than 2% and on-lent it to Chevron Australia at 9%. The full bench of the Federal Court found the interest rate was too high.
‘The case of Chevron is powerful evidence that multinationals in Australia, and elsewhere, are not bodies corporate in the traditional sense but agencies or puppet regimes that act in the interests of their parent companies overseas.
‘So it is that they should be treated by the Australian Tax Office as undisclosed agency arrangements and taxed accordingly, their related party transactions rendered invalid, their massive tax deductions on related party debt disallowed.’
Want to boost the domestic gas industry? Put a price on carbon
Andrew Hopkins writes in The Conversation (24.4.17) that the current domestic gas crisis will pass. But, the author argues, if the industry wants to surpass coal and fulfil its role as a ‘transition fuel’, it should lobby for a carbon price to help it on its way.
‘Australia’s gas industry is under scrutiny from the competition watchdog after apparently failing to deliver on its pledge to bring down domestic prices and ease the east coast gas supply crisis.
‘The current domestic supply squeeze will be over soon enough. But other, longer-term factors threaten the role of gas in Australia’s energy mix.
‘Gas producers claim that gas is a vital fuel in the transition to a low-carbon economy (although not everyone agrees). But to achieve this they need to ensure that coal is replaced by gas in the generation of electricity. It is increasingly unlikely that this will happen in Australia, unless the industry can persuade the government to reinstate a price on carbon.’