Strengthening our systems
The Government’s Budget reforms are aimed at strengthening our systems to ensure that they are fair and sustainable.
The vast majority of Australians do the right thing, and our systems are built on trust and voluntary compliance.
Around 95 per cent of our tax revenue comes from taxpayers who pay voluntarily.
Our high level of willing participation is the result of many factors — such as support in paying taxes, trust in the fairness of our system, strength of our laws and effectiveness of the Australian Tax Office (ATO).
But we know that some multinationals engage in deliberate tax avoidance, exploiting legal loopholes to pay less tax than the law intended.
Families, small businesses and other companies that are doing the right thing, paying tax on their incomes, paying GST on what they consume and charging GST on their sales, rightly expect multinationals to do the same and pay their fair share.
Through our leadership of the G20 in 2014, Australia led the charge on global action to crack down on tax avoidance by multinationals through the two-year Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan.
While this work is essential, the Government will go further and faster. This Budget will take significant steps to strengthen the integrity of our tax system.
And we will work with other countries that are taking a lead role, including the United Kingdom, to address profit shifting by multinational companies and be absolutely sure that companies earning profits pay tax in the jurisdictions where they earn the profits.
Strengthening our tax, foreign investment and welfare systems to deliver outcomes that are fair, sustainable and support future growth and prosperity.
Tax evasion and financial crime
Tax evasion and financial fraud are crimes where individuals and businesses hide income and conceal assets from authorities.
A comprehensive whole of government approach is necessary to counter tax and financial crime and protect financial markets, regulatory frameworks and revenue collection.
Strengthening our foreign investment framework
The Government is committed to strengthening Australia’s economy, creating new jobs and unlocking innovation. Foreign investment is essential to this, which is why the Government welcomes all foreign investment that is not contrary to our national interest.
A robust regulatory framework reflecting changing demands is essential to maintain community support and a welcoming investment environment. The current system has not kept pace.
The Government is strengthening the foreign investment framework to make sure the rules are enforced. This includes tougher penalties, stronger enforcement and greater transparency around agriculture and residential real estate investment.
The Government is committed to providing a fair and sustainable welfare system that provides benefits for those most in need, improves compliance and maintains integrity.
This also means investing in our welfare payment system to make sure we have a world class system to deliver services and encourage compliance.
There are a number of loopholes in our tax system that can be exploited by individuals.
For example, it is not fair that some people have unlimited use of tax concessions to subsidise weddings and cruises. Similarly, it is not fair if Australians living and working overseas do not repay their Higher Education Loan Programme debts.
Better targeted concessions will help deliver a fair and sustainable system for the future.