NFP Calls for Register of Trusts and Foundation Ownership
Friday, 21st July 2017 at 3:06 pm
Human rights advocacy group, ActionAid Australia is campaigning for an Australian register of beneficial ownership that would require rich individuals and multinational corporations to declare their trusts and foundations.
The campaign is in response to Friday’s revelation from the Australia Institute that billions of dollars of tax revenue is being lost due to wealthy Australians using family trusts.
The Australia Institute report showed that, according to ATO data, the equivalent of 21.6 per cent of Australia’s national income was run through a trust.
“The latest ATO figures show there are 823,448 trusts with assets of $3.1 trillion, and total business income of $349.2 billion,” the report said.
“People with taxable incomes of more than $500,000 account for just 0.43 per cent of the population but receive 51 per cent of all trust distributions. The 96 per cent of Australians earning under $180,000, still a high income, receive just 13 per cent of trust income.”
Interim executive director of ActionAid Australia Michelle Higelin said Australians were “sick to death of the wealthy and mega-rich dodging billions of dollars of tax, with little or no consequence”.
“These are billions of dollars that should be spent on vital public services, like hospitals, schools and public transport. It is unacceptable that those who have benefitted the most from our society are going out of their way to give the least back,” Higelin said.
“The UK and 45 other countries are currently implementing public registers of beneficial ownership to ensure their tax systems are fair and equitable. [Friday’s] news is a clear indication that a register of beneficial ownership is critical to transforming Australia’s opaque tax system that rips off the many and rewards only the wealthiest few.”
Higelin said that the Australian government was lagging behind.
“The discussion paper for public consultation, ‘Increasing Transparency of the Beneficial Ownership of Companies’, released in February 2017, ruled out action on trusts and made no mention of transparency to the public,” she said.
“This paper follows an announcement made in May 2016 that the government would explore, via public consultation, options for a beneficial ownership register for companies. That consultation continues through the Open Government Partnership National Action Plan released on 7 December 2016.
“After the Panama Papers countries around the world began moving to clean up their tax systems and bring integrity, equity and transparency back into those systems. Australia must not be left behind in this movement for justice by insisting on business as usual and hanging on to a beneficial ownership register that remains private and does not cover trusts.
Higelin said that if Australia wanted a fair and transparent tax system that complied with international obligations and delivered equitable outcomes to both the Australian community it needed a public beneficial ownership register of companies and trusts.
“Without good and strong public services, we cannot have a good and strong society. When wealthy tax-dodgers rob the public purse of billions of dollars, they rob us of our capacity to ensure the fulfilment of the community’s human rights and well-being.”
The Australian Council of Trade Unions (ACTU) has also called for reform to family trusts.
“Workers are furious about tax avoidance and who can blame them,” ACTU President Ged Kearney said.
“The government needs to genuinely act to reform the broken tax system that is worsening Australia’s already record high rate of inequality.”
“The ACTU will pursue whatever community, campaign, legislative and legal mechanisms it deems appropriate to change the rules for working people in Australia in the pursuit of equality and fairness for all Australian workers, including in the tax system.”