I was talking about a nurse in a typical family in my electorate of Paterson. She knows that full-time work ensures that her family have the means to live as well as possible. She takes great pride in her home and her family and she is grateful that cheaper child care is available to her. It ensures that her kids are well looked after and they are getting the education that will ensure that they are well-adjusted and prospering human beings.
They socialise with like-minded and similar families. They have a good network of neighbours and parents, and their common goal is to ensure that their children are better off than they are. They worry, and they worry a lot. They have a big mortgage. They have a loan on their good car. The second one is old, and one day that's going to have to be replaced. Where they live, two cars is not a luxury, because there's no public transport and everywhere is far. Their credit card is under control but they do lose a bit of sleep over it from time to time.
They are managing. But if one of them got sick or lost their job or major repairs were needed or—God forbid—one of them died, then balancing their good life would be absolutely shattered. They pay a lot of tax—at least 30 per cent of their income, in fact. They don't mind. They know that there's nothing surer than death and taxes, and they're happy to pay their fair share of tax. But they find it unfathomable that multinationals are bucking and cheating the system.
They talk with their friends about their meagre tax deductions. That might put a couple of hundred to maybe a thousand or so bucks in the coffers. They talk about how unfair and how unreasonable the tax system is, when they see headlines of the big-business multinationals making millions in profit but paying next to nothing in tax. They just cannot understand it. They are bewildered—how unfair it is.
Meanwhile, they are burning the candle at both ends, trying to make those ends meet, working as hard as they can—in the mines, at the local GP surgery—and trying to get the kids to day care, trying to get them to school and sport and all the other things. They're paying their taxes. They're doing the right things. They're good citizens. They donate when something goes wrong for a work colleague who needs a hand. They donate to the Salvos if they're at the pub on a Friday night. They're good, decent Australians, paying their tax. They think it's just not fair.
They blame the government—and rightly so. For nearly a decade, those opposite, when they were in government, made some simple little gestures to appease the masses, but they actually didn't do very much at all to level out the playing field, to be frank. They quite simply didn't seem to want to. The Liberal-Nationals coalition backed in the multinationals. They wined them, they dined them—and they did nothing. They chose not to address the situation. They ignored their constituencies. They didn't listen to their local businesses or households. They worked for the multinationals, the conglomerates—intimidated by their power, fearful of their withdrawal, and mute on any sort of new ideas for how to bring them into a taxation system.
I've spent the past seven years listening to the people in my electorate, whether they're workers like the two I described earlier or whether they're small businesses—or even bigger businesses. The Albanese Labor government listens to Australia, and we've listened to the international community as well. The whole global community has had enough of these multinational companies who just don't pay their fair share in tax. More than 100 countries came together in 2021 to strike a deal on global taxation. This is important, not only for Australians but for our standing in the global community. We want to be on the good side of the ledger and on the right side of history when it comes to cracking down on tax avoidance in our world.
During the 2022 election campaign the Albanese the Labor team committed to ensuring that multinationals pay their fair share in tax. The reforms in this legislation will hold those companies to account on their corporate structures and on their tax arrangements. All the hundreds and thousands of dollars spent on corporate lawyers and accountants, creating subsidiaries and the like to hide and minimise exposure to tax, will be disclosed. The game is up. Currently there is approximately $100 billion sitting in tax havens—Australians' money. It is sitting in places like the Bahamas, the Cayman Islands and Panama. If that sound dodgy, it's because it is. But the rot stops now, and we are cracking down on it. It's just that simple.
Over the past several years only 10 Australian companies have paid one-third of the entire corporate tax bill. This is extraordinary. And it must be noted that they are all domestic companies—good local companies, doing the right thing, paying their fair share of tax, if not more. Foreign companies represent one-third of companies that pay no tax. It is just incredible. This is why the laws must be tightened so that everyone pays their fair share. Efforts to avoid and minimise tax will be monitored, managed and limited. Tricky tax planning efforts by multinational corporations, such as debt related deductions, will be addressed. This legislation helps level the playing field for Australian owned businesses, and it increases transparency. Companies will have to demonstrate that they are paying the right amount of tax as the taxation system intended.
Disclosing information is paramount to open and honest taxation revenue. Most OECD countries, such as the US, the UK and most of the EU, have already implemented earnings-based interest limitation rules. These amendments will bring Australia into line with these major economic machines—and that's a good thing. Let me also be very clear: there will be fewer than 500 companies affected by these changes. And when I say 'large companies' I mean entities with $250 million on average in revenue. All companies should be aware of their corporate structures and subsidiaries that operate through them. This is not new information that needs to be collected. It's not going to be more onerous on any of these companies. The large conglomerates already disclose this information to some degree. This amendment enhances this disclosure to capture all of the entity's subsidiaries.
A wise person once said to me, 'Be proud of your work.' Good local companies and good family businesses and PAYE taxpayers declare and contribute—it is just that simple. We all have to contribute to society via the taxation system. The local roads we drive on, the highways we need, the airport that opens the world up to us, the netball courts our kids play on, the soccer fields that more and more of our kids are going to be wanting to play on after this magnificent FIFA Women's World Cup, the water we drink, the habitat we're trying to protect—taxes pay for these things. Taxes pay for our hospitals and for our emergency services. Taxes pay for Medicare and pharmaceutical rebates. Taxes contribute to the energy we produce and use. All of these services are provided by various levels of government and are paid for with taxes.
I am proud to be part of an Albanese Government. I am proud that we made this commitment at the last election. I am proud that we're delivering on this commitment as a government. We said that multinationals would pay their fair share in tax, and this legislation is delivering on that election commitment. I'm delighted to speak on this legislation. I'm proud to be part of a government that is delivering. I'm proud to know that all of our taxes are going to be spent making Australia a better place for everyone.
