Lendlease Chair Michael Ullmer this year nabbed himself an Order of Australia for distinguished service to the performing and visual arts and to the finance and banking industry. His service to Australia’s tax coffers? Not so illustrious.
Headlines about the Order of Australia this year were dominated by the worthiness of Tony Abbott and noted air transport aficionado Bronwyn Bishop, with the political Right throwing in complaints about Mike Carlton swearing on Twitter.
However, it took a speech by South Australian Senator Rex Patrick to highlight the award to Michael Ullmer, who chairs the Lendlease board.
Outside the business pages, you are most likely to see the Lendlease name on the side of building projects. It builds everything from ports to blocks of flats, business hubs to dams.
Many of these projects are government or quasi-government jobs paid for by the taxpayer. This is where Mr Ullman’s award becomes controversial, because one place you won’t see the Lendlease name is in a list of corporate taxpayers.
Despite accepting a slew of Australian government projects – think prisons in Queensland, convention centres and sporting grounds in Adelaide, port facilities, university buildings and even parts of the National Broadband Network – Lendlease pays no corporate tax.
As Senator Patrick pointed out: “Over the last five years from 2013-14 to 2018- 19 the company generated $43 billion in revenue and in that period they didn’t pay a brass razoo in tax.”
Senator Patrick said one of Mr Ullmer’s ‘philanthropy’ projects, the Melbourne Symphony Orchestra, stood down all its musicians and put them on the taxpayer-funded JobKeeper program. This was despite the fact that they’d been negotiating to take a 50 per cent pay cut.
As we enter an economic downturn and look at paying for bail-outs such as the JobKeeper payment, it is particularly painful to think of the revenue forever denied to the country thanks to clever accounting.
Earlier this year we saw Richard Branson holding out his hands for a government bailout after years of stashing profits in places such as the Virgin Islands. In fact, according to journalist Michael West, whose website michealwest.com.au tracks tax minimisation throughout Australia, Virgin Australia Holdings Limited was the second most efficient company in the country at reducing its tax liabilities. According to Mr West’s site, the company paid exactly zero dollars in corporate tax on an eye-watering income of $23,431,281,904 over five years.
A part-time cleaner would have contributed more to the nation’s coffers.
It is important to draw a distinction between tax minimisation and tax avoidance. Most of the big companies gleefully paying little or no tax are not breaking any laws. They are taking advantage of lax laws that allow access to legal – if not exactly moral – accounting methods to minimise tax. These laws could be changed with the right political will, but we live in a bizarre world where governments and certain parts of the media demonise public servants, and laud those companies not paying their way. Even handing them Order of Australia medals.
No-one likes paying tax. But the jobs of most of our members rely on well-funded treasuries. The university sector, long overly dependent on overseas students, needs to return to the days where governments invested money in education, knowing the returns from a well-educated workforce would exceed inputs.
Australia has done well over the past 30 years, spared recessions and economic downturns. But COVID-19 has accelerated a likely recession. An increase in unemployment equals a decrease in income tax. Less spending equals lower GST revenues. All at a time when the country will need a solid tax base to pay for outlays such as the NSW Treasurer’s planned infrastructure splurge, shortfalls in education funding and the general cost of running a society.
In the past year, the public sector has done its bit. Our Champions of the State have taken on bushfires, healed the sick and showed up to staff essential services. Now it is time for the business community to do its bit by scaling back the accounting trickery and pay what’s due.
Troy Wright
Assistant General Secretary
Public Service Association of NSW