Multi-national oil giant Exxon has failed to pay any company tax in Australia for several years, disguising its profits behind an opaque corporate structure that funnels money to tax havens.
An ACTU submission to the Senate Inquiry into Corporate Tax Avoidance draws on new and existing research to show the effect of the company’s alleged revenue theft on Australia’s schools, hospitals and the NDIS.
Beyond the avoidance of corporate tax, the submission reveals that Exxon pays less Petroleum Resource Rent Tax (PRRT) than its partners BHP on joint ventures in Bass Strait.
Highly conservative figures contained in the submission show that the forgone tax revenue the company funnels offshore through an opaque network of companies in the Netherlands and the Bahamas would:
- Treat 76,000 people in public hospitals
- Educate 5500 public high school students
- Support 1685 Australians with disabilities through the NDIS
Exxon’s alleged revenue theft is possibly worse than that of US company Chevron, which lost a landmark case to the tax office in 2016 over its use of holding companies and related-party transactions to avoid paying Australian company tax.
The suspected revenue theft occurs as the company attempts to drive down wages at its Esso Longford operations in Victoria.
The ACTU has launched robo-calls and advertisements in key marginal seats calling on elected representatives to make Exxon accountable for its tax affairs.
Quotes attributable to ACTU Secretary Sally McManus:
“Exxon pays no company tax despite billions in revenue, and is also finding ways to avoid paying a fair share of public royalties for the gas they extract. They’re funnelling billions away from Australian schools and hospitals and into offshore bank accounts.
“Why isn’t the Turnbull Government making it a priority to make Exxon pay their fair share of tax so all Australians benefit? Instead it is pursuing $65 billion in corporate tax cuts so even more companies pay no tax.
“If reduced company tax is supposed to drive wage increases, then workers at companies like Exxon should be seeing massive wage increases, but the opposite is occurring. Exxon is cutting working people’s wages while paying no tax. Evidently, the rate of tax a company pay doesn’t have an impact on how it treats its workers, or what they are paid.
“Cutting taxes to big business doesn’t raise pay; pay goes up when we have rules that make companies give workers their fair share of their profits. We need to change the rules so working people can win pay rises again.”