MaltaMedia.com

The Australian Business has reported that Australian Senator and Green Party leader Bob Brown said it was time for the Australian government to follow the lead of the Gordon Brown and Barack Obama administrations in Britain and the US and take action against tax avoidance. He still sees Malta as a tax haven despite Australian financial authorities thinking otherwise after Malta’s accession to the EU.

“There has been zero debate on this issue in my 10 years in parliament, but I sense there is an international mood (for government action) and it’s a healthy one because, to the extent that tax is avoided by companies, the ordinary taxpayer has to make up the difference,” he said.

The Australian Business reported that the Australian Senate will consider Senator Brown’s notice of motion on Wednesday, after the Future Fund’s annual report last month showed it had set up five subsidiaries in the Cayman Islands, a Caribbean tax haven.

The Greens leader said he had decided to pick up the issue of tax havens after revelations in The Australian last Monday about the Commonwealth Bank Group’s (CBA) activities in low-tax Malta, where it runs a $5 billion balance sheet.

The Australian Taxation Office (ATO) no longer considers Malta a tax haven, and CBA chief executive Ralph Norris has said that Malta, as a member of the European Union, serves as a “bona fide country of operations into Europe”.

He said: “Certainly it does have a lower tax rate, but so do places like Hong Kong, Singapore and the like, and also the offshore banking unit here in Australia.”

However, Malta was blacklisted as a tax haven earlier this year in proposed US legislation. Malta, which believes should not be on the blacklist, signed a tax treaty with the US in 2008. Malta is seeking to have the treaty ratified before the end of the year, or convince politicians to support alternative legislation with no blacklist.

Senator Brown said CBA’s structure in Malta might be sound in the eyes of the ATO, but it was still “ethically crook”. He said the major political parties would have to vote in favour or against his motion.

“If one, or both, of the major parties vote no, I will call for a division to put it on the record, and then seek an explanation from them for their positions,” he said.

“They will say `it’s a complex issue involving international law’, but we all know that tax havens should not be encouraged by any government or potential government.”