Hard on the heels of last year’s Panama Papers leak, which exposed massive tax evasion by the world’s fat cats, a new mass leak of documents, named the Paradise Papers, has confirmed that the flagrant looting of national treasuries by the world’s 1% continues unabated.
The leak of more than 13 million files from two offshore service providers and the company registries of 19 tax havens reveals widespread rorting. The offenders include the Queen of England, whose private estate has invested millions of pounds in the Cayman Islands; Donald Trump’s commerce secretary Wilbur Ross, who has murky dealings with Russian businessmen; Twitter and Facebook, linked with Russian state banks; and Canadian PM Justin Trudeau’s financier who funded his rise to power and has millions of dollars stashed away in the Cayman Islands.
The Paradise Papers also report that the British Conservative party’s biggest donor, Lord Ashcroft, has squirrelled away nearly half a billion dollars in an offshore trust, while Nike and Apple continue to avoid or evade tax to the tune of billions of dollars.
The giant leak also unearths examples of deep-seated corporate crookery. These include mining giant Glencore’s secret deals to secure lucrative mining rights in the Democratic Republic of the Congo.
And if all that were not enough, the mega-rich score billions of dollars in tax refunds in the Isle of Man and Malta when they buy private jets and luxury yachts.
The total sums involved are staggering. The Tax Justice Network reports global annual tax losses – money that should have been paid to tax offices – of $500 billion or more, representing more than 20 percent of corporate revenues.
Tax evasion has deadly consequences. The money has been robbed from essential services. Every dollar secreted in offshore tax havens is a dollar less for health, education and social welfare spent at home.
Government connivance
Governments are complicit in this theft because they have drafted tax codes that make it all possible. The tax evasion industry claims, with some basis, that its activities are entirely legal. Far from lurking in the shadows, the industry proudly boasts its credentials. It is populated by the bluest of blue chips – companies proudly boasting their trade with fine brass plates on the doors of their head offices, secure knowing that they and their clients will remain untouched by the courts.
And when those who advise the wealthy how to hide their money do cross the line, governments simply look the other way. Despite the enormous resources of tax offices around the world, staffed by teams of crack investigative staff armed with legal powers to inspect company books, it has been committed journalists, not the tax inspectors, who have lifted the lid on these scams.
The succession of leaks and public exposés published by the International Consortium of Investigative Journalists in recent years has pressured governments to pass legislation to limit tax evasion by multinational companies, including here in Australia in 2015.
But such laws have been weak and ineffective, in part thanks to sustained lobbying by the tax evasion industry. As the case of billionaire and US commerce secretary Wilbur Ross illustrates, those who should be acting to safeguard the public interest are sometimes direct beneficiaries of the status quo.
The real response of most governments is revealed by their determination not to send corporate crooks to jail but to cut company and personal income tax. Governments boast about how low they have pushed tax rates to lure the wealthy to park their money in their countries.
In 2016, the Irish government protested strenuously against a decision by the European Commission to force Apple to pay the government $15 billion in back taxes. Even now, the US Congress is debating president Trump’s plans to slash taxes, which would redistribute money massively to the already well off.
In Australia, the government has reduced staff in departments investigating tax evasion, making it even less likely that malfeasance will be unearthed. The whole system is stacked in favour of the rich; the politicians and the fat cats scratch each other’s backs.
Despite some huffing and puffing by governments about promoting global tax transparency, tax evasion is booming. A recent study found that 5-10 percent of the profits of US multinationals was shifted offshore for tax purposes in the 1990s. It now stands at 25 percent or more. By the very nature of the phenomenon, it is impossible to get a definite fix on the sums involved, but estimates of undeclared offshore wealth range from $8 trillion to $30 trillion, vast sums in anyone’s books.
Hypocrisy
The hypocrisy of it all is stunning. Most of us don’t get to avoid paying tax – our employers take it out of our pay before we even see it. But for the rich, an army of advisers is standing by ready to help. As British Labour leader Jeremy Corbyn pointed out in parliament, “There’s one rule for the super-rich and another for the rest when it comes to paying tax”.
For years, governments have been doling out the thin gruel of austerity. They say that “we’re all in this together” as they cut public services and the jobs, wages and pensions of millions of public sector workers. But the Paradise Papers illustrate that this is all just a cruel hoax.
Instead of sending inspectors to the fancy offices and posh private clubs in Wall Street, Pall Mall or Martin Place to root out those owing the government millions of dollars in unpaid tax, money that could fund vital services, governments have recruited armies of inspectors to harass welfare recipients and the unemployed, accompanied by frenzied media commentary about bludgers and welfare scams and scare campaigns about immigrants or refugees “ripping us off”.
Refugee women desperate for visas are walking 650km from the office of Immigration Minister Andrew Giles in Melbourne to Parliament House in Canberra.
Jacinta Nampijinpa Price could well become as synonymous with the far right as Pauline Hanson. Four weeks out from the referendum on the Voice, she cemented her position as one of Australia’s leading white supremacists with her comments at the National Press Club about how colonisation has been a wonderful thing for Aboriginal people. She railed against “separatism” (any acknowledgement that Aboriginal people are oppressed) and implored people to recognise that Aboriginal disadvantage is not due to racism but is the result of something “much closer to home”.
Dan Andrews, who has just resigned after nine years as Victorian premier, was probably the most controversial Labor leader since Gough Whitlam or indeed Jack Lang. Andrews was detested by the right as “Dictator Dan”, a man out to destroy all the “freedoms” so beloved by arch reactionaries and libertarians, such as the right of business owners to put profits above basic health measures.
A couple of weeks ago, Marcia Langton—usually one of the more conservative voices in Indigenous politics—became overnight a figure of hatred for Australia’s frothing right-wing journalists and politicians. Why? Because she said something mind-numbingly obvious about the upcoming referendum: “Every time the No cases raise their arguments, if you start pulling it apart you get down to base racism—I’m sorry to say that's where it lands—or sheer stupidity”.
Environment Minister Tanya Plibersek last week welcomed a UNESCO World Heritage Committee decision not to list the Great Barrier Reef as “in danger”. But what is “great news” to Plibersek is not great news for the reef.
Chants of “Black, Indigenous, Arab, Asian and white—unite, unite, unite to fight the right!” echoed across the streets of Sunshine West on Saturday, when 500 anti-fascist activists and local community members gathered to protest against Legacy Boxing Gym.