The ATO’s annual name and shame event is here, and some of the big companies that paid no income tax have been duly outed. Bernard Keane’s piece yesterday did a great job of it.
But there’s so much in the data! It’s a tale of many different types of companies, as we can see in the next chart. Local arms of global behemoths, and steadfastly Australian companies. Some are in genuinely volatile industries where you make profit sometimes. Some are in steady industries where you make profit each year. And some seem to pay no tax no matter what.
Exxon Mobil’s tax affairs deserve special mention here. While other oil and gas concerns pop up in the data one year or another, the big US company’s Australian arm has managed to post a nice round zero under income tax paid for all of the last eight years the ATO has reported. It has by far the highest cumulative revenue of any Australian company while doing so. However, it is worth mentioning that in the last financial year — one not represented in the chart above but released to the stock market — they broke their duck and paid billions in tax. (We should also note the above chart covers only company income tax, not resource taxes, payroll taxes, GST, etc.)
If you make no profit, you don’t have any company income to pay tax on. The problem is that there are ways to make no profit deliberately using multinational structures. Crikey does not allege any company mentioned in this story is doing anything other than the right thing.
The recent budget promised further crackdowns on multinational tax minimisation that will raise a few hundred million dollars a year starting after July 1 2023. But as mentioned, I’m sure none of the companies I reference in this story even noticed because they simply wouldn’t ever do that.
These ATO releases also allow us a window into the financial affairs of private companies that don’t usually post their finances. For example, Aldi. We can see that Aldi is growing solidly, doubling its revenue between 2013-14 and 2020-21. It is a discounter and you’d assume it has tight margins, but the figures reveal that its taxable income (think of it as profit before tax) is almost twice as high as a proportion of revenue as Coles and Woolworths Group. They really run a tight ship.
I tried to find Private Media, owner of Crikey, on the list because I don’t mind nibbling the hand that feeds. But the list includes only companies that meet the income thresholds, and you wonderful subscribers are too few for Private Media’s entrails to be laid bare.
Here’s another interesting group. Ikea have had some high-profile tax battles and certainly aren’t huge payers to the ATO. I put Hays in — they are a recruiter — because they are underappreciated as a big business with strong margins. I once had a government job that Hays recruited me for and the entire time I was there the government paid them an enormous commission each fortnight. A surprising share of our tax dollars ends up in their pockets, and with labour markets tight I bet their phones are running hot. Nine — owner of the old Fairfax papers — is also on the chart. It is interesting because has recently paying more tax as a share of its revenue than some of the other companies on the chart.
