The government needs to retain a package for closing down loopholes for companies like Google and Apple to shift their profits overseas and avoid domestic taxation, according to Shadow Assistant Treasurer Andrew Leigh.
Thewill look at ways member nations can share taxation information to crack down on companies that use the so-called Double Dutch Irish Sandwich method of shifting their profits to low-taxing countries such as Ireland.
The issue has been of concern in Australia for several years, with Leigh telling the Committee for Economic Development Australia State of the Nation conference this morning that the government is missing out on AU$1.1 billion in revenue today due to these loopholes.
He said the former Labor government had put in place a "significant package" to close some of the loopholes, and while the new Coalition government was pursuing the issue in principle, it had reversed some of the parts of the package in government.
He said there was a need to get an international agreement and to ensure that locally, the rules were in place to prevent companies like Google and Apple from shifting their profits.
"[The government's] case for action at a G20 level would be stronger if their domestic policy response had been a positive one rather than a negative one," he said.
"They talk the talk, but they’re walking backward in the domestic policy space."
He said the onus was on the Australian government to ensure it wasn't missing out on its revenue.
Former Victorian Premier John Brumby told the event that another easy way for state governments to improve their budget position would be to significantly lower the threshold for GST for online goods purchased overseas. He said it could be brought into line with that in the US or the UK, and said resistance to it was costing Australian states AU$1 billion per year.
"Treasury has always argued it is technologically impossible to do that, but in reality, I think that is nonsense," he said.