MP slams 'invisible' Apple for avoiding Australian tax

Summary:Australian Labor MP Ed Husic has questioned how Apple can have such high expenses cutting profits in Australia when none of its manufacturing occurs locally.

Labor MP Ed Husic has applied the blowtorch to Apple after the company reported a drop in profits in Australia and New Zealand for the last financial year, yet increased its revenues to AU$6 billion.

Last month it was revealed that Apple raked in AU$5.9 billion in revenues in Australia and New Zealand, but after increases in expenses, the company reported a drop in net profit to AU$58.4 million, meaning the company only paid AU$40 million in taxes in Australia in 2012, compared to AU$94.7 million in 2011.

In parliament today, Husic, who has long targeted tech giants such as Apple over IT pricing in Australia, questioned how Apple could have AU$5.5 billion in costs.

"How? They don't manufacture here, there are no factories here. I don't know what their R&D effort is here," he said. "They've got a growing number of retail outlets, which I'm happy about — they're creating jobs locally — but surely those outlets don't cost AU$5.5 billion to maintain?"

He said that while Apple did have a head office in Australia, the company was keen to avoid engaging with government in Australia.

"They maintain a cloak of invisibility, and their key management team dodge any scrutiny, and even refuse to engage on any public policy issues," he said.

He suggested that the costs would have come from transfer pricing arrangements between Apple Australia and the US parent company, but he said that Apple "steadfastly refuses to engage" with government about this.

The practice of sending profits offshore to a country with a lower tax rate on profits is one frequently used by many multinational corporations, and the Australian government has recently been focusing on how it can keep Australian profits in Australia. The government has cited Google as one of the major companies using this practice to avoid tax on profits in Australia.

Husic said that Google was more approachable than Apple.

"Google at least engages with government, is prepared to talk, is prepared to be a lot more open about issues," he said.

"Apple on the other hand, believes they're above scrutiny, and that is completely unacceptable."

Husic has long been a fan of Apple products, but said that his view of the company has "well and truly dimmed" following several attempts to get Apple to front the IT pricing inquiry .

"There have been well-known price disparities between the US and Australian markets Apple operates in," he said. "They're not the only culprit, but they are by far and away the most defiant, and Australian consumers have borne the brunt of price discrimination by them, and now Australian taxpayers are shouldering the burden too."

Topics: Government, Apple, Government : AU

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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