A senior Treasury official has warned that Australia could be losing billions of dollars in potential revenue from global profit-shifting overseas but has admitted that Treasury does not know how much.
Rob Heferen, a Deputy Secretary at the Federal Treasury, has also defended Treasury's controversial secondment program that finds employees from Australia's big four accountancy firms working inside Treasury and advising on tax policy that directly affects their business.
Day two of the senate estimates committee on tax avoidance was held in Canberra on Thursday, with officials appearing from Treasury, the Australian Securities and Investments Commission, KPMG, Ernst and Young, and the Business Council of Australia, among others.
Treasury's Mr Heferen said the Commonwealth government should be concerned about controversial tax avoidance strategies used by corporations in Australia because the country had such a heavy reliance on corporate tax revenue.
He said Australia was at the forefront of the global push to plug loopholes in the international tax regime and had been working through the G20 and OECD to achieve that goal.
But he also admitted that Treasury did not know how much Australia was losing in potential revenue saying it was almost impossible to verify.
Labor senator Sam Dastyari asked Mr Heferen if he could put figure on the amount of money being lost from Australia from multinational tax avoidance, to which Mr Heferen replied: "We really don't know."
Mr Dastyari said an ATO report found in 2011-12 over $60 billion was moved from intra-party transfers to related entities in tax havens.
"You're saying we have no idea what this is costing us, but we know it's a lot?" Mr Dastyari said,
Mr Heferen replied that, since Australia has such a high dependence on corporate tax, "this probably matters more to us than almost any other country," Mr Heferen said.
"[But] how big an issue, putting a figure on it, we just don't know," Mr Heferen said.
Greens Leader Christine Milne asked Mr Heferen about Treasury's secondment program, saying she was concerned that employees from big accountancy firms such as KPMG were advising Treasury on laws that directly affected their own operations, and which they later advised clients on how to avoid.
"I'd have to take issue with that last bit of that ... I know that's not the case," Mr Heferen said.
"There is no circumstance under which we would have any secondee in the organisation that in any way would bring a personal or a firm-based approach to the development of tax policy.
"We have a number of secondments, we have them from the Tax Office ... [and] from professional firms ... and never have I ever heard of any occasion where there's any talk from any one that feels anything inappropriate from what those people have been done."
Mr Heferen said Treasury had roughly 24 secondments from the Australia Tax Office and seven or eight secondments from Australia's big four firms at the moment.
