Open your books, let the public see them, Senate investigation says senior care sector

Update

November 27, 2018 22:00:26

For-profit long-term care providers would be required to provide detailed information about their tax affairs – including a breakdown by country of the taxes they pay their taxes on – as part of appeals launched by a Senate inquiry to increase transparency and fight against tax evasion.

On Tuesday evening, the Senate Economic Reference Committee presented its report on the financial and taxation practices of elderly for-profit caregivers, whom coalition members of the coalition called the "Trojan Horse" "and" waste of time ".

Committee members learned that older child care providers were engaged in tax evasion and tax minimization and recommended that the sector be subject to more stringent transparency and reporting requirements.

The so-called tax avoidance – which was fiercely rejected by the companies themselves and was also rejected in a dissenting report by the Coalition Committee members – was detailed in a recent Tax Justice Network (TJN) report.

TJN examined the largest for-profit age facilities: Bupa, Opal, Regis, Estia, Japara and Allity.

According to the agency, these six major providers received more than $ 2.17 billion in annual grants to taxpayers and realized substantial additional operating profits, without paying $ 154 million in taxes during the 2015-2016 fiscal year.

According to coalition members, the investigation is a "waste of time"

However, the dissenting coalition report indicates that TJN has found no evidence of illegal tax evasion and that the decision to conduct this investigation was "highly irresponsible".

"Rather than constituting a fact-finding mission on the financial and fiscal practices of for-profit elderly care providers, this survey was conducted with a pre-determined conclusion, but not evidence to support this. conclusion, "says the dissenting report.

"This inquiry was a waste of time and public money.

The report follows the federal government's decision to call a royal commission on elder care after years of calling for such an investigation and a recent ABC Four Corners investigation that revealed examples of shocking abuse. towards seniors in care facilities.

The Senate inquiry recommended to the Royal Commission on the Care of the Elderly examine the tax and financial structure of elderly care providers to determine the possible impact on the quality of care received by older Australians.

He also recommended that the federal government increase public transparency of the financial information of senior care providers held by the Ministry of Health.

A mandatory tax code for businesses?

Labor Senator Jenny McAllister, who serves on the committee, said greater transparency was needed.

"Australians have the right to know the tax practices of big business," she said.

"It is essential that the public can adequately examine the financial data of for-profit providers who receive public funds."

The Committee indicated in its report that it was concerned that some providers of for-profit for-profit child care were able to use current accounting standards to mask the attention of the public on their financial activities.

He said they should be required to file detailed financial statements with the ASIC, the regulator of the companies.

He also said that it was necessary to align Australian accounting standards with international reporting standards and approved the removal of the possibility for companies to use reduced disclosure requirements.

The investigation also requested that the existing voluntary tax transparency code be converted to mandatory code for all large and medium-sized companies operating in Australia, or that it adopt other strong transparency measures, such as as the publication of data from country-by-country reports.

But coalition senators said in their dissenting report that they did not support the release of detailed business tax information.

"Senators of the coalition believe that this investigation is a" Trojan horse ", said the dissenting report.

"It was apparently an investigation into the financial and tax practices of for-profit elderly care providers, but the" findings "of the TJN-Aus report were used by the ANMF [the Australian Nursing and Midwifery Federation] advocate prescribed nurse / patient ratios. "

What about Bupa and ATO audit?

The Coalition and the companies reviewed rejected TJN's proposals, calling them "inaccurate" and "misleading", but supported the general calls for the lifting of transparency, as long as it is voluntary.

Jason Ward, a spokesperson for Tax Justice Network (Australia), told ABC News that much remains to be done to uncover the opaque tax practices of these companies.

"Obviously, a royal commission has more resources than this committee to get to the bottom of things," he said.

Bupa Aged Care was the subject of an audit by the ATO, but did not testify as part of the investigation into this case.

The company denied the allegations raised in the media of abusive tax evasion through "thin capitalization" – the practice of piling up a company on debts to minimize taxes.

"Bupa is being verified by the ATO – and we know it because it's in their ASIC documents – [in the company’s evidence to the inquiry] is pretty weird, "Ward said.

"It's a blatant omission from Bupa.

"We have provided evidence to the investigation that not only Bupa is under investigation by the ATO, but also from the Spanish tax authorities, the European Union, and the authorities. British tax authorities have also been the subject of an investigation. "

According to the ATO, the combined total income of all for-profit elderly care providers rose to just over $ 5 billion in 2015-16, with a total profit of $ 529.3 million. dollars and after-tax profit of $ 402 million.

In its communication to the Committee, the ATO expressed "concern over the funding arrangements used by some multinationals in the senior care sector", in particular the terms of their related party financing arrangements.

Topics:

business-economics-and-finance

the elderly,

tax,

federal parliament,

Australia

First posted

November 27, 2018 21:04:21