Target acquired, ammunition primed

Fairfax polling reveals voters
remain unconvinced by the budget and the Prime Minister - Labor uses one
to target the other in Monday's question time.

Multinational businesses will be able to avoid more in tax
than is being saved by many welfare tightening measures, the opposition
has claimed.

Labor's assistant treasury spokesman Andrew Leigh has
criticised the Abbott government for rolling back transparency measures
and proposing such a light touch on regulation that the revenue base
will be eroded.

Andrew Leigh.
Criticised tax regulation loopholes: Andrew Leigh. Photo: Elesa Lee

"Under Labor, we set about closing loopholes that allow
multinational companies to pay a lower rate of tax than Australian small
businesses, but much of that is now being reversed,'' he claimed.

"Since coming to office, the Abbott government has pledged to
address base erosion and profit shifting at the G20, but their only
legislative actions have been to give more than a billion dollars back
to multinationals in unnecessary tax breaks.''

The former economics professor said the government's rhetoric
about fixing a claimed ''debt and deficit disaster'' in the budget did
not stack up against its moves to reduce regulation and thus effectively
allow companies to engage in profit shifting.

He listed five measures - three from the budget and two
announced by Treasurer Joe Hockey late last year, which together amount
to revenue foregone over the budget's four-year period of more than
$1.13 billion.

They are: deferring the start date for reforms to the
offshore banking regime at a cost of $180 million; not going ahead with
changes to third party compliance reporting and data matching at a cost
of $113 million; and not proceeding with changes that would have put
so-called ''multiple entry consolidated groups'' or multinational
companies on the same tax footing as domestic companies, at a cost of
$140 million. All figures are listed in the government's Budget Paper

Two other measures announced before the budget will cost a
further $700 million in revenue. These are the closure of loopholes
allowing multinational companies to shift profits to countries where
taxes are low and costs to higher tax jurisdictions, as well as a
tightening of offshore banking rules to close further loopholes.

Announcing the latter two in November as part of a major
clean out of announced but not yet legislated initiatives of the
previous Labor government, Treasurer Joe Hockey said the changes would
provide ''certainty to business and significantly reduce red tape and
associated cost''.

The charge of soft treatment for the big end of town came as
Labor launched a coordinated parliamentary attack on the budget on
Monday directing question after question to Prime Minister Tony Abbott
claiming low income families would be up to $6000 a year worse off under
this budget.

Labor leader Bill Shorten cited NATSEM modelling which had
found a single income family with two children in school on $65,000
would be up to $ 6303.88 worse off under the welfare changes.

Mr Abbott argued such families would still receive thousands
in assistance. He said Labor had engaged in a cash-splash with borrowed
money, declaring the Coalition would not lumber future generations with
the debts of excessive spending now.

But Labor's Nick Champion said the government had taken a political risk with the cuts to pensions and entitlements.

''It's pretty hard to defend - it's aimed at Howard's
battlers and is a savage rollback of his legacy, all while they give
massive cuts to corporates and miners,'' he said.

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