Senate inquiry into for-profit aged care providers calls for tax information to be made public

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Insight if Labour wins the Federal election: the inquiry began in May after a report by the Tax Justice Network-Australia (TJN-Aus) commissioned by the Australian Nursing and Midwifery Federation (ANMF) suggested the six largest providers – Bupa, Opal, Regis, Estia, Japara, and Allity – plus a number of smaller for-profits – had been “deploying aggressive tax avoidance strategies”.

The final report by the Senate Economics References Committee, which examined their financial and tax practices, has proved to be a ‘dud’.

The Committee concludes that it can’t conclude with any certainty that for-profit providers are engaging in improper tax or financial practices.

“The problem, however, is that the committee is also unable to conclude that they are not,” it adds.

Coalition MPs sitting on the committee have issued their own dissenting report, labelling the decision to hold the inquiry a “waste of time and public money” with a “predetermined conclusion front of mind, but not the evidence to support that conclusion.”

The Senators point out that the TJN-Aus report found that the companies in question paid corporate tax at a rate of 29.02% and 29.78% for financial years 2014–15 and 2015–16 respectively – close to the headline corporate tax rate in Australia of 30% for companies with turnover greater than $50 million – and significantly higher than our average corporate tax rate of 17%.

“Coalition Senators believe that this inquiry was a ‘Trojan horse’,” they state. “The TJN-Aus report’s ‘findings’ were used by the ANMF to advocate for mandated nurse-to-patient ratios. Any inquiry into such ratios has no place being conducted by the Senate Economics References Committee.”

However, it has made five recommendations:

  • The Royal Commission into Aged Care Quality and Safety consider the tax and financial structures of aged care providers.
  • The Government explore opportunities to better share information about quality of care across the aged care sector, to increase transparency and comparability, and support informed decision-making for consumers and their families.
  • The Australian Accounting Standards Board implement changes to apply the International Accounting Standards Board’s revised Conceptual Framework “as soon as practicable”.
  • The Government investigate options to increase the public transparency of aged care providers’ financial information held by the Department of Health.
  • The Government convert the existing voluntary Tax Transparency Code to a mandatory code for all large and medium corporations operating in Australia or adopt other strong transparency measures like the publication of data from country-by-country reporting.

Providers’ tax practices will fall within the terms of reference for the Aged Care Royal Commission. We expect to see the issue raised again when its hearings start next year.

You can download the inquiry report HERE.