Along with the man who singly controls a larger chunk of Australia's energy assets than any other – Hong Kong billionaire Li Ka-Shing – the corporations likely to bid for the privatisation of NSW utilities share one thing in common: they are arch-exponents of aggressive tax minimisation.
Li Ka-shing and Spark Infrastructure – both big players in the Victorian and South Australian electricity markets – have been sued by the Australian Taxation Office. So avid a tax minimiser is Asia's richest man that he is now shifting his $30 billion business empire from Hong Kong to the Cayman Islands. The taxes are too high in Hong Kong apparently.
A compelling case exists, therefore, for getting the Tax Office involved in prospective privatisations. Any privatisation ought to involve a guarantee there will be no fancy trust structures, no stapled securities, and no related- party transactions with overseas entities. Simply, the order of the day should be: set up a company and pay the corporate tax rate.
In this way, Australia's energy customers and taxpayers, already reeling from a 100 per cent rise in prices in just five years, can be protected from devious structures designed to reroute profits to tax havens.
The sale of public assets to the likes of Victorian electricity providers Spark and SP Ausnet, Singapore-controlled Jemena, APA, Duet – indeed Sydney Airport – has resulted in billions in profits being siphoned abroad to investors who pay nothing near the 30 per cent corporate tax rate.
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