CSL and Optus pay millions to executives despite paying no company tax in Australia

The Guardian reports on new analysis that show some of the nation’s biggest companies – including biotechnology giant CSL, telco Optus and oil and gas producer Santos – regularly spend more on bonuses for their chief executives than they pay in company tax in Australia.

Jason Ward (CICTAR) is extensively quoted, saying that while CSL is often celebrated as an Australian biotech success, its contribution to the public purse was modest. “It’s a bit rich for the executives to get so much money when the company, which was initially a public enterprise … [doesn’t] contribute tax revenue from its profits back to its home country,”

‘Biotechnology companies can lower tax bills by holding intellectual property in low or no tax jurisdictions, which allows them to charge other parts of their businesses to access those patents, designs or processes, lowering taxable income, according to Ward’. There are also tax offsets for research and development.

The Guardian says that the findings ‘rub against an ordinary understanding of bonuses, which would typically rise when an executive helps drive a company’s performance. This in turn would lead to a bigger take from the Australian Taxation Office’.

According to the Guardians analysis, CSL, a former commonwealth entity listed on the stock exchange in the 1990s, paid Australian corporate tax just once in the past five reporting periods – amounting to about $65m – based on ATO data. During the same period, it paid $US74.3m ($114.2m), mainly consisting of bonuses, to the two chief executives running the company over that time.

The mismatch is also evident over longer time periods, with the Melbourne-headquartered company paying corporate tax on just three occasions over the past decade, during a prolonged period of high executive pay rates.

A CSL spokesperson said the company pays taxes in the jurisdictions where it makes profits, and that more than 93% of revenue is derived outside Australia.