Sydney - Multinationals that shift revenue around the world to pare their tax bill will be in the firing line at this weekend's meeting in Sydney of global finance chiefs, Australia's top economics minister said Friday.
Joe Hockey said that “it's really important that there be a principle that where you earn the money you pay the tax” and that the G20 finance chiefs meeting he is hosting is “where the rubber hits the road on these issues.”
Hockey warned of “intergenerational theft” if big companies were allowed to continue moving earnings to locations where they pay the least tax.
The countries represented in Sydney are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, Britain and the United States.
Emerging economy finance ministers and central bankers heading for the gathering are likely to want the unwinding of the US Federal Reserve stimulus programme to be the top agenda item for the guardians of the world's top 20 economies.
Speaking ahead of his flight to Sydney, Indonesian Finance Minister Muhamad Chatib Basri said “better communication” was needed from new Fed chief Janet Yellen over the pace of tapering the quantitative easing programme.
Quantitative easing - printing money to buy up bonds and so hold down yields - initially helped emerging economies but its gradual unwinding is roiling their markets and pressuring their currencies.
Basri said that “when we move from one equilibrium to another equilibrium it's very important to continue to communicate, to discuss the roadmap, so that we in the emerging markets can prepare.”
He said tapering was causing capital to leave the perceived riskier emerging economies as earnings in less-risky rich world markets improved.
“I think it's not just Indonesia,” he was quoted as saying by Australian national broadcaster ABC.
“Other emerging markets including India, including South Africa, including Brazil, also raised this same issue of the need for coordination.” - Sapa-dpa