Global tech giants have come into the crosshairs of Australian banks over unfair advantages when it comes to taxes they pay locally.
A $16 billion tax bombshell has triggered a dispute between Aussie banks and Big Tech giants, with claims companies like Google, Facebook and Apple are not paying their fair share.
As the Albanese Government prepares to unveil its first federal budget targeting investors through changes to capital gains tax concessions and negative gearing in a fortnight, Australia’s peak banking body has fired the opening shot in a high-stakes tax showdown with the world’s most powerful tech companies.
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Corporate taxes paid in Australia on the left compared to their market capitalisation on the right. Source: ausbanking.org.au
In a report released Tuesday, the Australian Banking Association warned a widening “contribution gap” was driving tax and regulatory imbalances across the financial system.
It compared the $515 million combined corporate tax paid locally by the top three tech giants – Alphabet Inc. ($323m), Apple ($153m) and Meta Platforms ($39m) – with the $9.9 billion paid by Australia’s big four banks in the same period.
By comparison, Commonwealth Bank paid $3.4 billion, NAB $2.6 billion, Westpac $2.2 billion and ANZ $1.6 billion.
But the report said the gap widened dramatically when looking at scale, with the combined market capitalisation of the three tech giants sitting at around $13.1 trillion, compared to roughly $700 billion for Australia’s four major banks combined – meaning the global tech platforms are worth nearly 20 times more than Australia’s biggest banks.
Australian Banking Association CEO Simon Birmingham said banks pay more tax than any industry other than mining, with an effective tax rate of 40 per cent last year.
Mr Birmingham said global tech giants were increasingly delivering bank-like services while avoiding the same regulatory and tax obligations.
He said it was Australian banks that had built the payments system and were doing the heavy lifting in fighting financial crime.
Breakdown from The Contribution Gap by the Australian Banking Association. Source: ausbanking.org.au
The Contribution Gap report said banks had also spent billions building Australia’s digital financial infrastructure, including $2 billion on the New Payments Platform, $1.5 billion on the Consumer Data Right, and $100 million on Confirmation of Payee scam protection technology. The Consumer Data Right is an Australian government-backed system that allows people to safely share their financial data with approved third parties to access better deals and services.
The banks warn the current regulatory imbalance allowed global technology platforms and multinational payments firms to operate bank-like services in Australia without bearing proportionate responsibilities.
Mr Birmingham said the industry was simply calling for fairness.
“All we are calling for is a levelling of the playing field. These foreign multinationals need to be captured under the same regulatory umbrella as domestic banks, as well as more scrutiny applied to their local tax contributions.”
The report warned global technology platforms provide services increasingly indistinguishable from banking, yet the obligations they face are not equivalent, adding that if the gap continues to grow unchecked, funds that benefit the Australian community will be impacted.
It said large foreign multinationals generate revenue from Australia’s economy without making comparable contributions, concluding that a level playing field is essential.
The level of taxes and levies paid in Australia last year by banks. Source: ausbanking.org.au
Mr Birmingham said the sector’s $16 billion tax contribution helps fund essential services, supporting a healthier and smarter Australia as well as the employment of nearly 180,000 Australians.
Banks were also investing heavily beyond tax contributions, he said, including $2.5 billion last year in tackling financial crime and more than $700 million in community projects and disaster relief.
Yet when it came to local impact, the picture flipped again, with the three tech companies employing only around 6,000 people in Australia, compared with roughly 179,000 across the major banks – meaning banks employ about 30 times more Australians than the global tech giants combined.
That contrast was underscored in a broader calculation showing that together, tech giants worth more than $13 trillion pay just over $500 million in tax in Australia, compared with nearly $10 billion from the big four banks alone.
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