Another day, another leak showing dodgy dealings in tax havens. The so-called Paradise Papers, a leak of 13.4m files from two offshore service providers, reveal tax avoidance by a plethora of moguls and multinationals. From Russian oligarchs to mining giants, celebrities to technology firms, it seems like everyone who’s anyone in the shadowy world of the super-rich has money stashed in a tax haven.

Tax havens make it frighteningly easy for firms to divert profits onto their sunny tax-free shores. Last year, reporters compiled a five-step guide, showing how to establish your own secret firm in a tax haven. The process takes 10 minutes, costs about $2,000, and guarantees anonymity. Annual fees can be steep, but the start-up process is almost trivially simple. As the reporters put it, it’s “not unlike booking an international plane ticket or an overseas hotel”.

Tax havens have been estimated to hold at least $7tn in assets, costing the global economy hundreds of billions in lost taxes every year. Cayman Islands has fewer people than Bendigo, but more foreign-owned deposits than Japan. Head to the Caymans waterfront, and amid the diving shops, you’ll find Ugland House, a building that stands as the registered office address for more than 18,000 companies. Sound fishy?

One tax expert estimates that around four-fifthsof money in offshore bank accounts is there in breach of other countries’ tax laws. Tax havens are used by drug-runners, extortionists and money-launderers. They are used to hide the proceeds of fraud, corruption and tax evasion.

While most Australians are struggling with slow wage growth, high house prices and stagnant living standards, a growing number of high net worth individuals and large corporations are using tax havens. Describing a recent batch of dodgy dealings, tax commissioner Chris Jordan said: “many of these matters involve deliberate tax evasion, often using overseas tax havens”.

But the tax havens aren’t watertight, and recent leaks have shown just what’s going on under the surface.

Last year, a massive leak from the Panama law firm Mossack Fonseca led to a global investigation. The Panama Papers named the famous and infamous, including a dozen heads of state. Iceland’s prime minister quit in response. Australia’s tax office has reportedly looked into the tax affairs of 800 Australian clients of Mossack Fonseca. Unsurprisingly, our tax office has also taken a keen interest in the Paradise Papers.

It’s good that the tax authorities are following up these new leads. But enforcement-by-leak is no way to run a modern tax system.

Rather than hoping for another exposé, we need to target tax havens directly. That’s why Bill Shorten has announced that we will shine a public light on tax havens. As Justice Louis Brandeis put it, sunlight is the best disinfectant. Labor will demand companies report use of tax havens as a material tax risk to their shareholders, and create a publicly accessible register so we know the true owners of companies.

If a company wants to tender for a major government project, it must disclose its country of tax domicile. If you are headquartered in Belize rather than Brisbane, taxpayers have a right to know. For superannuation funds, we will work with the industry to develop guidelines for tax haven investment.

A Shorten government will protect insiders who blow the whistle on tax dodging and allow them to collect part of the tax penalty as a reward. For billion-dollar corporations, we will demand that they disclose how much tax they paid around the globe. Some mining firms already do this on a voluntary basis, but we will make it compulsory.

To be a leader in tackling multinational tax avoidance, our investigators need to be properly resourced. Alas, the Coalition has slashedthousands of staff from the tax office since 2014. The Turnbull government is big on announcements, but their measures are mostly cosmetic: more Revlon than revolution.

At the same time as the Turnbull government is looking to give a multi-billion dollar tax cut to billion-dollar firms, they want to raise income taxes on average workers.

Labor disagrees on both counts. With inequality is at a 75-year high, it makes no sense to ask low-wage workers to pay more just so that multinationals can pay less.

There’s trouble in the Paradise Papers. It’s time to ask the millionaires and multinationals to dig into their Cayman Islands bank accounts and pay their fair share.

From The Guardian: