Follow the ABC's Peter Ryan. Analysis of global and Australian business, finance and economics.
Wednesday, October 15, 2014
Future Fund boss David Neal says RBA comments about a "violent" market correction are overstated. Unless the Fed "makes a mistake".
The head of the Future Fund has played down comments from the Reserve Bank that financial markets are heading towards a "violent correction".
The Fund's managing director David Neal says there would only be a crisis if the US Federal Reserve makes a mistake when it eventually starts moving interest rates from the current level of close to zero percent.
Mr Neal says the Fund is also paying attention to the outlook for its investments in fossil fuels and the possibility that falling demand for oil could damage traditional energy assets.
Here's my report from The World Today.
Ireland calls time on "double Irish" tax dodge; G20 leaders under greater pressure to deliver real reforms in Brisbane next month
Ireland says it will phase out a
well-worn loophole that allows multinationals to avoid paying billions of
dollars in tax.
The
avoidance scheme known as "the double Irish" is exploited by
corporate giants including Google, Apple, Facebook, Linkedin and PayPal.
The move
by Ireland comes as G20 leaders who'll meet in Brisbane next month face renewed
pressure to rein in corporate tax dodgers with consistent global reform.
The
announcement by Ireland's Finance Minister Michael Noonan comes as Ireland
begins to recover from the global financial crisis which saw it bailed out by
the European Union and the International Monetary Fund.
"I
want to make sure that the slur of the "Double Irish" is no longer
attached to Ireland's reputation. it had become something that was thrown at us
internationally" Mr Noonan said.
"There's
a big advantage I believe for Ireland to be the first mover. Our competitor
countries, if you were investing there tomorrow you would still be uncertain
about what the regime might be in two years time."
Ireland
slashed its corporate tax rate in the late 1990s to 12.5 percent to attract
investment by global companies.
But the
"double Irish" allows corporations to use complex structure where
untaxed revenues are funnelled to a subsidiary company in a tax haven like the
Cayman Islands or Bermuda.
The
loophole means multinationals end up paying very little tax or no tax at all.
Throughout
the year, G20 finance ministers have been ramping up pressure to end corporate
tax dodging so that more revenue can go into government treasury coffers.
However,
a G20 committment to reform global tax rules is reliant on individual members
such as Ireland to tighten up laws locally.
Ireland
is a participant the G20 as a member of the European Union, so the decision by
Ireland's Finance Minister Michael Noonan to end "the double Irish"
is significant.
As part
of the phased-in reforms, multinationals currently using the "double
Irish" will be able to keep exploiting it until 2020 when the loophole
will be closed.
New
participants will be blocked from minimising or avoiding tax.
However,
analysts expect tax lawyers for the corporate giants using the "double Irish"
will be working on a response and most likely new ways to minimise their
tax.
The move
to rein in multinationals poses a big risk for Ireland's soft economy as it
recovers from the financial crisis.
Around
160,000 workers are paid by the hundreds of foreign firms incorporated in
Ireland and any threat to relocate to another tax haven is an ever-present threat.
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