Bully boy, world-wide thug and disrupter, Captain America (aka Mad King Donald) is set to end his 90-day pause on his chaotic Liberation Day tariffs - nations are bracing for what might come next. But it's his favourite billionaire 'rich-niks' that Trump intends to reward, turning the United States into a tax haven especially for them - demanding no tax payable from the countries in which they also do business, or suffer retaliation with the imposition of excessive trade tariffs.

 

Canada has already capitulated, scrapping a tax targeting US technology firms, such as Amazon, Meta, Google and Apple, in an attempt to advance stalled trade negotiations with America, brought about by the imposition of unrealistic tariffs by the Mad King. And how did the Trump administration respond to Canada backing down? In typical calm, professional and grown-up language (NOT) from the Trump administration, White House Press Secretary Karoline Leavitt declared: “It’s very simple. Prime Minister [Mark] Carney and Canada caved to President Trump and the United States of America.”

 

So how will Penny Wong fare, as she tries to navigate the erratic and irrational mind of Captain America? On Monday, Prime Minister Anthony Albanese claimed the tariffs placed on Australia “should be zero”.

2 July 2025

ALAN HAYES

 

THE question that all Australians should be asking: why has successive federal governments allowed this tax-free and nil royalty arrangement to continue?

 

Australians are missing out on schools, hospitals, housing and cost of living relief because foreign-owned gas exporters and billionaire-owned technology giants are taking us for a ride, and our governments are doing nothing about it. And while Australians are being ‘screwed’, Captain America (aka Mad King Donald) is cheering these corporations along. Why? Because most of them are US owned, such as multinational energy corporation Chevron, the traditional standard bearer for tax avoidance ‘Down Under’.

 

Like many multinationals, Chevron shifted its profits offshore by borrowing money from a Chevron entity at punishing rates of interest, then claiming that as a tax deduction.

 

And what about the big tech companies? Aided by the fact that they manufactured different components in different countries, if they manufactured anything at all, and sold their wares across the globe, it was easy to justify operating out of low-taxing destinations where profits could be shovelled. Australia became a prime and lucrative target.

 

Employing a more sophisticated strategy, which has seemed to escape our ruling politicians [dumb pills for breakfast must be the norm], the tech giants established a marketing firm in a low-taxing country, that charged related companies in other parts of the global network, such as Australia, exorbitant fees – thus avoiding tax.

 

Another preferred strategy was to establish a firm that owned the intellectual property in a tax haven, which then charged its cousins in high-taxing countries exorbitant fees for using technology derived from the US parent.

 

For years, the Australian arms of the big tech companies have been generating massive revenue streams but, when they open their accounting books, have made little or no profit in the Land of Oz - paying hardly any or no tax. In many cases, most of the money was shunted off to Ireland.

 

And while the American corporate giants salivate over their minimal or no tax regime, Captain America is determined not to change the status quo.

 

For almost twenty years the Organisation of Economic Co-operation and Development (OECD) has been diligently working on a plan to ensure multinational firms pay their fair share of tax in the countries in which they operate.  An agreement was finally ratified and secured in Singapore eighteen months ago and endorsed by the Biden administration – all multinationals would pay a minimum of 15 per cent tax.

 

Australia formally signed the proposal into legislation just before Christmas last year.

 

So, what went wrong? Enter Captain America.

 

In the flurry of executive orders, after his inauguration, Trump signed an executive order, which went largely unnoticed, announcing America's withdrawal from the OECD initiative to standardise global corporate tax rates and limit tax avoidance.

 

The domination of Musk, Bezos, Zuckerberg and Pichai over the new Trump administration had become crystal clear – a common goal of enriching themselves. Trump’s executive order was a statement about power, influence and American hegemony.

 

Less than six months in to his rule, and Mad King Donald has delivered for them in spades -  hitherto threating countries he deemed unfriendly to American corporations, including Australia, with retaliatory tariffs if they didn’t acquiesce to his plans.

 

But being the erratic and irrational ruler that he is, the Mad King, at the G7 conference last month, insisted that G7 nations - and most other countries as a result — should tear up their plans to tax American multinationals.

 

If the ‘US broligarchs’ thought Trump’s executive order last January was manna from heaven, there is little doubt that last month’s decision by G7 nations to abandon the 15 per cent minimum tax was a gift from God.

 

Members of the group of Western industrialised countries caved in to shield their own firms from Washington’s threat of retaliation.

 

Greens Economic Justice spokesperson Senator Nick McKim said, “Trump is trying to turn the US into a tax haven for his corporate mates, and we shouldn’t dance to his tune.”

 

“Labor needs to hold the line. One in three big corporations already pays zero tax in Australia. That situation cannot be allowed to become even worse.”

 

Last term, the Greens supported laws to implement part of the global minimum tax, aimed at stopping corporate giants from shifting profits offshore to dodge tax.

 

“American companies no longer being subject to global minimum tax laws could have serious budget consequences for Australia,” said McKim.

 

“Labor must use their position at the G20 to call out this move by the US and defend the principle that big corporations should pay tax where they make their profits.

 

“This is about fairness. It’s about whether governments run the country, or billionaire CEOs and the political cronies they bankroll.”

 

The G20 Summit will take place in November this year in South Africa.

 

A threat by any other name

 

Australia could tax Google, Facebook and other tech giants with a digital services tax - but don't hold your breath.

 

There is concern about antagonising the US at a delicate time when our broader trade relations are under scrutiny.

 

US Treasury Secretary Scott Bessent says he will ask for a "revenge" tax on countries that tax US tech giants.

 

Tech giants like Google, Facebook and Netflix make billions of dollars from Australian users every year. But most of those profits are not taxed here.

 

In Australia, it is estimated the five largest tech giants recorded A$15 billion in revenue in Australia last year.

 

While Australians are enthusiastic consumers of digital products, it shouldn’t mean that we, as a nation, should kowtow to the threats of Trump’s machinations, allowing Australia to become a pseudo tax haven for them.

 

Standing up to Captain America

 

Penny Wong is now in the United States ahead of the Quad foreign ministers’ meeting in Washington, where she will meet her American counterpart amid the never-ending commentary over defence spending.

 

Wong and US Secretary of State Marco Rubio will hold a one-on-one meeting as the Albanese government continues its attempts to secure an exemption from Donald Trump's tariffs. But will she stand up to the bully of the western world’s administration? Will she stand up to the erratic ‘pot’ who called the Iranian kettle ‘black’?

 

Australia’s belief that our alliance with America still contributes to the peace, prosperity and stability of our countries and the region we share is up for serious debate.

 

Trump has made it extremely clear that we can no longer rely on the US and that instead we should invest more on own military spending – just like the Virginia Class Submarines, spending more with the US on military equipment we are unlikely to ever get.

 

We all know that the Trump administration has told the Albanese government that it needs to increase its defence spending to 3.5% of GDP — something Albanese has been quick to dismiss. Meanwhile the Pentagon continues to conduct its review into the AUKUS submarine pact. Yet, despite the obvious shunt from the Trump administration, Australia still looks upon the United States as our closest ally and principal strategic partner.

 

It has also been reported that Chinese ambassador to Australia Xiao Qian has warned Albanese, who is set to visit Beijing next month, that increasing military spending would undermine economic development and impose a “heavy fiscal burden” on the budget.

 

So, will Penny Wong stand up to the bully, demanding the US drops its tariffs on Australia? Will she demand that ‘US broligarchs’ pay their fair share of tax in Australia? Will she demand that US multination energy corporations pay their fair share of tax and royalties for the gas they extract? Will she continue to echo our Prime Minister’s words that defence spending will not be increased in line with the Trump administrations demands? [The potential flashpoint for Albanese is Trump’s long-standing “America First” insistence that US allies take greater responsibility for funding their own militaries.] Or will she simply roll over and give in to the bully?

 

Wong said in advance of her leaving for the United States: “We will continue to work together to further our important economic and security partnership and advance our mutual interests.”

 

Yet while Penny Wong attempts to gain exception from Trump’s tariffs, the big risk, if she doesn’t, is higher inflation than the supply chain disruptions that drove up prices during COVID. A sobering thought for Australian businesses already paying the price of Mad King Donald’s economic plan.

 

It is already increasingly hard to see how Australia won’t eventually bite the proverbial bullet and give into Captain America’s incessant demands - genuflecting to help shore up Australia’s ties with Trump’s America – and become part of the problem, not the solution.

 

It’s time that Australia stood up to the bully and fought back. It’s time to extract a just tax from multi-nationals making obscene profits by doing business in Australia or from mining our wealth.

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