Energy Australia is owned by a company in the infamous tax haven of the British Virgin Islands. For the fourth year on the trot, the gas and electricity behemoth paid zero income tax; that’s according to the corporate transparency data released by the Tax Office earlier this month. Michael West reports.
What makes the sly tax antics of Energy Australia even more galling is that its foreign parents, its Caribbean and Hong Kong shareholders that is, make mighty profits from the misery of their Australian energy customers.
Despite its customers being slugged with high electricity prices; despite its own sales revenue spiralling higher once again; despite another large hike in executive salaries last year, this company is nonchalantly telling the Tax Office it owes Australia not one red cent in income tax.
We will get to how they pull off this tax heist in due course.
First, to the privatisation aspect. Before electricity prices doubled over the past decade, Energy Australia used to be owned by Australians. It was the property of the governments of NSW and Victoria, state assets. Chasing a short-term buck, and urged on by investment bankers and assorted fee-hunters, politicians sold them off.
Now the profits, privatised, are washed through a tax haven in the Caribbean before ending up with the CLP Group in Hong Kong, an industrial empire controlled by the billionaire Kadoorie family, which is also known as China Light & Power Company.
And these profits are super-charged because, successive governments and regulators took their eyes off the ball and allowed the rise of three dominant “gentailers”. Energy Australia is the upshot of an acquisitions rampage, a vertically-integrated corporate monster which both generates energy (from coal mines, power plants, etc), distributes energy (poles and wires) and retails energy (bills customers).
The other two gentailers are Origin Energy and AGL. Together, these three dominate the energy market and exert an inordinate influence over prices. Unlike AGL and Origin though, which are both reasonably transparent, which trade on the ASX, are largely owned by Australian shareholders and make their accounts available, Energy Australia is secretive.
Last year, when we asked to see a set of their financial statements – being an $8 billion enterprise, a key part of the Australian economy and all that – they popped through a copy of their Hong Kong financials which barely mentioned Australia. Er, wrong accounts, thanks.
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