September 22, 2021

Big bills and tax havens: The business of immigration detention

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wide-manus-0-620x349By Ben Butler and Georgia Wilkins from The Sydney Morning Herald

The sacked operator of a controversial immigration detention centre at Manus Island, G4S, paid no Australian tax in 2012, Fairfax Media has learnt.

Financial reports filed with the corporate regulator show the ATO in fact paid G4S a cash refund of $2.2 million.

In the same year it paid no company tax in its home jurisdiction, the UK, according to a report from the British National Audit Office.

Until this week, G4S held a $244 million contract to run the Manus Island detention centre, which has been wracked by deadly violence.

A Fairfax Media analysis of contracts issued by the Department of Immigration also shows that:

At $900 a day, a bed at the government’s two offshore detention centres at Manus Island and Nauru costs more than a luxury suite with a harbour view at five-star Sydney hoart-808384895-620x349tel the Shangri-La (which was $590 a night on Friday).

The immigration department has given more than $5.6 billion worth of work to four contractors – G4S, Serco, Transfield and Toll Holdings – since 2003.

Toll has been paid more than $3.5 million to provide a kitchen at Manus Island since the centre re-opened in October 2012.

In its 2012 financial report, which is the most recent available, the local arm of G4S, G4S Australia Holdings, said about $775,000 of the tax refund was due to it making a loss that year.

However, the remainder was put down to ‘‘prior period over provision’’ and ‘‘recognition of previously unrecognised tax losses’’.

Asked how the tax refund arose, G4S regional managing director for the southern Pacific, Darren Boyd, said: ‘‘The Australian Tax Office determined a refund for G4S in accordance with Australian tax laws.’’

wide-manus3-620x349‘‘Our only interaction with the ATO was to lodge our tax returns.’’

The accounts show that in 2012, the local company paid its UK parent more than $4 million in fees despite declaring a loss of about $264,000.

G4S Australia is just one of a sprawling network of group subsidiaries that includes companies in tax havens the British Virgin Islands, the Cayman Islands, Jersey, Luxembourg and Guernsey.

Greg Barton, the Herb Feith Research Professor for the Study of Indonesia at Monash University, said there were ‘‘reasons to be critical of G4S and skeptical of the way it structures its business and the services they provide’’.

‘‘G4S is like many multinationals in that, because they’re so big and complex and have different parts of their business incorporated in different jurisdictions, it’s very hard to nail down what their actual costs and profits are within Australia,’’ he said.

‘‘At a time when we’re talking about job losses in the automotive industry, Qantas, and concerns in downturn in investment in mining infrastructure, it does seem strange that [the government] is putting such a large chunk of taxpayers’ money into an international firm that doesn’t even appear to be paying any tax in Australia.’’

Mr Boyd said G4S had ‘‘a small number of companies located in low tax jurisdictions but a significant proportion of these subsidiaries are normal operating or holding companies’’.

He said the company had some ‘‘residual’’ companies in tax havens.

‘‘These are typically entities which we acquired as part of an acquisition, and their existence would not materially impact the level of corporate tax paid by the group,’’ he said.


Facilities at the Manus Island Regional Processing Facility in PNG

Asylum seekers at Lombrum Naval Base, Manus Island in 2013. Photo: Angela Wylie AJW

G4s guards preventing entry to the Manus Island morgue where the body of a man allegedly beaten to death at riots in the Detention centre. Photo: Nick Moir

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