Plans to privatise a database that helps prevent corporate tax evasion have been abandoned in the federal government's mid-year economic fiscal outlook.
The truth around directors and owners of companies will not be hidden behind expensive private paywalls after the government announced it would not be proceeding with the privatisation of the national corporate database.
The decision was announced this morning as part of the release of the government’s Mid-Year Economic and Fiscal Outlook (MYEFO), which showed the government’s plan to return the budget to surplus by 2020-21 is fraught with risk.
Finance Minister Matthias Cormann said in a statement “the final bids received [for the Australian Securities and Investments Commission Registry] did not deliver a net financial benefit for the Commonwealth”.
The decision to not proceed with the privatisation will save $4.5 million in 2016-17.
Final bids for control of the register were received from companies earlier this year under a government tender.
The potential privatisation has been controversial given recent examples of corporate tax evasion revealed by investigations of the Panama Papers, a trove of documents leaked from a Central American law firm that specialised in offshore tax arrangements.
The information is also used to determine which individuals exert influence across Australia's corporations.
In November, a report for a Productivity Commission inquiry noted that the value of the database was greater than what could be received in revenue.
"The potential to trigger innovative investments or opportunities for better governance are all considerations that could easily outweigh any revenue generation, even if government data sets were priced according to market forces,” the report stated.
ASIC made a submission to the Productivity Commission inquiry noting the tender.
It argued the process would have enhanced "the services, integrity, access to and collection of the Registry data for all users”.
"The government believes that the involvement of the private sector has the potential to unlock significant value within the Registry and to deliver considerable benefits to the economy,” the submission stated.
Senator Cormann said today “learnings from this process will now feed into the government’s consideration of future approaches and improvements to Government registry functions”.
The MYEFO release showed a slightly lower deficit for the Government’s budget in 2016-17, but larger deficits in the next three years driven by lower revenues as a result of slow wage growth and low corporate profits.
A surplus is still predicted by 2020-21, but it would be extremely small. In addition, the government has budgeted for $13 billion in savings that are unlikely to pass the Senate.