A last-minute compromise between the government and the Greens will remove the secrecy around the tax affairs of an estimated 281 private companies.
The deal, however, still leaves about 600 companies with revenue of between A$100 million and A$200 million shielded from public view.
The legislation will end an exemption for private companies with revenue of more than $200 million from having to disclose their tax affairs.
The opposition furiously denounced the Greens' action.
The issue has had a chequered history. The Labor government legislated for disclosure of the tax affairs of private companies with revenue of more than $100 million. But this had not taken effect when the Coalition came to power, which then moved to repeal the requirement.
That legislation, opposed by Labor and the Greens, was recently passed on the voices when opposition and Greens neglected to call a division. Because there was no division, it was not entirely clear whether the cross bench numbers had actually been there for it.
But then the opponents attached the disclosure provision as an amendment to government legislation to combat multinational tax avoidance. The government initially resisted but faced with losing its multinational legislation and given the Greens' flexibility, it opted for a compromise.
The multinational legislation had to be passed by Thursday – the last day of the parliamentary year – to come in on January 1 for the full 2016 year.
The government has also accepted an amendment that will force multinational corporations with global revenue of $1 billion or more to prepare “general purpose” financial statements. This was initially rejected by the government.
Greens leader Richard Di Natale hailed the deal as a “huge win for tax transparency”. He said it was “unacceptable for the government to help Australia’s most profitable companies hide their tax affairs, when we know increasing tax transparency is one of the most important ways to minimise tax avoidance”.
The Greens say companies now subject to disclosure include Transfield, Grocon, Inghams, Pratt Holdings, and Meriton.
Labor claimed that if the Greens had not “wilted like week-old kale, the government would have had no choice but to pass this bill with the transparency amendments included.
“Instead, the Greens have delivered the government the votes they need to gut tax transparency,” shadow treasurer Chris Bowen and shadow assistant treasurer Andrew Leigh said in a statement.
Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.
Authors: The Conversation Contributor