The markets were all over the place overnight, with US debt ceiling talks sending some investors scrambling for cover while others bought up tech stocks, bumping Alphabet (NASDAQ:GOOGL) (+1.9%) and Meta (+1.1%) higher.
In Europe, European Central Bank (ECB) policymaker Francois Villeroy de Galhau implied interest rates may peak by the end of winter, as the full impact of interest rate hikes by the ECB has yet to be felt.
The FTSEurofirst 300 fell by less than 0.1% on mixed sectors, with travel and leisure gaining 0.6% and oil, gas and mining company stocks slipping 0.4%. The UK FTSE100 lifted for the third session in a row, gaining 0.2%.
US markets were just as confused, with shares in oil and gas giant Chevron (NYSE:CVX) slipping 1.8% after it announced it would acquire PDC Energy in an all-stock transaction for US$7.6 billion, and regional banking stocks up after PacWest Bancorp (+19.6%) announced it would sell a portfolio of 74 construction loans to a subsidiary of Kennedy-Wilson Holdings (+3.3%).
The Dow fell by 0.4%, the S&P500 lifted less than 0.1% and the Nasdaq gained 0.5%.
Budget demands tax transparency
The Centre for International Corporate Tax Accountability and Research (CICTAR) has lauded “landmark legislation” laid out in the latest federal budget that will target multinational tax dodging.
The budget will introduce public country-by-country reporting (CbCR) marking a world first in corporate transparency, according to CICTAR, with global impacts that will be felt far beyond Australian borders.
Under the new public CbCR rules, any multinational company with global consolidated accounting revenue of at least A$1 billion (approximately US$650 million) will need to report key financial outcomes including earnings, profits, losses, number of staff and taxes paid (or not) for every country where they operate across the globe.
These rules would apply to multinational companies of that size regardless of whether they are headquartered in Australia or not.
“The Australian Government is showing global leadership by introducing public country-by-country reporting for multinationals,” CICTAR principal analyst Jason Ward said.
“This move will increase transparency and accountability and shine a bright light on where and how multinationals shift profits to avoid the obligation to help fund essential public services and infrastructure around the world.
“Exposure of current practices will encourage an end to abusive tax schemes everywhere.
“We are confident that the government has the votes to easily pass this landmark legislation, for implementation beginning July 1, which will begin to level the playing field for all businesses that already pay a fair share and contribute to the communities where profits are generated.”
Australia’s proposed tax reform is particularly significant in the context of the OECD’s 'Two-pillared' approach to global tax reform, offering the global south access to the same financial information a well-funded and well-connected nation like Australia is capable of collecting.
“The introduction of this legislation in Australia is a game-changer in the fight for a fairer, more transparent international tax system,” said Financial Accountability & Corporate Transparency (FACT) Coalition executive director Ian Gary.
“Understanding where multinational corporations are doing business and paying – or not paying – taxes is a vital step towards ending the era of corporate tax avoidance that has robbed governments worldwide of much-needed revenues and exacerbated global inequality.
“FACT applauds the Australian government for its leadership on this important initiative.”
In other news
On the currency front, there were mixed results against the US dollar in European and US trading. The Euro and the Aussie dollar strengthened, while the Japanese yen weakened.
Global oil prices increased by 0.5% on Monday due rising US gasoline futures and predictions of increased oil demand in the latter half of the year, while supplies from Canada and OPEC+ have been falling.
In contrast, base metal prices fell with copper futures dropping by 1.3% due to concerns over decreasing demand in China and increasing supplies in LME warehouses. Aluminium futures also slid 0.4%.