The state’s nurses union has told a parliamentary committee examining the tax practices of for-profit aged care providers that aggressive tax minimisation measures undermine the quality of residential care.
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A Senate inquiry is being held on the issue with a report due to be released mid-August.
The Economics References Committee will look at company financial and tax arrangements against impacts on service delivery and value for government money.
A report by the Tax Justice Network, released last month, showed the country’s six largest for-profit nursing home companies were given more than $2.17 billion in government subsidies and made profits of $210 each year between 2016 and 2018.
Australian Tax Office data used in the report showed one company was not taxed on its income, despite receiving $315.6 million, and the remaining five had between 1.5 to 13 per cent of its overall income subject to taxation.
Of the $9.5 billion paid by the companies, just $154 million in taxes were paid.
Australian Nursing and Midwifery Federal state secretary Emily Shepherd said the impact of tax avoidance practices on service delivery was “profound”.
“Not only is tax avoidance overt, the priority to increase profits by cutting care hours results in poor quality of care of residents simply because there are insufficient staffing levels,” she said,
“(We) have heard from many nurses and care workers leaving for profit providers due to the pressures by providers to participate in unethical practices.”
Regis is one company that operates for-profit nursing homes in Tasmania.
Chief executive Ross Johnston said Regis paid some of the highest income tax amounts out of for-profit aged care providers.
“Regis pays tax at the corporate tax rate of 30 per cent on its taxable income and fully complies with its tax obligations,” he said.
“We believe that Regis does not use any tax avoidance or aggressive tax minimisation strategies.”