Micah Challenge Australia Blog

 

The Micah Challenge blog is a space for discussion and debate about the issues of global poverty, faith, advocacy and justice and the Millennium Development Goals. This blog aims to provoke thought and challenge you to learn more about the issues discussed. We welcome your comments.

Micah Challenge is a global campaign of Christians speaking out against poverty and injustice. Click here to visit the Micah Challenge website.

  • Dirt in the Ground, Money in the Bank

    Posted by Jennifer

    30 July, 2013

    The continent of Africa is richly endowed in natural resources and yet suffers the highest rates of poverty in the world. In the past decade, many resource-rich African nations have enjoyed significant economic growth, which have been reflected by massive jumps in Gross Domestic Product (GDP) and per capita income. For example, in Angola, GDP grew an average of 10% annually and per capita income increased by 111% between 2000 and 2011. And yet this wealth has not been accompanied by improved wellbeing in all countries. Despite the growth in its economy, Angola has the eighth highest rate of child mortality in the world and ranks 148th on the United Nation’s Human Development Index. This highlights a massive misalignment which exists between the resource wealth and development progress being experienced in many countries in Africa. The African Progress Report 2013, published by the Africa Progress Panel, seeks to explain these discrepancies and offer potential policy solutions to redress them. So why do Africa’s citizens not enjoy the… read more

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  • Houston We Have A (Tax) Problem

    Posted by Ben

    22 July, 2013

    On Friday, the Finance Ministers of the G-20 met in Moscow to talk tax. To facilitate the discussion, the members-only club of rich countries, the Organisation for Economic Cooperation and Development (OECD), put forward its Action Plan on Base Erosion and Profit Shifting (pdf). Translated from Bureaucratese, that's an action plan to tackle aggressive tax avoidance and evasion by multinational corporations. Unfortunately, it's a plan that is good on recognising some aspects of the problem but not so good at taking a root-and-branch approach to tackling that problem. The action plan recognises that the problems caused by multinational tax avoidance are real, and they cause real harm to governments, to taxpayers, and to businesses – particularly domestic businesses who are unable or unwilling to make the same use of tax avoidance opportunities available to multinational companies. It even notes that tax avoidance by multinationals causes particular problems for developing countries as, "the lack of tax revenue leads to critical under-funding… read more

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  • Australian companies want to stamp out corruption? Then they need to stop paying bribes

    Posted by Ben

    10 July, 2013

    I wrote this blog post about Australian mining companies arguing for the continued right to pay small bribes ("facilitation payments") for the global Exposed 2013 campaign a few weeks ago. I didn't expect the same Australian mining companies to be making the same arguments in public so soon. In today's Australian Financial Review (paywalled), Bill Turner (chair of the Australia-Africa Mining Industry Group) argues that Australia should not follow the lead of Canada and the UK and close off a loophole in our bribery laws that allows companies to defend themselves against a charge of bribing a foreign official by claiming that it was merely a "facilitation payment". This defence relies on the payment being made to secure or speed up a routine service to which the payer is legally entitled, and for which the payer has kept a record of the transaction. The Australia Government has been considering, for over two years now, removing the "facilitation payments" defence from the law. An increasing number of countries don't… read more

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  • David & Goliath - Kenya vs. Karuturi Global

    Posted by Jennifer

    8 July, 2013

    Karuturi Global is one of the world’s largest suppliers of cut roses, with an annual turnover of over $100 million. It is based in India, grows flowers in India and several African countries and has recently been found guilty of tax evasion in Kenya. Earlier this year, it was discovered that Karuturi had used transfer mispricing to avoid paying USD 11 million of corporate income tax to the Kenyan Government. After shifting its profits through the low-taxing jurisdiction of Dubai by artificially adjusting prices for transactions taking place between different entities within its own multinational group, Karuturi Global Ltd was taken to court by the Kenyan Tax Revenue Authority and found to have broken Kenyan law. This case was the first time ever that an African country had successfully prosecuted a multinational company for transfer mispricing in a fully public process. In such cases, the imbalance of resources available to developing country governments compared to multinationals makes it something of a David and Goliath battle. Though in this global… read more

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