Patrick questions 'not a brass razoo' in tax from government contractor

Senator Patrick said Lendlease had 1400 of its 9200 Australian staff on the $1500-a-fortnight wage subsidy. That would amount to more than $27 million in wages paid by the federal government over the six-month life of the scheme.

"It's an extraordinary state of affairs," Senator Patrick told the Senate.

"Notwithstanding the COVID-19 pandemic, Lendlease's business is proceeding apace - especially construction work for the Defence department. ...

"You've got to ask: how can a company that's receiving hundreds of millions of dollars in government contract work and pays not a cent in income tax on billions of dollars of revenue be allowed to milk taxpayers through JobKeeper? It doesn't make any sense and it's not moral. It might be legal."

A spokesperson for Lendlease said the firm was accessing JobKeeper to support jobs in parts of its company that had experienced a more than 50 per cent reduction in turnover.

"We're only accessing JobKeeper for some parts of our property business, representing about 15 per cent of our Australian workforce," the company said.

"We've offered Senator Patrick an opportunity to meet to discuss our position as well as the contribution our company, and our 9200 people, make to the Australian economy."

Senator Patrick also attacked the company's top executives, accusing chairman Michael Ullmer of "the pursuit of profit without social conscience", and saying it was difficult to see chief executive Steve McCann as a corporate exemplar, with his single achievement being to "radically minimise Lendlease's corporate tax liabilities to the point of not paying corporate tax for the last five years".

Lendlease had been awarded more than $800 million in government contracts so far this year, with less than half the year done, he said.

It had been awarded more than $1 billion in contracts since 2016, including a Parliament House construction contract for $110 million. In the five years to 2017-18 it had revenue of $43 billion and $5 billion in profit, but had paid zero tax, Senator Patrick said. Lendlease didn't expect to pay any "for some time yet" according to its own reports.

"Just why is the government comfortable in awarding $1 billion dollars of contracts to a company, Lendlease, that hasn't paid a brass razoo in corporate tax?" he asked.

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Finance Minister Mathias Cormann told him he could not discuss an individual's tax affairs, but businesses were not taxed on their revenue. He said tender decisions were made at arm's length with a "proper, rigorous tender process".

"If the suggestion in your question is that, somehow, this business you're referencing has broken the law, then I would encourage you to make relevant reports to compliance authorities, to law enforcement authorities," Senator Cormann said.

To get JobKeeper, businesses with revenue above $1 billion had to show they had lost 50 per cent of turnover in March.

Senator Patrick said Lendlease had written to him after he questioned the firm's non-payment of tax earlier this month.

The firm had told him that for the 10 years to 2014 Lendlease had paid more than $400 million in corporate tax in Australia.

"That may well be so but, in effect, Mr McCann has underlined the fact that Lendlease stopped paying corporate tax shortly after he became the CEO and managing director," Senator Patrick responded.

The firm had told him it had distributed $1.9 billion to investors in Australia over five years to 2018, who would have paid between $225 million and $325 million in tax.

"These corporate executives rarely like to have the spotlight turned on them - at least, not unless it's been directed at them by their own team of PR flunkies," Senator Patrick told the Senate.

"Business giants aren't used to seeing some political shellfire lobbed about their corporate headquarters. They don't like being named in Parliament. They're more used to politicians quietly knocking on their door and holding out a begging bowl, asking for political donations."