23 May 2015

How McDonald's dodged half a billion dollars in Australian tax


In 2013 McDonald's Australia reported that it earned $A154.5 million in service fees from franchisees. In 2013 McDonald's Australia reported that it earned $A154.5 million in service fees from franchisees. Photo: Bloomberg
International fast-food giant McDonald's avoided paying half a billion dollars of tax in Australia over a five-year period by shifting profits through the low-tax nation of Singapore, a new report by a global coalition of trade unions says.

The report, which has been funded and commissioned by a coalition of global trade unions including the Public Services International (PSI) – of which the Community and Public Sector Union is a member -  the International Union of Foodworkers (IUF) and the Service Employees International Union (SEIU) – looks at how McDonald's has used "aggressive" tax strategies to avoid billions of dollars in taxes every year.
Something is wrong when we can put a man on the moon but 40 years later can't tax a hamburger. 
Public Service International General Secretary, Rosa Pavanelli
The report, Golden Dodges: How McDonald's Avoids Paying Its Fair Share of Tax, does not allege illegal behaviour by the company, which is among several multinationals that have been taking advantage of loopholes in current laws.

McDonald's generates much of its revenue from royalty payments from franchisees rather than through direct operation of stores.
McDonald's generates much of its revenue from royalty payments from franchisees rather than through direct operation of stores. Photo: Bloomberg
It analysed McDonald's financial accounts and said the company was "well-positioned to take advantage of the international loopholes and mismatched tax regimes that allow companies to pay very low tax rates on royalty income".

"McDonald's uses royalty payments from franchisees and foreign subsidiaries in major markets to route profits to tax havens," the report states. "These strategies may have allowed it to avoid up to $US1.8 billion in tax in those markets in the years between 2009 and 2013, including €1 billion across Europe and $A497 million in Australia."

A spokeswoman for McDonald's said: "We have always been committed to paying our fair share of tax in Australia. In fact, over the past five years, McDonald's Australia has paid in excess of $500 million in tax."

McDonald's has 36,000 stores serving approximately 69 million customers a day globally. McDonald's has 36,000 stores serving approximately 69 million customers a day globally. Photo: AP
But the report suggests the company's Australian operations show an "unusually high level of inter-company payments over the five years" had gone to the low-tax nation of Singapore.

"These payments may shift profits out of Australia to a subsidiary in Singapore, thereby reducing McDonald's tax bill significantly," the report said.

In Australia, where McDonald's has 943 stores and employs 90,000 workers, the report said 80 per cent of these stores were operated by franchisees.

In 2013 McDonald's Australia reported that it earned $A154.5 million in service fees from franchisees.

That same year, the Australian Tax Office investigated McDonald's and its franchisees regarding the tax treatment of the sale of franchises.

The report said that McDonald's charges its Australian subsidiary a royalty of above five per cent of sales from its own corporate stores.

The five per cent rate is McDonald's standard royalty payment globally. But the report said McDonald's Australia reported paying service fees of $A376.6 million to McDonald's Asia-Pacific in 2013, which is equivalent to more than nine per cent of "system-wide sales". 

"In fact in each of the past five years, McDonald's Australia Ltd has reported nearly twice as much in outgoing service fee payments as would be explained by the royalties the company receives from franchisees plus any royalty paid on behalf of corporate stores."

It said since rent was a separate line item in its reports, "there is no known explanation for these payments other than an inflated service fee that serves as a distribution of profit out of Australia."

It said given that it was above the standard five per cent rate, "it is appropriate to question whether these fees may not be based on appropriate 'arms length' conditions and breached Australia's anti-avoidance laws. In the federal budget Treasurer Joe Hockey announced he was beefing up these laws to go after 30 companies with more than $1 billion or more annual turnover.

"The payment of these service fees significantly reduces McDonald's Australia's taxable income," the report said. "In 2013 alone, this strategy may have reduced McDonald's Australia's tax bill by more than half."

"As such, the tax owed by McDonald's Australia on all service fees paid offshore in the years between 2009 and 2013 could be as high as $A497.1 million." In addition to collecting unpaid tax, the ATO could hit the company with millions more in penalties.

Through its franchising model McDonald's generates much of its revenue from royalty payments from franchisees rather than through direct operation of stores, the report said.

McDonald's franchisees pay royalties to the company – generally through a country-level subsidiary – in exchange for the right to use McDonald's intellectual property, including both the brand itself and the business methods used to establish the brand and sell its products.

The report said globally, more than 80 percent of McDonald's stores are operated by franchisees and the company's profit margin on franchise revenues was 81.7 per cent - more than five times as high as its 15.9 per cent margin for corporate store operations.

"From the perspective of franchisees, tax strategies which siphon profits from McDonald's operating markets to tax havens may limit the ability of the company to reinvest in its stores and support franchisee success," the report said.

"McDonald's workers, who are paid such low wages that they must rely on public benefits to make ends meet, might reasonably ask whether the money that the company holds in tax havens might be better used to invest in its employees."

The report said McDonald's has 36,000 stores serving approximately 69 million customers a day globally. In 2014, it had $US87.8 billion in system-wide sales, nearly twice the sales of its largest competitor. It is not only the world's largest fast food company but also the largest franchiser.

CPSU Assistant National Secretary Michael Tull said:  "Companies such as McDonald's are mocking their workforce when they argue low wages are needed to be competitive but cream off billions in profits in tax havens".

Public Service International General Secretary, Rosa Pavanelli said: "Something is wrong when we can put a man on the moon but 40 years later can't tax a hamburger. With inequality rising working people will no longer accept cuts to services when politicians allow scandalous levels of tax avoidance by the wealthiest on the planet."

Tax Justice Network spokesman Mark Zirnsak said while the Abbott government was making progress by signing up to the OECD's country-by-country reporting plan, there should be laws that state if one country gives sweetheart tax deals, then it has to immediately notify the other.

The report said McDonald's owns 42 subsidiaries and branches in "tax havens" or low-tax nations, above the 11 tax haven subsidiaries the company publicly disclosed in 2014.

"More importantly, McDonald's has large cash holdings in these subsidiaries, including over $US1.9 billion in the tiny state of Luxembourg," the report said.

Between 2009 and 2013, its Luxembourg-based structure, which employs 13 people, registered a cumulative revenue of €3.7 billion, on which it reported a meagre €16 million in tax.

 smh.com.au 20 May 2015

The Australian 'authorities' have allowed McDonald's to get way without paying the tax amount.

This is how the corporate criminals are actually supported by Australia's 'government' (with loopholes) which is factually a corporation conglomerate working solely for the benefit of 'corporations' and NOT the people they are supposed to represent.

Australian Federal Police and other government agencies exposed to hackers in Telstra security breach

Security breach ... Telstra today revealed a security flaw in its company Pacnet exposed
Security breach ... Telstra today revealed a security flaw in its company Pacnet exposed information from thousands of business and government agencies, including the Australian Federal Police. Photo: AFP PHOTO/Torsten BLACKWOOD Source: AFP
AUSTRALIAN law enforcement and government agency accounts were exposed to hackers in a security breach at a Telstra-owned company earlier this year, it revealed today. 

The Australian Federal Police and other government agencies, along with thousands of small and medium-sized businesses, are among those that could be affected by the security lapse at data services provider Pacnet.

Telstra global enterprise services group executive Brendon Riley revealed the security breach this afternoon, saying it occurred while Telstra was buying the company and Telstra was only informed of the security problem when it finalised the $857 million deal on April 16.

Mr Riley said there was “no evidence that data has been taken” but the company is informing customers and the public “because of the nature of the breach”.

Data exposed ... The Australian Federal Police were one of thousands of Pacnet customers
Data exposed ... The Australian Federal Police were one of thousands of Pacnet customers whose data was exposed to hackers. Source: News Corp Australia
“We have had no contact from the perpetrators so we don’t know the reason behind it,” Mr Riley said.

“We don’t have any evidence (of Chinese government involvement). We don’t know the source of it and that’s really not our focus.”

The security vulnerability in a web application server gave third parties complete access to Pacnet’s corporate network, including email and administration systems.

The flaw could have allowed hackers to change, delete or download information from Pacnet’s databases and was only closed on April 3.

Telstra chief information security officer Mike Burgess said “it’s clear they had complete access to the corporate network” though there is currently no evidence of information being stolen.

Security failure ... Telstra-owned company Pacnet revealed the data flaw to Telstra on Ap
Security failure ... Telstra-owned company Pacnet revealed the data flaw to Telstra on April 16. Source: News Corp Australia
Mr Riley would not speculate on the type of information that could have been taken or changed and declined to list Australian government agencies or companies affected by the security flaw other than the Federal Police.

This evening the AFP issued a statement confirming it had been contacted by Telstra and had “assessed that no secure or classified material has been compromised” as a result of the breach, though it would “continue to engage with its service providers and partner agencies on this matter”.

Mr Riley admitted it would have been “better” to reveal the issue earlier.

“It wasn’t an environment that was completely familiar to us,” he said. “We wanted to get in and understand the situation and make sure we’d taken all the rectification steps we’ve undertaken. If we could have done it faster I think it would have been better to do it faster.”

Pacnet is not connected to Telstra’s network.

news.com.au 20 May 2015

'Normally' what happens when a site or company is hacked, information gets taken and used for whatever purpose at a later point in time.

According to the Australian Federal Police, when their security has been compromised and they've been 'hacked', apparently "no evidence that data has been taken" is the official word.

What a load of lies.

Data HAS been taken, but since the Australian Federal Police LIE, they can tell the 'serfs' whatever they want, WITHOUT any repercussions.

Another lie brought to you by the AFP.

See article:

Sacked AFP officer: 'We lie to members of the community on a daily basis'

22 May 2015

Charge sheet and summons against Victoria's sheriff Brendan Facey

In Victoria Australia, there is a person that claims to be a 'sheriff', see illustration below.

He (Brendan Facey) is also a Director of a company called IMES (Infringement Management & Enforcement Services), something you really cannot be if you are an 'officer' of the Supreme Court of Victoria, with the issue of the oath put aside... for now.

In order to perpetuate the FRAUD, he apparently has approximately another 100 minions running / driving around the state of Victoria, UNLAWFULLY clamping automobiles.

Here is a scan of a document called a 'Charge Sheet and Summons' with Brendan Facey's name on it.

You can also download a more up to date version to lay criminal charges against people who have broken the law*, at:


*The validity of law in Victoria, Australia is put aside.

20 May 2015

Centrelink leaves 26 million calls unanswered

Nearly half of the 57 million phone calls made to Centrelink last year went unanswered.
Nearly half of the 57 million phone calls made to Centrelink last year went unanswered. Photo: Bradley Kanaris
Nearly half of the 57 million phone calls made to Centrelink last year went unanswered, according to a new report by the Australian National Audit Office.

About 13.7 million calls did not even make it into the system after they were blocked or received a "busy signal".

Another estimated 12.9 million were simply "abandoned" as the callers tired of waiting to speak to an operator, the audit of the Department of Human Services' "SmartCentres" found.

Lengthy waits for Centrelink telephones to be answered is the No.1 complaint against the welfare agency from its customers, and the audit found the problem is worsening.

The auditors reported the "average" waiting time that Centrelink reported to the government - 16 minutes - did not reflect the true experience of many customers, 30 per cent of whom waited unanswered for 30 minutes or more before their inquiry was answered.

On the positive side, the Auditor-General's office acknowledged that the department was making progress in revamping its customer service and moving tens of millions of transactions each year online.

But the auditors questioned why the giant department could not follow the lead of other government agencies, like the Tax Office, and give callers a more realistic idea of how long they might be waiting.

"Of the 56.8 million calls made to Centrelink 1800 or 13 telephone numbers in 2013-14, 43.1 million calls were able to enter the network while 13.7 million calls were unable to enter the network, that is, the calls were blocked and the callers heard the 'busy' signal," the report says.

"Of the 43 million calls in 2013-14 that were able to enter the network, around 45 per cent were answered by a service officer and around a quarter were resolved in the interactive voice response system."

But the audit office estimated the remaining 30 per cent, about 12.9 million phone calls, were simply abandoned.

In its defence, Human Services said that it must work with the resources it is allocated and estimated it would need to hire 1000 new public servants, at an annual cost of $100 million, to bring average waiting times down to five minutes.

But the auditors found the department's performance did not stack up well against that of other departments.
"The current target does not provide a clear indication of the wait times Centrelink telephone customers can generally expect, due to the distribution of actual wait times around the 'average'. Centrelink customers also continue to experience high levels of call blocking and call abandonment, which can further impact on the customer experience," the report says.

canberratimes.com.au 20 May 2015

Centrelink is another corporation that is committing fraud against the people who rely on government welfare.

It's a REAL pity the corporate media does not report on this but rather focuses on 'dole cheats'.

19 May 2015

Samsung Galaxy S6 32GB S6 Edge 64GB Aussie retailer's rip off

In this new age of order for the entire world, where slavery has no boundaries, occurring under the banner of 'globalisation' or even 'refugees', where most of the world's products are made by corporations setting up slave labour camps in cheap labour countries like China or India, at this moment in time, why is it that Australian 'consumers' ALWAYS get ripped of blindly by corporations / governments when it come to purchasing products?

Take for example on band new out of the 'box' Samsung Galaxy S6 32 GB model.

This is supposed to be Samsung's 'flagship' model, which does not include a removable battery or even a memory card slot (usually micro-SD), what a (deliberate) step backwards.

Form an Australian retailer Officeworks, the price in the illustration above shows that a Samsung Galaxy S6 32 GB model retails for $987.

The SAME model phone from Verzion in the United States, retails for $US599, where at the current exchange rate of 1.2553, it works out to be AU$752, approximately 31% more.

The price comparison for the S6 Edge 64GB in the US v AUS is US$799(AU$1002) v $1285, or 46% more.

In the US there is a $100 difference between either 32GB and 64GB models.

A 32GB micro SD card, from a popular PC wholesaler retails for AU$16 (US$12.75).

It seems like Samsung is deliberately limiting users from having the option of using their own (cheaper) storage, in favour of an 'upgrade' to the next model.

A class action lawsuit waiting to happen in the U.S.

We do not recommend the purchase of the new Samsung S6, for lack of removable battery, no micro SD, and the OUTRAGEOUS price for a 64GB phone for nearly $1,300.

18 May 2015

Moeliker v Chapman [2000] HCA 242 (17 May 2000) - Authorities deleting cases

If you have had anything to do with the way 'authorities' operate on the land mass called Australia, be it at the drone level e.g. serving or stacking paperwork all the way to the alleged to top the legal food chain, be it a high court judge, barrister, Q.C., policy maker or whatever you would be aware of the huge corruption within the system.

From judges accepting bribes ranging from 'free' printers to cards loaded up with cash that can be withdrawn from ATM's at the rate of $1000 per day, Australia's so called 'justice' system is nothing more than white collar criminals running an extortion racket, where you are deceived, coerced, intimidated or beaten into submissiveness / compliance / contractual agreement.

Oh, don't worry 'justice' will be served, with the judicature and all it's minions supporting the fraud.

It's not only about what you read (on the internet), but also what you do not.

Many a case has been erased from the archives so that the masses do not get an idea of what's really going on in the place of business / trading / commerce commonly known as the court, so that they do not apply this for their benefit.

A sore point of many Australians is a (necessary?) evil called TAX, where the conversation may follow for those in the know that the ATO (Australian Tax Office) is not a legal entity and therefore cannot 'tax' you.

But what proof would one have of this?

Where would one turn to, to obtain this information?

Well, as many a learned 'natural' person may tell you, the [bible?] for Australasian legal information would be the Australasian Legal Information Institute, but of course, with the internet address of www.austlii.edu.au


Let's go there and find a tax case called...... hhmmmmm...... Moeliker v Chapman as "someone on the internet told me".

P.S. The Maggots Magistrates' hate it when the (uneducated) plebs refer to High Court cases.

No problems you say....

A simple search for the month of May in the year 2000 will give you the following results:

Hmmmm no Moeliker v Chapman [2000] HCA xxx (17 May 2000) in the above illustration taken from austlii.edu.au on the 11th of May 2015.

So, in summary the case (that the ATO is not a legal entity) is NOT available for the public to download.

Bit of a bugger that....


Fear not!

The transcript of the case is available at:


MAKE NO MISTAKE - The 'authorities' (you know the AFP (Australian Federal Pigs Police), the cops, judges, magistrates, judicial clerk, registrars)  lie, falsify evidence, destroy evidence, tamper with photographs / video evidence, shred documentation if they are going to be placed in the position of being exposed.
There are plenty of other court cases that are hidden from the public, that expose the corruption of Australia's 'justice' system.

If you have any documentation that has been removed or altered from the 'archives' please contact us so this information can be replicated to many other places, of course in the interest of 'good governance' and for 'the people'.

See article:

Sacked AFP officer: 'We lie to members of the community on a daily basis'