What better way to spend lazy holiday afternoons than comparing last month’s tax transparency report from the Australian Tax Office (ATO) with the one a year earlier? Everyone wanted to do this. Crikey actually did it.

This gives us a pretty good estimate of the company tax revenue now bleeding from the federal budget. Fortunately some brandy was left over from the Christmas pudding, as the outcome might otherwise have dampened the season’s cheer.

The ATO has revealed gross income, taxable profit and tax paid for more than 1850 companies in 2013-14 and 2014-15. From this we can see whether revenue and tax paid went up or down.

Crikey examined all 133 corporations with gross earnings above $2 billion. With enough brandy, of course, we could have scrutinised all corporations, but these are enough for our purposes.
The first observation is that gross profits increased significantly in 2014-15 over the previous year. Big winners included Apple, Burrup Train, Scentre Group and Woodside. All enjoyed a lift of more than 34%. Revenue at BHP Aluminium, CBI Constructors, Newcrest and SABMiller was up more than 50%. Revenue at CNPR Ltd, Glencore and Samsung C&T was up 500%.

Gross earnings overall for the 133 biggest corporations were up by $7.72 billion. So it was a pretty good year.

Naturally, we would expect taxable profit to be a much higher proportion of the gross earnings in 2014-15 than the year before, given lower interest rates, depressed wages and dramatically lower fuel costs.

But nope. The opposite, in fact. In 2013-14, the 133 companies declared 12.03% of gross earnings as taxable profit. This fell to 11.90% in 2014-15. It’s not much of a drop, but it’s a fair slice of the budget deficit — as we shall see.

Of particular concern are the enterprises that reported huge profit rises but paid less tax — or none at all.

[Company profits soar, but taxes MIA]

Anglo American Australia increased its gross earnings by $63.9 million to more than $3.6 billion. But it somehow reduced its taxable income from $158.4 million to just $32.4 million. For the second year in a row it paid no company tax in Australia, but the UK parent continued shareholder dividends.

Chevron Australia increased gross profit from $3031.7 million to $3088.4 million but still paid no tax. The US parent increased dividends from $3.90 to $4.21 per share. ERM Power increased its revenue by 14% to $2.3 billion but turned a taxable profit into a loss.

Glencore Investment Holdings, registered in Bermuda, recorded a staggering rise in gross earnings from $1074.9 million to $7787.9 million. Still paid no tax.

Crikey accepts the ATO’s assurances that paying no tax is not necessarily evidence of evasion. We note, however, that rorts have already been proved by the Senate inquiry, ATO annual reports and the national audit office’s review of the ATO in September. We know also that gross debt is now increasing by an alarming $7395 million each month.

[Australian tech darling Atlassian boasts of paying tax, pays zero tax]

The top 133 companies really should have reported gross earnings much higher than the $990.5 billion declared, given the steady global recovery and the benign local regulatory regime. Between 6% and 12% more seems conservative, on all the evidence. Taking the lower rate, earnings of $1049.93 billion should have been reported, as a minimum. Of this, the same percentage should have been shown as taxable profit as in 2013-14, which is 14%. This would have brought the total taxable profit to $1049.93 billion x .14 = $146.99 billion.

If tax had been paid on this at the required rate of 30%, then the federal budget would have received $44.10 billion. Instead, the ATO collected just $29.39 billion. That’s a shortfall of $14.71 billion. So in percentage terms, the ATO in 2014-15 collected just 66.65% of the company tax actually due. That’s just from these 133 companies.

Can we extrapolate this to all Australia’s 1.1 million corporations? Almost certainly. The total company tax take in 2014-15 was $68,000 million. If that is 66.65% of the company tax actually payable, the total should have been $102,026 million. The shortfall was $34,026 million.

That is consistent with the findings of the Senate inquiry. And it is the greater part of the 2015 total budget deficit of $37,867 million.

If this seems a stretch — claiming companies should have paid $102,026 million instead of 68,000 million — remember they paid $64,790 back in 2007-08. That’s only a 6.7% annual increase over that period.

The conclusion is pretty clear. Australia does not have a spending problem. It has a problem collecting taxes from the top end of town. Now, where’s that brandy?