News World Pledging action on climate change, Mathias Cormann takes OECD top job

Pledging action on climate change, Mathias Cormann takes OECD top job

mathias cormann oecd
When he took over at the OECD,, Mr Cormann singled out climate change as a top priority. Photo: Getty
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Former Australian finance minister Mathias Cormann has pledged to do all he can to “promote global leadership to tackle climate change” as he takes over as secretary general of the OECD.

Mr Cormann, 50, is a native of German-speaking eastern Belgium and succeeds Mexico’s Angel Gurria, who led the Organisation for Economic Co-operation and Development for 15 years.

As of Wednesday (Australian time), he becomes the first man from the Asia-Pacific region to hold the position at the Paris-based organisation, which has a five-year term.

He was finance minister from 2013-2020 and a Western Australian senator for the Liberal Party from 2007-2020, before standing down to chase the top OECD job.

Mr Cormman’s campaign for the position sparked a backlash from environmental groups, who criticised his record in successive climate-sceptic Australian cabinets, notably under former prime minister Tony Abbott.

At a news conference after taking the reins, Mr Cormann said “we need to continue of course to promote global leadership to tackle climate change and achieve global net zero emissions by 2050”.

He singled out the OECD’s International Program for Action on Climate, a new tool to evaluate members’ efforts to reduce emissions, as a key part of the organisation’s contributions.

He promised the program would share key findings in time for the UN’s COP 26 climate conference in Glasgow, Scotland, in November.

“We have got to explore every opportunity to maximise our emission reductions efforts,” he said.

Mr Cormann was also “quietly optimistic” about reaching an international deal on taxing multinational companies, calling US President Joe Biden’s recent proposal a “game changer”.

“Clearly there are a lot of conversations still on the way. You know, you don’t get too far ahead of yourself but I’m quietly optimistic,” he said.

More than 140 countries are involved in talks convened by the OECD that focus on a global minimum for corporate taxation to deter big companies from shifting their profits to low-tax jurisdictions, and on taxing multinationals that earn substantial revenue in countries where they have no physical presence, such as internet retailing and digital advertising companies.

The talks had stalled over issues such as whether companies could choose to opt in to any new system, a proposal put forward by the US under former president Donald Trump.

Mr Biden has proposed setting at least a 15 per cent minimum global corporate tax that would put a floor under tax rates and end what US Treasury Secretary Janet Yellen has called a “race to the bottom” in which tax havens use low rates to attract revenue.

The global rate, part of a tax proposal aimed at helping pay for Mr Biden’s infrastructure program, also would raise the US corporate tax rate from 21 per cent to 28 per cent.

“I think the approaches taken by the Biden administration in relation to this issue have been a game changer,” Mr Cormann said following a ministerial-level meeting of the OECD Council.

“I think that we are in a much better position than we were towards the end of last year,” he said.

The OECD, an international organisation with 38 member countries, estimates that governments lose up to $US240 billion ($A310 billion) a year to companies that shift earnings among countries to lower their tax bills.

-with AAP