Should there be a change in the government during this time, they would be unable to quickly retreat from the provisions of the treaty. The requirement to successively 'roll back' reservations, or as is expressed in the French draft of the text, the 'dismantlement' of the reservations, would mean that even the limited protection accorded to sensitive investments would be threatened. Similarly the 'stand still' conditions in the treaty would make it impossible for subsequent governments to add to Australia's reservation list. In our opinion, this amounts to giving away the right of governments to legislate in the interests of their electorates. The requirement that multinationals receive domestic treatment when they invest will discriminate against local investors who may not have the same economic power as multinational companies.
Economies of scale have the potential to obliterate local companies and especially small business.
In addition, any subsidies which the government aimed at facilitating small business could be claimed by multinationals on the grounds of domestic treatment. The domestic treatment clauses overlook the fact that the Australian taxpayers have for generations funded the kinds of infrastructure which makes industry efficient and profitable, such as roads, airports and telecommunications. Yet there is no provision within the treaty which would guarantee that multinational companies would contribute to infrastructure costs, or compensate the Australian public for using the existing infrastructure. Multinational companies will be effectively subsidised by Australian taxpayers and domestic industry, augmenting their already existing ability to minimise taxation. In the past it has been the practice of multinational companies to play off peripheral zones in the world in order to find countries willing to provide the highest tax breaks with the lowest costs of labour.