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Thursday, 14 May 1987
Page: 3282


Mr COBB(10.16) —I move:

Schedule 4, page 54, Income Tax Assessment Act 1936, omit proposed subsection 263 (3).

The present section 263 of the Income Tax Assessment Act provides the Commissioner for Taxation and authorised officers with the power of access to buildings and documents without having to give notice. That may sound reasonable, but in practice these powers have been abused beyond belief. Now these powers are to be expanded even more. Schedule 4 of this Bill will add a completely new sub-section, 263 (3), which says that any authorised tax officer who proposes to enter or who has entered a building to carry out his investigations is entitled to `reasonable facilities and assistance'. I rather like the way in which the Government has slipped in the word `reasonable'. That is done for a purpose as such words are meant to sound innocuous and therefore difficult to oppose. However, a knowledge of how the Act has worked in the past, with all the abuses that have gone with it, could lead one only to the conclusion that the last thing we need in Australia today is a further extension of powers in this area. An inkling of what is proposed shows up when we read the explanatory memorandum to the Bill explaining what powers it is intended to confer. A person will have to provide photocopying, telephone, light, power, and work space facilities. One will have to allow tax officers to extract relevant information stored on computer. One will have to give advice as to where relevant documents are located and give access to areas where such documents are located.


Mr Conquest —And morning tea?


Mr COBB —That would complete the list. It goes on to say that penalties of $1,000 will be applied for breaches of these so-called reasonable requests. I pause here to stress that I am talking about ordinary Australian taxpayers, not criminals. It is worth recapping what the present law is. The Taxation Commissioner and his officers can burst into any office or building in this country now, at any hour of the day or night, totally without warning, and do so without a warrant. He can gain entry to any premises by any means--


Mr Braithwaite —It sounds like burglary.


Mr COBB —It does sound like burglary. He can gain access by any means including forcible entry and the destruction of property. In this respect it is worth reading the case of Kerrison v. Federal Commissioner of Taxation. The Commissioner can now demand the production of any documents relating to the tax affairs of a taxpayer and he can demand the personal attendance of any taxpayer at a place for questioning, under section 264. The taxpayer must answer any question to the extent he is capable of doing so. The Gestapo, no doubt, had similar rules. Failure to do so can attract a fine of $4,000. That is the law now. If we contrast that with the criminal law we find that under criminal law the police must first obtain a search warrant. The Taxation Commissioner does not have to do that. Under criminal law accused persons have a right to remain silent. One does not have that right under the taxation laws. Under the criminal law, one is innocent until proven guilty. Under section 8y of the Act a director of an offending company is deemed guilty until proven innocent. That is the situation now.

Tonight we should be winding those powers back, for heavens sake, not extending them. Why is this Government doing this? It has been snowed by the Taxation Office. There is a hatred in the Taxation Office; especially at the top, of all taxpayers, with the possible exception of the Treasurer who, I am told, is the beneficiary of some leniency. The Tax Office today is already acting above and beyond all reasonable powers given to it. It is taking an attitude to taxpayers out of line with that taken by previous Commissioners of Taxation. Taxpayers of Australia are being subjected to sickening treatment. They have fewer rights than a common criminal; they are being harassed and terrified beyond all reasonable bounds. The Commissioner of Taxation will not be stopped or thwarted in any way. Not content with this Goebbels-like power that it now exercises, the Tax Office wants to go further. The Treasurer is being used as an unthinking conduit by the Australian Taxation Office to ram through Parliament powers that the High Court of Australia is denying it. In the case of O'Reilly v. the Commissioner of the State Bank in Victoria, the High Court indicated that a person cannot refuse the Tax Commissioner access to premises, but that the Tax Commissioner cannot demand that that person assist him in his search.

Let us be quite clear on what we are voting on tonight. If proposed new section 263 (3) goes through, a tax officer will be able to request any person, even a taxpayer in his own home, to render such assistance. A tax officer can burst in without notice at any time and, despite the urgency of other work that might be taking place, can demand of the staff: `Do this; do that. Get this; get that.' If a taxpayer, faced with this real-world situation, thinks that is an unreasonable request, will he have the time, the wherewithal, the courage or the knowledge to debate the meaning of that word with him? Any misjudgment of the meaning could cost $1,000 a throw. Provisions such as those in proposed new section 263 (3) would be regarded as totally unacceptable in the criminal world, because they ride roughshod over every basic legal and democratic right of an accused citizen to adequate representation and a fair hearing. I say to all honourable members: Do not in this House give the Tax Commissioner the extra powers that he cannot win in the courts.

If we omit this proposed new section, as I propose, we will not be protecting tax cheats. It has been established on several occasions that the Commissioner already has ample powers to carry out his duties. Surely the Minister cannot argue that the present laws are inadequate. I have just gone through them. As the honourable member for Mackellar (Mr Carlton) so eloquently put it, the vast majority of taxpayers readily comply with the Commissioner's reasonable requests. To want now to be able compulsorily to enlist the assistance of occupiers of buildings in conducting investigations, and to do so without any cost recompense, is beyond the pale. Surely it is not too much to expect that, if a tax officer arrives at a taxpayer's home, that person be entitled to first obtain the advice of his accountants or advisers. Murderers can. Are taxpayers in this country to be considered below them?

Proposed new section 263 (3) also appears to give further weight to the recent trend to bypass the tax agent of the taxpayer. Not only is this an immature and unprofessional approach, motivated no doubt by the frontier posse mentality, but also by acting this way the Tax Commissioner will end up getting less information. Where the Tax Commissioner does give notice, it should at least be sent to the service of notice address. The investigation is usually best conducted there as well. But unfortunately the Tax Commissioner seems to have been watching too many cowboy movies. To raid a taxpayer's premises, except in very special cases, is, apart from any- thing else, a gross invasion of privacy. If tax officers land in a country town and go to one's place, one can imagine the rumours that go round the town. Even if one is innocent-and nine out of 10 are; there could be some minor discrepancy-people will say: `The tax officers are in there investigating; he must be ripping off the system. What sort of a businessman is he?'

Further, these investigations should be held say, for example, at the local council chambers, because if one is called in everyone in the chambers knows and the word goes around the town. They would be more properly be held at the tax agent's office. The Tax Office indulges in some dreadful public relations exercises. A proper format of investigation should be laid down. The trend of using accounting firms to do the Tax Commissioner's work should also be reversed. Almost 100 per cent of tax agents will do all they can to comply with reasonable requests now. However, the Tax Commissioner is making quite unreasonable demands. Let us not entrench and expand those demands with this legislation.

Proposed new section 263 (3) will in fact override section 264, which gives all powers of access now, such as the demanding of documents, calling of witnesses, answering of questions and so on. If this legislation goes through, however innocently it may read, if one cannot answer the questions one could be judged to be hindering the Tax Commissioner and fined, and the tax agent could have his licence taken away. The obligation should be on the Commissioner of Taxation to approach the agent first instead of intimidating the client. People in this country are now more terrified of the Commissioner of Taxation than they are of the police, and many of them pay fines to the Commissioner of Taxation even though they are innocent, just to get the Commissioner off their backs. This is an outrageous situation we have let develop in what is supposed to be democratic and free society. I ask all honourable members to reject this horrid proposed new section 263 (3) and vote to have it deleted.