Mrs DE-ANNE KELLY (5:31 PM) —I rise to speak on the Inspector-General of Taxation Bill 2002. This bill will establish an independent statutory office of Inspector-General of Taxation. In its 2001 economic statement, Securing Australia's prosperity, the government committed to strengthen its level of advice on tax administration and to promote the advocacy of taxpayer concerns. The passage of this bill, should it pass—and those of us who are concerned about advocacy for taxpayers trust that it will pass—will see that commitment fulfilled.

The IGT would be appointed for up to five years, and the terms of his or her appointment or dismissal will ensure that he or she has a high degree of independence. The inspector-general will be able to conduct any review which he or she considers necessary to determine that the tax administration system office operates fairly and even-handedly. Whilst the inspector-general will have strong powers to compel tax officials to produce documents and take evidence from them, he or she will not compromise the Commissioner of Taxation's independence in administering tax laws; nor will the powers of other review agencies, such as the Ombudsman, be compromised. The inspector-general is required under this bill to consult with both the Auditor-General and the Ombudsman. Obviously, that process will avoid any unnecessary duplication. There will be no additional burden on taxpayers nor will there be any increase in compliance costs.

The inspector-general's role is to investigate systemic tax administration issues, and it will not extend to the affairs of individual taxpayers or businesses. No taxpayer can be identified in any report from the inspector-general. This bill has been the subject of wide consultation with taxpayer groups, tax advisers, businesses, individuals and the Board of Taxation. As a member of parliament, I have to say that this bill is absolutely necessary and that an Inspector-General of Taxation is absolutely necessary. Regrettably, there is a systemic attitude that has developed within the tax office which needs addressing.

I turn now to the subject of federal agencies. There is a necessity for federal agencies to be professional, to fulfil their charter and meet their legislative obligations. It is expected by the Commonwealth that they will demonstrate professionalism, provide a level of service and have a culture which engages with those that they are meant to serve rather than one which confronts them. In my own area, Centrelink is one of our leading Commonwealth agencies. In 1995 it was perhaps not seen in the same light as it is now. There is no doubt that Centrelink is seen as a compassionate, professional organisation that delivers a high level of service in a culture of partnership and problem solving. Remember that people who see Centrelink are generally in transitional phases in their lives—they have either lost a job or had a marriage breakdown. It is a very traumatic time for most people. Centrelink staff have quite a challenge to deliver a professional, caring service.

Unfortunately, the Australian Taxation Office is one of our least professional federal agencies in terms of service to customers. I believe it has improved but I will give one example, that of the mass marketed tax schemes. I am not here to debate the merits of these in any way, but simply to talk about the interaction that taxpayers had with the Australian Taxation Office at that time. Many of the people drawn into these schemes were relatively unsophisticated; they were certainly sold a very slick tax arrangement. Many relatively unsophisticated investors in my electorate made a sincere attempt to inform themselves and rang the ATO. When I asked, `Where did you ring?', they said that they rang Brisbane—of course, with the call centre numbers now, they could have rung anywhere—and they actually reached a tax official. Some of them even took the trouble to make notes of their conversation. After a brief conversation, they believed that in some way they had been given authority or the tax office had endorsed the scheme.

There is no way of ever checking that, because the phone calls were not logged, as they are with Centrelink. There was no follow-up letter to the taxpayer or investor who had rung, not even a cursory letter to say, `We acknowledge your phone call seeking information; you must write to us in more detail. We cannot give you advice over the phone, and you should view any investment with caution and seek sound advice.' I think a letter like that would have saved a great deal of heartache, penalties and cost for many of my constituents.

This was the poorest of poor services. Obviously the tax officials in the call centres and offices around Australia had not been trained to deal with calls like this—to log them, prepare a database and send out some sort of cursory warning to potential investors in mass marketed tax schemes. As I said, I am not debating the merits of mass marketed tax schemes. But I am disappointed that, through a culture of poor customer service and poor administration of inquiries to the tax office, the ATO allowed people to fall into the clutches of those who would exploit them.

As well as that, there are other taxpayers—sometimes with intent, and others through no fault of their own or poor advice—who fall foul of the ATO. Again, without debating the merits of the various schemes and arrangements that people enter into, the ATO's attitude towards many of these hardworking men and women is to make them feel like common criminals or to belittle them. There is certainly evidence—and I want to draw it to the House's attention today—that people are dealt with in a very aggressive and belittling manner by some officers of the ATO. Such a culture should not be encouraged or allowed to persist in any federal agency.

I will refer now to a letter received by one of my constituents. I do not intend to go into the arrangement that my constituent entered into; this is not a debate on the merits or otherwise of the scheme. It is sufficient to say that my constituent is a long established businessperson and is well respected in the community. In good faith and with advice, they entered into an arrangement which operated for several years. Subsequently, it was retrospectively disallowed by the ATO. As I have said, I am not going to go into the relevant merits of the case, but I want to quote from the letter that was sent to my constituent on 2 September this year. It is quite an extraordinary letter from the Deputy Chief Tax Counsel and it states:

It goes on in this bumptious, superior and supercilious manner. What he is really saying is `be careful'. At the end he basically says, `If you lose this, you'd better be careful'—but, again, in a supercilious and superior manner.

Australian taxpayers deserve, at the very least, to be informed in a courteous manner. There is a culture in the ATO that is curt and, as I have said, bumptious and supercilious. I think that my constituents and others deserve better. I hope that this culture can be rooted out by the Inspector-General of Taxation and that this lack of professionalism and service can also be addressed. Whether that is in the inspector-general's purview of activity, I am not sure. But I trust that having an inspector-general there will address many of these rather aggressive and unprofessional approaches that the ATO has adopted. That is not to say that the ATO should not seek revenue; it must. It must fulfil its legislative requirements, and that is not in dispute. But the ATO needs to reach the level of professional service and courtesy for which other lead Commonwealth agencies are well known, such as Centrelink—and, might I also say, the Customs office, which is well regarded in my area.

I certainly welcome the government's announcement regarding the establishment of an Inspector-General of Taxation and I wholeheartedly support the bill—and so should other members of the House who are concerned with the way in which their constituents are dealt with on systemic tax issues. But there is always somebody who cannot see good, and I regret that the shadow Assistant Treasurer, the member for Kingston, is one of those who are not supportive of this legislation. He was reported in the Age as saying that the inspector-general was a `smokescreen to trick taxpayers into believing the government was tackling tax problems'.

Mr Slipper —He just wanted to get his name in the paper.

Mrs DE-ANNE KELLY —Yes. He is trying to find an issue, I am afraid—either that or he never represents constituents with the ATO, which is more likely. In the Australian Financial Review three days later, he said that the inspector-general had been `set up to fail'. He said that the government was establishing the tax inspector `in an attempt to deny its own responsibility for major deficiencies in tax administration.' What a fearful contribution to make to the debate. Wouldn't you think that the Labor Party would support this and give it a trial? If the member for Kingston believes that will be the outcome, he will have plenty of time over the next few years to chart the progress of the Inspector-General of Taxation. But no, here is a good idea sunk right at the beginning—the typical carping negativity that we have come to expect from the ALP. It is clear that he has not talked to taxpayers, otherwise he would be supporting the bill.

As for the shadow Assistant Treasurer's final comment, anybody who knows the Assistant Treasurer, Senator Coonan, also knows that she is not someone who would set something up to fail. She sets things up to succeed and to work for everyone. The Assistant Treasurer is an achiever and she is willing to try something new. I think establishing a position of Inspector-General of Taxation is a very sensible initiative; I support it and so do my constituents. This bill furthers the government's record of tax reform. I hope that this bill will see passage through the Senate. It is going to be a great boon for taxpayers and I believe it will change the culture in the ATO. I commend the bill to the House.