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Wednesday, 23 March 1994
Page: 2039


Senator SHORT (12.26 p.m.) —I have just one brief comment on Senator Sherry's correct statement that the bill did originate in the other place. I make the point that the question of where the bill originated, for the purposes of the debate we are having, is irrelevant. The problem that we are pointing out and that the clerk has drawn attention to is that the bill was classified by the government as a bill which does not impose taxation. The government having so classified the bill, we say that there is an extraordinary paradox created by the government then adopting in this place the approach that we have to request amendments to the bill, because that, almost by definition, means that the government is here regarding the bill as a bill which does impose taxation. As I said last night, the government cannot have it both ways: either it is a bill which imposes taxation or it is a bill which does not impose taxation. That is the crux of the issue. I would say to Senator Coulter that the question of whether the bill originated in the lower house is not specifically germane to the core issue that we are considering here.


The CHAIRMAN —Order! I will make two observations. Firstly, I was asked where the bill was initiated. It was initiated in the House of Representatives. Secondly, in respect of the ruling, I remind the Senate that I am but a humble instrument of the chamber to do its will. This can be a conflict between both houses, perhaps ultimately justiciable before the High Court, but for the time being it is the will of the chamber which prevails. Whatever my private view might be, I do not think it should impinge upon the debate. If that frustrates anyone, I am happy to give a private view later on, but I think for the time being that the chamber is entitled to proceed any way it so determines. I have a copy of the clerk's letter and if it be the will of the committee I propose to incorporate it.

  Leave granted.

  The letter read as follows

22 March 1994

Senator B Cooney

The Senate

Parliament House

CANBERRA ACT 2600

Dear Senator Cooney

TAXATION LAWS AMENDMENT BILL (NO. 4) 1993

I am writing to each member of the Legal and Constitutional Affairs Committee concerning the government amendments and requests to be moved to the Taxation Laws Amendment Bill (No. 4) 1993, which draw attention again to the paradoxical nature of the classification of taxation bills hitherto followed and expounded by the government's legal advisers for the purposes of section 53 of the Constitution.

You will recall that the difficulties arising from this classification of bills were highlighted during the Committee's inquiry into the taxation legislation at the time of the 1993 budget, and were referred to in the submissions which I made to the Committee.

The Committee does not have a live reference relating to this matter, but I thought that members of the Committee may be interested in recalling it.

The Taxation Laws Amendment Bill (No. 4) 1993 is classified as a bill which does not impose taxation. Many of the government amendments to the bill, however, are to be moved in the form of requests for amendments, because the view is taken that they would have the effect of increasing the liability to taxation and therefore fall within the third paragraph of section 53 of the Constitution, in so far as they would "increase any proposed charge or burden on the people".

The paradox is readily apparent. How can an amendment increase a proposed charge or burden on the people when the bill to be amended is classified as a bill which does not impose taxation and therefore presumably does not propose any charge or burden on the people? How can a bill which could be introduced in the Senate (because it is not a bill imposing taxation) then be amended in such a way as to increase the burden of taxation? Can the Senate introduce a bill which it cannot itself amend in that way? If the proposed amendments have to be requests because they would increase a charge or burden on the people, does it not follow that the provisions in the amendments actually impose taxation?

In the absence of a definitive judgment by the High Court on the meaning of "laws imposing taxation", the matter cannot be finally settled, but by providing every now and again another reductio ad absurdum of the classification of tax bills, the government and its advisers are ensuring that when the High Court judgment eventually comes it will be more destructive of the existing tax law.

The rational course, it seems to me, would be to avoid this nemesis by adhering to a less risky classification of bills, but this course does not seem to commend itself.

Yours sincerely

Harry Evans