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Monday, 17 March 1997
Page: 1546


Senator HARRADINE(2.22 p.m.) —I understand the point that Senator Sherry has made that we are under a great deal of pressure, but I hope we will not regret what we have done in this piece of legislation. All I am trying to get to is the bottom line: that is, the taxpayer should not be disadvantaged in any way by the passage of this legislation.

If the minister cannot tell me of the tax treatment of redeemable shares, then we have a problem. I thought that was a matter of common interest, of vital public interest. The Minister representing the Treasurer (Senator Kemp) is not able to tell me about that, particularly when we are talking about non-cumulative preference shares which are redeemable at the issuer's option. They are down as equity. This measure here treats them as debt, as I see it, unless the minister can tell us otherwise.

Bearing in mind the points that have been made, I have quite a number of other matters, but it is obvious that we are not getting very far. I do thank the minister for attempting to respond, but I will have a look at the responses and we will just have to see what the ultimate result will be. I have a very funny feeling that Senator Margetts's perceptive comment was really looking into the future as to what might well be—and I think she may well be right. I now seek leave to move amendments Nos 2 and 3 together.

Leave granted.


Senator HARRADINE —I move:

(2)   Page 2 (after line 26), at the end of Division 1, add:

1-4 Rewritten Act not to disadvantage taxpayer

It is hereby declared that nothing in this Act:

(a)   makes a person liable to pay income tax if, under the provisions of the Income Tax Assessment Act 1936 as in force immediately before the commencement of this Act, that person would not be liable to pay income tax; or

(b)   makes a person liable to pay a higher amount of income tax than that person would be liable to pay under the provisions of the Income Tax Assessment Act 1936 as in force immediately before the commencement of this Act.

Note:   The Table of Sections to Division 1 is altered by adding at the end "1-4 Rewritten Act not to disadvantage taxpayer".

(3)   Page 370 (after line 25), after clause 950-150, insert:

950-155 Ambiguity in the interpretation of this Act

In the interpretation of this Act, any ambiguity must be construed in favour of the taxpayer and must be so construed as not to derogate from any common law right.

Note:   The Table of Sections to Division 950 is altered by adding at the end "950-155 Ambiguity in the interpretation of this Act".

I will not debate these amendments. They probably have been canvassed around the place. But I would like to respond to the minister's suggestion that this is somehow putting in place a parallel situation in that you will be referring to the 1936 act and this particular act when passed.

Quite frankly, everybody will be referring to this particular act as passed, except the Taxation Department, possibly a few accountants and, of course, the judiciary. The point I am making to you is: that is what you have done in the legislation itself. In 1.2, as we have said before, you have referred to the 1936 act. You have said that, just because there are different words in this piece of legislation, they should not be construed as meaning there are different ideas. You did not say it the other way around, but you should have. That is what you have said.

Ipso facto, you have done precisely what you have accused me of doing—and that is, you have said that there has to be a comparison made at some stage in the event of a dispute. Can't you see that? That is what you have done in your own legislation.

Then you accuse me of setting up a parallel. Obviously you have to have a parallel, if you are rewriting a piece of legislation in a simplified form; some people have to compare it at a particular stage when there is a dispute. That is what I am saying here. But I am also saying that, in that comparison, there should be no disadvantage to the taxpayer; and, if there is any ambiguity, it should be resolved and construed in favour of the taxpayer. That is all I am saying. I thought that would be a most reasonable way of saying that.

Now the minister comes back. He does not say that that is all very well, but he does say that what it then does is to say that this new act cannot then be amended in a way that would place a further burden on the taxpayer because of this piece of legislation. You have to compare that to the 1936 act.

With due respect, that is a nonsense. The courts always take cognisance of when the provision was inserted; thus, they do not assume that it was intended to take in later amendments. That is made perfectly clear. `Rewritten act not to disadvantage the taxpayer'—that is in my amendment, for goodness sake.

The statement made by the minister in opposition to the amendment falls. All I ask, through you, Mr Chairman, is that the committee pass these amendments which ensure that there is no disadvantage to taxpayers and, in the interpretation of the act, any ambiguity must be construed in favour of the taxpayer.