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Thursday, 26 November 1959

Mr HAROLD HOLT (Higgins) (Treasurer) (12:51 PM) . - I move -

That the House do now adjourn.

I take this opportunity to mention a query raised yesterday by the honorable member for Wilmot (Mr. Duthie). He asked whether inquiries had been completed by the Commissioner of Taxation into some allegations he had made earlier in this sessional period. I have received a report from the Commissioner of Taxation on this matter. I remind honorable members that the honorable member for Wilmot launched his attack on what in his own words, he described as -

The Gestapo tactics of taxation officers who are touring country districts, especially in my State of Tasmania and interfering with what I regard as the sacred rights of the individual.

The honorable member alleged that the private affairs of taxpayers - again using his own words - were being " pried into and examined in a completely contemptible way ". He instanced three cases which, he said, illustrated the objectionable questioning tactics of which he complained.

At the direction of the Commissioner of Taxation, two senior officers of the Taxation Head Office, Canberra, visited Hobart from 26th October to 28th October. The general instruction given to them was to make all such inquiries as seemed most likely to produce information relevant to the matters mentioned in the honorable member's speech, so that I, as Treasurer, might be assured that his complaints and charges had been thoroughly investigated. They were concerned, therefore, to ascertain and to examine the procedure and tactics followed by the Hobart investigation staff in the discharge of their official duties, and to learn, by direct inquiry from people whom they thought best qualified to know and to judge, whether or not these people, or the public in general, shared the honorable member's expressed views as to the alleged oppressive and objectionable nature of the inquiries made by the investigation staff. The administrative officers of the Hobart Taxation Office and the investigation officers themselves, were also interviewed, and were questioned at length as to their operations and as to their relations with the taxpaying public.

I think it desirable to say, at the outset, that the inquiries of the Commissioner's officers produced no evidence whatsoever to support the honorable member's charges of oppression and objectionable methods. On the contrary, and without exception, the people interviewed, and who may, I think, be correctly described as a representative cross-section of responsible people in tha Hobart community, dismissed the honorable member's charges as extravagant and unwarranted. Again without exception, these people expressed the opinion that departmental investigations were conducted on a fair and reasonble basis, and that every assistance and courtesy were shown to them, and to their clients, by departmental officers. The staff of the Hobart Office are incensed at the honorable member's charges, all of which they deny. When viewed in the light of the opinions of responsible members of the legal and accountancy professions in Hobart, these denials can, I believe, be accepted as representing the true and factual position.

The Commissioner's officers thought that the general foundation for the honorable member's charges would best be tested by inviting comment from some of the leading solicitors, accountants and tax agents in practice in Hobart. Whilst I am conscious that the honorable member referred to departmental actions as providing a " racket " for these professional men, I am convinced that, had there been this widespread serious departmental malpractice of which the honorable member complains, then these men would have had personal experience of it, or would have been told of it by the public, and I am equally convinced that men of their stature would not, in self-interest, have condoned it or concealed it. Time did not permit, nor did it seem necessary, that all Hobart practitioners be interviewed, but I am pleased that the officers were able to include in their list members of accountancy firms which have offices in the various country centres of Tasmania. They did not publicly invite members of the general public to call on them. Nevertheless, in a city of Hobart's size, and bearing in mind the publication of parts of the honorable member's speech in the Melbourne and Hobart press and the number of people they did in fact see, I have no doubt that their presence and purpose in Hobart were widely known. Had any taxpayer wished to complain, I am sure he would have sought them out, but none did so.

Without their prior consent, I think it would be improper to name the many professional men who were interviewed and who gave the Commissioner's officers information and assistance in their inquiries. They chose to interview, in the professional field, men of long-standing experience and acknowledged competence, and men whom they knew had acted on many occasions for clients whose affairs had been, or currently were, the subject of departmental investigation. They did not, however, confine their inquiries to professional practitioners, but extended them to men holding responsible positions in the State and Commonwealth spheres, in Hobart public life. In every instance, they were well received, and from the general attitude of those interviewed it was apparent that the Hobart investigation staff was respected and the method of its operations not at all resented. It was said, of course, that the work of the investigators was, by its very nature, not welcomed by those being investigated, but not once was it said that the methods used were regarded as objectionable. One gentleman, the senior partner in probably the oldest and most prominent of the accountancy firms with branches in several parts of Tasmania, offered, quite without any request, to convey in a letter to the Commissioner his reaction to the honorable member's speech. In his letter, this gentleman writes -

The Melbourne " Herald " recently published a statement made by Mr. Duthie, M.H.R., in the House of Representatives. The statement criticized the manner in which officers of your Department in this State carried out their duties, especially those associated with the Investigation Section.

My firm have, over many years, had considerable experience in dealing with taxpayers whose affairs have been the subject of investigation by your officers. We have never heard of any complaints as to the method they employed in carrying out their duties and certainly their behaviour has, from our experience, always been beyond reproach.

The remarks in this letter are typical of what was told to the Commissioner's officers by all those whom they interviewed. At least one other gentleman offered to give a similar written opinion should the Commissioner desire it. It was said by some of those interviewed that it had often been found that the trouble in which some taxpayers found themselves had been due to poor quality work previously done for them by their agents. Several people said that they had had occasion to join issue with the department on the results disclosed by an investigation, and that they had always found the department ready to amend these results upon reasonable cause being shown. Among those interviewed was an exinvestigation officer who freely said that, due to a belief that he had been unfairly treated in the matter of departmental promotion, he had resigned as a dissatisfied officer. Despite this, he has no criticism to make of the methods or official conduct of the present investigation staff.

After examining investigation procedures and questioning the investigation officers in the Hobart office, the Commissioner's officers are satisfied that the general procedure is patterned on what has been in use in all States for many years, and that the officers are at once diligent in their important and onerous task of safeguarding the revenue, and courteous and reasonable in the performance of this task. They discussed with the Supervisor (Investigations) and with individual investigation officers the particular allegations contained in the honorable member's speech. The first case to which he refers was readily identifiable, and was one which was dealt with by way of an indoor examination. No inquiries of any kind were made by the outdoor investigation staff, and the only questions asked of the taxpayer were asked when, of his own volition he called at the taxation office.

I will not have time to go through all these cases in detail, but one example of the error of statement made by the honorable member was when he referred to an understatement of income charged against a taxpayer totalling £14,300. In fact, this figure was not, at any stage, higher than £4,291. I have other details of these matters which I would be willing to discuss with the honorable member. The information gained by the Commissioner's officers on their visit to Tasmania may be summed up thus - (a)Registered tax agents and members of the legal and accountancy professions practising in Tasmania, with one exception, appear to have no complaint against the methods adopted by investigation officers nor against the conduct of these officers, nor have they fault to find with the administration authorities in the Hobart office. On the contrary these people speak well of the Hobart office.

(b)   No member of the general public complained of investigation methods.

(c)   The Hobart investigation staff denies the truth of the honorable member's charges and are anxious that the charges be publicly answered.

(d)   An examination of Tasmanian investigation procedure and a questioning of the investigation staff providesno support for the charges made by the honorable member.

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