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Wednesday, 9 November 1983
Page: 2477


Mr HOWARD(12.15) —I should like to reply to two matters that were raised this morning by the honourable member for Bendigo (Mr Brumby). The first matter he raised concerned the letter of 25 October 1982, which surfaced during the election campaign, written to me by Mr O'Reilly, the Commissioner of Taxation. It is true that in that letter the Commissioner of Taxation expressed concern about the inclusion of section 3 (12) in the principal Act. I do not mind admitting that the Commissioner of Taxation advised me against the inclusion of section 3 (12). I decided to include it because I believed--


Mr Robert Brown —You did not want to.


Mr HOWARD —No, I supported the inclusion of it because I thought the representations put to me by some of my then colleagues who were concerned about the legislation were legitimate representations. I do not mind--


Mr Robert Brown —You didn't want to; you were forced.


Mr HOWARD —No, on the contrary; I was perfectly happy to have it included. The reason was that it prevented this legislation having a reach beyond what was originally intended. The important thing is not who was for or against its inclusion; the important thing is whether the concerns expressed by Mr O'Reilly in that letter of 25 October have been borne out by the events. The fact is that they have not. Mr O'Reilly, properly exercising bureaucratic caution, said to me : 'Look, I know you want to insert the provision; I would rather you do not because I think there is a danger that something will happen'. Those fears have not materialised. The sum of $180m of the scheduled $590m has already been collected under the 1982 legislation. The advice that I received-I am sure it was openly given-a couple of days ago from senior officers of the Australian Taxation Office was that collections under the legislation were proceeding according to plan.

There is no serious threat to the revenue from the operation of section 3 (12). Quite apart from whether that provision should or should not be there, nobody can seriously argue about it. I do not blame the Commissioner for expressing the view which he expressed to me in October last year, but I believe that circumstances have vindicated my judgment. In fact, the concerns expressed by the Commissioner have not been realised. The 12-month so-called amnesty proviso which allowed people to pay over a period of 12 months has worked extremely well . It is just as well that the Government has dropped the absurd opposition to that proposal which was expressed by the Australian Labor Party when it was on this side of the chamber when we brought in our legislation and which it repeated earlier this year. That provision has facilitated collections, which I knew it would do when I put it in the legislation last year against the opposition of the Labor Party. I think we can forget any suggestion that the existence of section 3 (12) is undermining collections. Whilst the Commissioner had his proper reasons for writing as he did in October last year, those concerns have not materialised.

I now refer to the criticism which the honourable member for Bendigo made about the amendment. I think he is confused as to what the amendment is about. Under section 6 (18) of the Taxation (Unpaid Company Tax) Assessment Act there is a general discretion, in the hands of the Commissioner of Taxation available to be exercised in respect of all shareholders, whether they are shareholders in a private company or in a public company. The Government is saying that that discretion is deficient in one respect, and in one respect only-it enables the Commissioner to remit only the totality of a potential recoupment liability and not part of it. In other words, the Government is saying that under the existing Act the Commissioner can remit the totality of a liability of either a private company shareholder or a public company shareholder but he cannot remit part of that liability. By this amendment the Government is giving the Commissioner the power to remit part of the liability but only in respect of public company shareholders. We say on the basis of consistent treatment that that power to remit part of the recoupment liability ought to be extended to private company shareholders. That is all we are saying.

I shall be interested to know from the Minister Assisting the Treasurer (Mr Hurford) when he replies-if he can confine himself to the facts of the matter- what is difficult about that, what is wrong about that and how that will create horrendous difficulties. There is nothing inconsistent between what I said last night about there not being a fast ball from the Opposition on this matter and what I said in Perth. I simply said in Perth that the Dawkins let out should be provided to all those other public company shareholders who were in a similar position. I have not criticised the Deputy Commissioner of Taxation for letting Mr Dawkins off his taxation liability. I welcome the assurance given by the Minister Assisting the Treasurer-


Mr Holding —Mr Deputy Chairman, I raise a point of order. I ask the honourable gentleman to withdraw the remarks that he made. It is quite wrong to say that the Taxation Commissioner let Mr Dawkins off his taxation liability. The Taxation Commissioner found that there was no liability and for the honourable member to put it in that way is quite wrong.


Mr HOWARD —The honourable member is wrong.


The DEPUTY CHAIRMAN (Mr Rocher) —Order! There is no point of order.


Mr HOWARD —I will not withdraw my remarks. Everything that I said was absolutely correct. I welcome the fact that the discretion exercised, the let-out provided to the family company of the Minister for Finance (Mr Dawkins), will also be provided to other people who are in the same position.

The other matter that I wanted to mention is the pathetic and absurd attack made last night by the Minister Assisting the Treasurer. He claimed that our opposition to the legislation was to protect some friends. All I can say to the Minister is that if there were friends of mine around to be protected, they did not think that I had protected them with the legislation that I sponsored through this chamber last year. If the Minister has any evidence at all to back up that suggestion I can promise him that we on this side of the House will facilitate the bringing on of a substantive motion about the matter. No doubt I will wither under the attack from the Minister Assisting the Treasurer and he will lay bare my sinister involvement with all of these people who have been dodging revenue over the years. I am sure that he will be able to destroy my reputation with one of his characteristic and withering vituperative attacks. I think it will be a very celebrated debate and I look forward with very keen interest to hearing from the honourable member for Adelaide (Mr Hurford) who I really like very much and who is normally a very charitable gentleman. As the honourable member for North Sydney (Mr Spender) demonstrated, he was a bit short on argument; so he grabbed a fairly large brush labelled McCarthy and used it with gay abandon on the Opposition. I am sure that he did not really mean it. If he is true to his charitable form he will withdraw those scandalous imputations when he replies.

Finally, I bring together the basis of the Opposition's objection to this legislation, with the exemption of the anomalies provision which we will support . In substance what this legislation seeks to do is to extend that colloquial description of these taxation arrangements, namely bottom of the harbour arrangements, to cover companies which are not at the bottom of the harbour but are still alive. That is the fundamental contradiction of what the Government is going to do. That comment, better than anything else I have said, demonstrates the way in which the Government cannot sustain what it is trying to do. It keeps calling the legislation bottom of the harbour legislation but it wants to extend it, to perpetrate the colloquialism, to companies which are not at the bottom of the harbour but are still alive. If one takes out section 3 (12), if one alters the other tests that are contained in the legislation, one will have that result . That will be a travesty of the original intention of the legislation. It will deny plain English words their proper meaning and demonstrate the barrenness of the case which has been put forward by the Government.