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Thursday, 14 May 1987
Page: 3284


Mr BRAITHWAITE(10.25) —I will not take the full 10 minutes; I just want to rise in support of my colleague, the honourable member for Parkes (Mr Cobb). What he said was basically a reflection of the feelings that I expressed during the second reading debate. The honourable member made a comparison between a criminal and the taxpayer, and I point out that the difference is that the criminal is allowed legal representation, apart from all the other rights that the honourable member mentioned. On this occasion, legal representation so far as the taxpayer is concerned, demands the right to be represented by his tax agent, who is the adviser and the person who can discuss properly the pros and cons with the auditor or the inspector at the time. To suggest that it is normal law, courtesy and equitable for a person who is an inspector under this clause to come in-and as I understand it, the High Court took the view that this type of thing was not provided for in common law; it is to be inserted as a special condition of our taxation law to bring it about-and for the taxpayer not to have that legal representation leaves the taxpayer open to many cases of abuse.

I would suggest that there would not be anyone in this chamber who, if faced with an order from an inspector, would not come out with a clean sheet, and I say that most sincerely. A couple of years ago in this place, before honourable members had to substantiate their travelling allowances, a number of honourable members would have placed opposite their income statement just their claim for the amount without any call for any justification, and I suggest that in many cases that blanket coverage would not have stood up to the audit test. Now a percentage of taxpayers are going to be sued on the basis of these audit checks, and they will be unfairly treated if they do not have legal representation.

It is important to realise what proposed new section 263 (3), which we seek to have deleted, will do. I mentioned earlier that this must be one of the first cases in history where a person who is about to be executed, as one might infer from an audit inspection, has to pay for his own execution. I go further than the provisions mentioned by my colleague to suggest that it would not be unlikely that the taxpayer would be asked to pay for the rope with which it is intended to hang him. There is no limit to the interpretation that can be put on the words: `Shall provide the Commissioner or the officer with all reasonable facilities and assistance for effective exercise of powers under this section'. What the effective exercise of powers under this section is would depend on the inspector at the time, and I come back to the point that many of these inspectors go out without the practical experience of knowing what they are about in an audit. I am sure some of them go out with the determination that their visit is going to be worth while because of the manner in which they harass the taxpayer for an admission of a liability that would not properly be there if they were represented by their tax agent. That brings up not only the liability for the tax that would be involved, but also the penalty involved.

The whole new section 263, as I understand it, is one that would not be fitting of the law as far as the criminal code is concerned, and yet we feel fit to give the Australian Taxation Office these dictatorial powers unobtainable elsewhere in common law. So I certainly agree with my colleague that this proposed new section at least should be omitted from the amendment.