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Thursday, 19 September 2002
Page: 6675


Mr COSTELLO (Treasurer) (9:31 AM) —I move:

That this bill be now read a second time.

This bill will establish an independent statutory office of Inspector-General of Taxation. Establishing the Inspector-General will fulfil the government's election commitment to strengthen the advice given to government in respect of matters of tax administration.

The Inspector-General will provide a new source of independent advice to the government. The role will act as an advocate for all taxpayers, including Australian business and will provide an avenue for more effective conflict resolution than currently exists.

The bill provides for the appointment of an Inspector-General of Taxation by the Governor-General for a fixed term of up to five years. The terms of appointment and strict prerequisites for dismissal will ensure that the Inspector-General enjoys a high degree of independence.

The Inspector-General will be able to conduct reviews of tax administration and invite submissions from the public on a matter that is under review. The Inspector-General may initiate a review on his or her own initiative and the Treasury ministers will be able to direct the Inspector-General to conduct a review.

The bill provides for the Inspector-General to have strong powers to compel production of documents by tax officials and to take evidence from tax officials where this proves necessary. This will ensure that systemic tax administration issues can be rigorously pursued and resolved.

However, the bill will not compromise the absolute independence of the Commissioner of Taxation in the administration of the tax laws. The Inspector-General will not be able to direct the Commissioner other than to require the disclosure of information for a review.

The bill will not affect the powers or functions of other taxation review agencies, including the Ombudsman. The Inspector-General is required to consult with the Ombudsman and the Auditor-General at least once a year. The consultation process is intended to avoid duplication of effort in reviews of tax administration but will not compromise the Inspector-General's discretion to determine his or her work program.

This bill will not impose any additional obligations on taxpayers nor increase their compliance costs. The compulsive investigative powers of the Inspector-General will not extend to taxpayers, since the Inspector-General will be reviewing systemic tax administration issues and not the tax affairs of individuals or businesses. The bill prevents taxpayers from being identified in reports by the Inspector-General.

I would like to acknowledge the advice and recommendations the government received from the Board of Taxation. I would also like to thank those who participated in the public consultation process convened by the Board of Taxation—taxpayer representative groups, the tax advising professions, businesses and individuals. I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Albanese) adjourned.