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Thursday, 31 May 1984
Page: 2200


Senator COATES —On behalf of the Standing Committee on Finance and Government Operations I present the report on the Income Tax Assessment Amendment Bill (No. 2) 1984 together with the transcript of evidence.

Ordered that the report be printed.


Senator COATES —by leave-I move:

That the Senate take note of the report.

The Income Tax Assessment Amendment Bill (No. 2) 1984 is the Government's cherry picker tax avoidance Bill providing for retrospectivity to 1 July 1977 as distinct from Senator Jack Evan's Bill passed by the Senate which provided for retrospectivity to 7 December 1983. The Bill was referred to the Committee to examine the need for retrospective legislation to counter tax avoidance which is associated with misuse of employee superannuation funds.

Information was sought in a public hearing on the revenue loss as a result of these schemes, the number of schemes identified to date and the action taken by the Commissioner of Taxation to recoup revenue under existing provisions of the Income Tax Assessment Act. To the extent possible in the short time available, the Committee has obtained information on these questions. In evidence to the Committee the Commissioner indicated that current remedies were 'so uncertain that some legislation is required to give certainty to the situation'. The scheme is one of those which would clearly fall within the category of 'blatant and fraudulent', thus justifying retrospectivity. The Commissioner has so far identified 70 cases of abuse of the taxation law using cherry picker schemes, these cases occurring in every year going back at least to 1978-79, including the largest case in that year, amounting to a total of $16m identified so far, including $7m in the 1978-79 year. Based on this information the recommendation of the Committee is that retrospectivity is justified and that the Income Tax Assessment Amendment Bill (No. 2) 1984 be passed by the Senate.

If this recommendation is rejected by the Senate the Committee has recommended that the Bill lie on the table for a period of not less than 12 months to enable the Commissioner of Taxation to pursue the matter of taxes avoided by the use of section 23F superannuation funds through the courts using the existing provisions of the Income Tax Assessment Act. I would point out that there are minority reports attached to the report indicating dissents from recommendation 1 but supporting recommendation 2.

Standing Committee on Finance and Government Operations

Standing Committee on Finance and Government Operations

Standing Committee on Finance and Government Operations

Standing Committee on Finance and Government Operations

Standing Committee on Finance and Government Operations

Standing Committee on Finance and Government Operations