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Monday, 8 October 1984
Page: 1432

Senator WALSH (Minister for Resources and Energy)(10.05) —I am not sure where the Opposition got its advice in drafting these amendments. I am advised that the amendments would have a somewhat perverse effect. I am advised that Opposition amendments Nos 1 and 2 would delete the defence available to a person charged with certain offences against the taxation law; that is, the defence that the person did not know the essence of the offences and could not reasonably have been expected to know, those offences being: Firstly, the making of false or misleading statements; and, secondly, keeping records incorrectly. Those are strict liability offences; that is, the person will be guilty and liable to a penalty of a fine of $2,000 for a first offence and $4,000 for a second offence, regardless of the person's knowledge or intent in committing the offence. In those circumstances the Government believes that it would be draconian to delete the defence that is being provided; that is, that in committing the offence the person did not know and could not reasonably have been expected to know that the statement was false, misleading and so on.

The defence of lack of knowledge is provided in relation to similar offences under other Acts. Strict liability offences prevent taxpayers from avoiding their taxation responsibilities by claiming inadvertence or lack of knowledge and are therefore an essential element in obtaining satisfactory compliance with the law. Nevertheless the Government is of the view that it would be an oppressive step to abolish completely the defences contained in proposed new sections 8K (2) and 8L (2).

The third Opposition amendment relates to the liability of officers of corporations which commit tax offences. The amendment would remove the defences being provided that the company officer did not aid or abet in the act of omission of the corporation constituting the offence and was not knowingly concerned in or party to the offence. The effect would be to leave proposed new section 8Y to impose liability for a corporation's offence on any person who was concerned in or took part in the management of the corporation, however remote from the act constituting the offence that person might be. In that respect amendment No. 3 is similar to amendments Nos 1 and 2 and is regarded by the Government as being oppressive in the extreme.

Insofar as the opposition claims concern that proposed new section 8Y would create a reverse onus of proof on corporate officers, the amendment is astray. It would impose an absolute liability, with no defence at all, on every person who was involved in the management of a corporation that committed an offence. The Law Council of Australia might be somewhat surprised when it finds out the amendments that the Opposition has proposed. The fourth amendment would delete proposed new section 8ZL of the Taxation Administration Act. That proposed new section would enable prosecutions for taxation offences that do not carry a gaol sentence to proceed on the basis that matters adverted to and contained in the information, claim or complaint of the prosecution are treated as prima facie evidence of the matter averred. I am advised that there is nothing new in that.

Proposed new section 8ZL will re-enact substantially what is now contained in section 243 of the Income Tax Assessment Act and similar provisions in many other laws which have been in use for many years. Without the averment mechanism it would be impossible to carry out efficiently prosecutions against tax offences. Each year there are approximately 60,000 prosecutions for breaches of the tax law. If averment procedures could be availed of, the Commissioner would be required to prove by conventional means-that is, oral evidence from officers- each element of prescribed taxation offences. For example, in the simple case of a person prosecuted for failure to lodge a return the Commissioner's officers would need to be present in court as witnesses to give evidence to establish that the taxpayer had not lodged in any taxation office in Australia a return for the particular year of income. The amendment shows a lack of understanding of the time and resources required to prosecute 60,000 taxation offences without averment procedures. In short, the court system would not be able to cope and many of the Commissioner's officers would spend much of their time attending court instead of being engaged more productively and, I suggest, more socially desirably in ensuring compliance with the law.

Question put:

That the amendments (Senator Messner's) be agreed to.