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Tuesday, 19 March 1985
Page: 416


Senator Dame MARGARET GUILFOYLE(5.48) —I support the comments made by my colleague Senator Peter Rae on behalf of the Opposition. As has been outlined by Senator Rae, we would support prospectively the provisions that are before us, but the Government is asking us to accept retrospectivity as a mentality in law making, and we are opposed to that retrospective mentality. We believe that certainty under the law is required by the citizens of this country. I think, at a time when there has been so much provision of review of administrative decisions and greater access to the law so that people are able to understand how the law affects them and what the law is, it is not timely to introduce a range of measures in a retrospective manner, which the present Government has done over the period of its office.

The Opposition, when in government, made known its attitude with regard to trust stripping. That was described by the former Treasurer in another place and has also been outlined by Senator Peter Rae. It was to the effect that, when it was made known to us by the Australian Taxation Office that there was a problem with regard to trust stripping of this kind, we would introduce legislation to make sure that that practice did not occur. The date on which we made the announcement was precise. The outline of our intention with regard to legislation was also precise, and that is why in this debate we are moving an amendment to the legislation; to put that date of the first announcement of the Government's intention in the legislation itself.

I support the amendment that has been foreshadowed by Senator Peter Rae, which will have the effect that I have mentioned, providing that the Bill should date to 12 May 1982, which was the date of the announcement, and not to 1 July 1980, which is the proposal of the present Government. It needs to be said that legislation of this kind should not have retrospective operation. In May 1982 the then Government was aware of the concern of the Australian Taxation Office to outlaw this practice. It was believed that, if the existing legislation did not give sufficient strength to the Commissioner of Taxation to deal with it in the way that he believed was equitable, further legislation would be introduced. For us now to deal with amendments to the various Acts and to date them back to a period in 1980, something about which there has been no prior announcement, is to support retrospective legislation in quite a naked form.

The date of 1 July 1980 has been prescribed in the legislation before us. Many people could argue that it should be some other date, but no announcement was made; we were simply told that the present legislation was inadequate. Therefore our early announcement is a reasonable starting point and will be supported, in general, by the community. I believe it was made perfectly clear by the Treasurer in 1982 that any trust stripping that went on after the date that he made this announcement would be struck down by the Commissioner either by the existing legislation or by legislation that would take effect from that date. It was of interest to me to see that information provided by the Australian Taxation Office shows that about $500,000 is all that would apply to activities which took place after 12 May 1982. This indicates that either the announcement had the intention that the then Treasurer had in his mind or the existing legislation enabled the Commissioner to act under it. Since the announcement in May 1982 a very small amount of tax funds has not been collected because of some defect in legislation or because it has not yet been determined whether tax could be collected.

We have made it clear, in dealing with the Bills before us, that we will support prospective legislation to give the Commissioner the additional strength that is required to deal with trust stripping of the kind covered in these Bills. I think prospective legislation would have greater support in the Australian community. It appears to me that retrospective legislation, particularly when related to taxation matters, has become one of the symbols of the prices and incomes accord between the present Government and the trade unions. Retrospective legislation will be used as part of the agreement. We have seen it in a number of forms since the present Government came to office. On occasions retrospective legislation has been changed by the Government. The Government is not consistent in its approach to retrospectivity or in the matters to which it wishes to apply the law retrospectively. In this instance it would seem to us that the Government has varied the starting point and wants it to be a couple of years earlier than the quite precise announcement made by the then Treasurer in 1982. It is now just a symbol of the agreement between the Government and the trade union movement.

Senator Peter Rae stated that the necessity for this legislation was not substantiated. I do not think an argument has even been put; it certainly has not been substantiated. During the second reading debate in the other place no statement was made by the Treasurer (Mr Keating) or anyone representing him to substantiate or argument the necessity for the legislation. Members of the Government's party who spoke in the debate showed little understanding of the necessity for the legislation or even what the legislation would provide.

We are dealing with retrospective tax legislation at a time when there is a very wide-ranging debate on the forthcoming tax summit. All kinds of matters are being talked about with regard to changes in tax, the collection of tax and the mix of tax. It seems very untimely to bring forth this retrospective tax legislation and any other retrospective tax legislation that the Government has in prospect. I believe that if changes in tax are to be put before the Australian people it is hardly proper to bring in one package of retrospective tax legislation at this stage and to threaten other retrospective tax legislation at a time when the whole of the mix of tax and the tax collection arrangements in this country are to be reviewed at the tax summit. However, be that as it may, the tax summit is another argument for another time. Retrospective tax legislation of this kind does not have wide support in the Australian community just as any retrospective legislation which changes the law after the event does not have support very often in any kind of democracy. In a letter dated 1 March the Taxation Institute of Australia pointed out to the Treasurer:

We accept that there is less scope for criticism when legislation operates retrospectively to the date of an announcement and where that legislation (which should be promptly introduced) follows the terms of that announcement.

The former Government announced its intention to introduce a Bill on 12 May 1982. In the view of the Taxation Institute the Bill should, accordingly, have not applied retrospectively beyond that date. In other words, we had support from the Taxation Institute for an announcement by the Government of the day to be followed by legislation. On that basis we will support the passage of the Bills. The retrospective element-if it can be classified in that way-should not apply prior to the date that the Government made an announcement that it was its clear intention that legislation would be introduced and that the law would then operate accordingly. I support the comments made by Senator Peter Rae on behalf of the Opposition. I commend the Opposition's amendment to honourable senators.

Debate (on motion by Senator Grimes) adjourned.