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Tuesday, 2 December 1986
Page: 3145

Senator MESSNER —My question is addressed to the Minister representing the Treasurer. I refer the Minister to the answer to me yesterday that it was:

. . . most unusual, if not unprecedented, for any pay as you earn taxpayer who is entitled to a refund but who is late in lodging a return to have any penalty imposed.

How does that stand up against the case quoted by Senator Collard on Friday in which a taxpayer, who believed he was entitled to a refund, was prosecuted and fined for not lodging his return? I might interpolate that since that question was asked, quite a number of people have called members on this side of the House to repeat experiences of a similar kind. Will the Government ask the Commissioner of Taxation to review that case and any others dealt with in a similar way, in view of the fact that the Treasurer, who failed to lodge a return for 15 months, never received a summons, never went to court, and was obviously treated vastly differently from others?

Senator WALSH —Senator Messner's reference to the case cited by Senator Collard, or perhaps more accurately the allegations made by Senator Collard, in Senator Messner's own words came from someone who believed they were entitled to a refund. Senator Messner has not told us whether that person in fact got a refund.

Opposition senators interjecting-

Senator WALSH —It is like being in the chook yard.

The PRESIDENT —Order! I ask the Senate to settle down and I ask Senator Walsh to respond to Senator Messner's question.

Senator WALSH —It is certainly unusual, I am informed, for a person who was late submitting a return but who was also entitled to a refund-not thought he might have been entitled to a refund but was entitled to a refund-to be prosecuted. However, the Commissioner, I understand, exercises some discretion in this matter as he exercises his discretion on many features of the taxation law.

Senator Walters —It all depends who it is.

Senator WALSH —That is right up to a point, Senator Walters, because if the taxpayer concerned has a long standing, clean record with the Taxation Office, the Commissioner is likely to overlook without prosecution such technical breaches. If, however, the person concerned has a long and scungy record with the Taxation Office, like for example half the members of the Western Australian Liberal Party Finance Committee have, it would not surprise anybody if the Commissioner were to levy some penalty for what might otherwise be considered a technical breach by a taxpayer who had a long record of complying with both the spirit and letter of the taxation law.

If the Opposition wants to pursue its allegations that some people get special treatment, there is, as I said yesterday, in every State what is colloquially known as a VIP section of the Taxation Office which keeps a special eye on a number of prominent people in public life and outside public life. Senator Sir John Carrick asked me why that was so. I am not sure why it is so, but he should have asked that question for seven years he was in government because it existed throughout that entire period. Some people might see the existence of such a unit as being something to provide favoured treatment to particular people. It can, however, be seen the other way, and that is that the unit keeps an eye on particular people to subject them to more scrutiny than taxpayers who do not hold public positions or are in other ways prominent would receive.

Senator MESSNER —I ask a supplementary question. In light of the Minister's reply to the effect that he apparently believes that some individuals who have a bad record with lodgment of returns become more heavily scrutinised by the Tax Office, would he say that in the case of the Treasurer, where there was a failure to lodge a return for the 1985 taxation year and a failure to lodge a return for the subsequent financial year, there should have been issued a summons against him immediately following 31 August 1986 for the lodgment of his 1986 return? If that did not happen, why not?

Senator WALSH —On the question of the facts, Senator Messner has got them wrong. I did not say that people who had a bad record were subject to special scrutiny. In the context of the so-called VIP sections of the Taxation Office, I said that people who are public officials or hold important positions in public life or are otherwise important--

Opposition senators interjecting-

The PRESIDENT —Order! There are far too many interjections.

Senator WALSH —Particularly from the `Hibernator', Mr President. I said that people who are in prominent positions might have their returns scrutinised by the VIP section. The question about those who have a scungy record over a long period, like half the members of the Western Australian Liberal Party Finance Committee, related to whether the Commissioner would seek to impose a penalty on somebody who had technically breached the law. They are two quite separate issues.

If the Opposition is so interested in having the law fully applied on every conceivable occasion and maximum penalties extracted and of the law being absolutely enforced, I suggest it should start by finding out who stole the mail. The Leader of the Opposition turned up with a photocopy-not a file duplicate but a photocopy-of the original of a letter posted to the Treasurer by the Deputy Commissioner of Taxation in New South Wales; a photocopy of which, which was never received by the Treasurer, fell into the hands of the Leader of the Opposition or fell off the back of a truck, which was the way he evaded the question. Somebody stole that letter, somebody took a photocopy of the original and, through one or more intermediaries, it finished up in the hands of the Leader of the Opposition. If the Opposition wants to pursue criminal activity and secure prosecutions for such activity, I suggest it put its Leader on the stand and ask him where he got that stolen letter.