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Wednesday, 3 December 1986
Page: 3251


Senator BROWNHILL —Will the Minister representing the Treasurer confirm what he told the Senate yesterday about the Taxation Commissioner's treatment of income received in the form of travel allowance, that is, that a travel allowance can be paid to someone not living away from his or her normal place of residence, and that there will be no check by the Taxation Commissioner as to whether the recipient actually travelled at all?


Senator WALSH —I did not say any such thing yesterday, of course. That is the first response. I have, however, noted that an extract from Hansard has been peddled around the Press Gallery by Senator Chaney in what can only be described as a fraudulent misrepresentation of what was said. He managed to con the Australian Broadcasting Corporation into repeating it. These are the exact words:

The Tax Commission does not require substantiation of travelling allowance.

That, of course, was in respect of the very specific context of the travelling allowance paid to the Treasurer. It also applies to travelling allowance received by any other member of parliament, some of which, if the circumstances were fully investigated, I suggest would be somewhat embarrassing to the recipients of them. Having dealt with that, I have advice on the question of travelling allowances. Firstly-this is a public document which I think has already been published-the Tax Commissioner's ruling No. 2327, which was issued on 27 June this year, for taxpayers in general lays down that as from 30 June 1986, in other words prospective application only, in respect of employment related expenses documentary evidence of the expense will be required to be obtained and produced by the taxpayer. Within the same ruling there are two qualifications to that, the first of which because it is concise I will quote in full:

Against that background, where a travel allowance paid by an employer does not exceed rates of travel allowances set for members of the Australian Public Service (APS), the travel allowance will be treated as reasonable.

A further qualification in paragraph 7 of the ruling states:

In line with the principles laid down in paragraphs 3 and 4, therefore, daily travelling allowance paid to employees that do not exceed allowances set by the Remuneration Tribunal for equivalent salary ranges-

and so on. In respect of the context in which the Opposition has raised this, that ruling has clearly absolutely no relevance to Mr Keating's 1984-85 or 1985-86 tax returns and nor does it seem to me to have any relevance to Mr Keating's tax return for the present financial year or to that of any other member of the Parliament because of the qualifications in paragraphs 4 and 7 of that ruling which I have read. I do not have to fraudulently quote out of context in the way that the Leader of the Opposition has done.


The PRESIDENT —Order! I ask the Minister to withdraw that remark.


Senator WALSH —Very well, Mr President; I withdraw. I have received official advice from the Commissioner of Taxation relevant to allowances paid to members of parliament in accordance with determinations of the Remuneration Tribunal. I quote:

The allowances paid to members of parliament are fixed by the independent Remuneration Tribunal. The rates of allowance are set on the basis of a reasonably based appraisal of the costs that members can be expected to face by reason of their having to carry out duties in Canberra. Such costs are, by and large, deductible for income tax purposes. Against that background, the general practice has been to accept claims for deductions up to the amount of the allowance without detailed vouching. This continues to be the case in the context of the substantiation rules.