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Wednesday, 3 December 1986
Page: 3277


Senator WATSON(4.31) —I move:

That the Senate take note of the paper.

The 1985-86 annual report of the Commissioner of Taxation is significant for its omissions rather than its inclusions and for the challenges that the Commissioner faces at this time. One of the unfortunate features of the past 12 months has been the entry of the Tax Commissioner into the political arena. I would like to draw on two particular cases: Firstly, in his introduction he stated that he welcomed the fringe benefits tax and the implications it would have for income tax cuts. I do not think that is a proper role for a public servant to act in and I think it is a very dangerous precedent for a public servant to enter into political debate. The more recent case was in respect of the Australia Card. I hope that this will be the last of these intrusions by a senior public servant, particularly the Taxation Commissioner because on the change of government his role as Tax Commissioner must become somewhat embarrassing.

I believe that the Australian Taxation Office, which is an independent statutory body charged with the administration of various taxation Acts, has come under widespread criticism from many quarters. The Tax Commissioner is not only facing problems in respect of new and complex legislation but also that is manifesting itself in a very low morale within the Taxation Office. There has been a high number of resignations and the office has even had to resort to calling back retired officers to assist in the administration of the Fringe Benefits Tax Act 1986. As I said, never before has the performance of this Office been under such widespread and often independent criticism.

I now draw attention to some of that criticism. Firstly, in August 1986, the Auditor-General said that there had been little effective action with regard to unpresented group certificates since this matter was identified as serious, which was many years ago. On page 3 of the report before the Senate it is stated that the Tax Office is an efficient organisation. This contrasts markedly with what the Auditor-General has to say. He said:

The failure to take action on unpresented group certificates is a continuing weakness in the PAYE system resulting in the failure to detect tax evasion.

If the system is to work properly, the Australian Taxation Office should do more to ensure that tax instalment deductions are correct and that group certificates enclosed in employees' returns are correctly assessed. It is also interesting to note that despite the plethora of amendments we have had in recent years, the Tax Commissioner is increasingly falling back into the traditional role of bringing up assessments. We have all these new things such as Part IVa, but increasingly he is relying on precedents of the Ramsay-type decisions and also on the old section 260. He has pointed out to successive governments that this really is an ineffective section but the point I am making is that increasingly he is now successfully applying that section. I would like to know why he was not applying that section years ago and chasing those cases through the courts.

Unfortunately, the system has continued to become more and more bogged down with complex legislation, despite the Hawke Government's pledge to try to simplify it. In addition, the Government has introduced amendments which increasingly put the burden of assessment on the taxpayer. Taxpayers increasingly are being asked to decipher reams and reams of tax law that would require a lawyer or an agent to unravel efficiently and effectively. The Government is proposing to introduce an Australia Card. The Auditor-General has also indicated problems in relation to the prescribed payments situation, because again that has not been administered properly. But one of the most disturbing features is the fact that increasingly the Australian Taxation Office is becoming a law unto itself. It is making laws that have not had legislative sanction, taking actions outside the law or which are incompatible with the relevant legislation. I believe that this is unfortunate.


The ACTING DEPUTY PRESIDENT (Senator Townley) —Order! The honourable senator's time has expired.