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Wednesday, 3 December 1986
Page: 3278


Senator ROBERT RAY(4.36) —We have just heard Senator Watson. This has been a long awaited debate and I thought we would have had a slightly more high powered contribution. Senator Watson has first of all criticised the Commissioner of Taxation for what he regards as entering the political arena. I think that is an unfair criticism. If he wants public servants to have no views whatsoever, that is his point of view and not mine. I believe that the Tax Commissioner is charged with protecting the integrity of the tax system and I can understand his frustration at seeing the whole taxation base potentially erode in this country. It was potentially eroding in the area of fringe benefits tax. Higher income groups in this country were avoiding their proper tax responsibility by putting together with the bosses tax packages that included all sorts of fringe benefits, be it entertainment allowances, free use of cars or whatever else, all non-taxed.

What it basically meant to the rest of the community-not that the section of the community that honourable senators opposite represents would care about it-was that PAYE taxpayers were carrying an unreal burden of taxation in this country and they had the perception that this tax system was not in any way fair; not when someone who may have been on a nominal income of above $50,000, $60,000 or $70,000 a year was taking that income in direct money terms, say $35,000, and getting a nice negotiated package well and truly above that that included all sorts of perks and lurks. It was not just the damage that it was doing to the existing system, it was the potential damage or the rate of increase at which higher income employees were taking fringe benefits that would have eroded entirely one of the major tax base areas in this country. I can understand any commissioner being particularly annoyed with that process. I do not recall the Taxation Commissioner criticising the Opposition in this regard.

Let us move, secondly, to Senator Watson's comments on the Australia Card, where the Opposition has a slightly stronger case. I think the Commissioner should have been a little more judicious in his remarks about support for an Australia Card because, quite obviously, it is not just a tax issue in the political arena. The objections to the Australia Card in some cases are based on civil libertarian concerns and in other cases on opportunistic reasons in my view; nevertheless, there are a wide range of views on the Australia Card and a wide range of applications. I can also understand the Commissioner's concern that the one area that the Opposition, when it was in power-Government has also had difficulty-had great difficulty in attacking was tax evasion by people who simply do not pay tax. It is a major problem. We may be able to touch it by going in to the prescribed payments area, but even in the inquiry that this Senate had into that tax, many other areas were obviously not touched such as people with two jobs working under false names. There is a whole range of areas, that possibly the Australia Card will be able to corral, and meaning a great increase in government revenue.

Senator Watson talked about the Tax Office not working efficiently enough. I remember that at the Estimates Committee C hearing in 1982 evidence was given by the Tax Office that the previous Fraser Government had failed to fund the Tax Office and failed to staff it properly. It gave us calculations as to how much revenue was forgone. It was only under the sort of pressure that increased resources, via the Estimates Committee report, were made available to the Commissioner of Taxation so that he could do his job properly.

Senator Watson said that the Auditor-General had criticised the Tax Office for not chasing up certain group certificates and admitted that this had been going on for many years. I agree that that matter will have to be addressed, because the tax system can never be perceived to be unfair in any way. I am happy to get up here at any time and defend this Government's record of trying to reform the tax system because throughout we have tried to put equity into the system. We have not worried about protecting some small vested interests in the community, or alienating them in any way. I admit that we may eventually lose office by reforming the tax system but it would be worth it because the one thing this country needs is a fair system.

The other area on which I would lay some blame for this whole tax matter is the High Court of Australia and some of its very iconoclastic rulings. It now seems that in future we may get more consistent rulings and the Tax Office will not be so frustrated that it does not even take any action.


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