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Thursday, 26 February 1987
Page: 737

Senator CROWLEY —Mr President, I present the second report of 1987 of the Senate Standing Committee for the Scrutiny of Bills concerning the Aborigines and Islanders (Admissibility of Confessions) Bill 1986, theCollective Agreements (Corporations) Bill 1986 and the Taxation Laws Amendment Bill (No. 5) 1986. I also lay on the table Scrutiny of Bills Alert Digest No. 2, dated 25 February 1987.

Ordered that the report be printed.

Senator CROWLEY —by leave-I am pleased to inform the Senate that at this morning's meeting of the Standing Committee for the Scrutiny of Bills I was elected to chair the Committee in succession to Senator Tate. On behalf of the Committee I should like to take this opportunity to place on record the Committee's appreciation of the valuable service rendered by Senator Tate as the foundation Deputy Chairman of the Committee and its Chairman between 1983 and 1986. The late Senator Missen and Senator Tate have set a high standard as chairmen of the Committee, and as the first non-lawyer to chair the Committee I hope to follow in the path they have charted for the Committee. There is a further statement relating to matters raised in the report but in view of the time I seek leave to incorporate it in Hansard.

Leave granted.

The statement read as follows-

In that role I wish to draw the attention of the Senate particularly to the comments of the Committee on the Taxation Laws Amendment Bill (No. 5) 1986 in the report which I have just presented. Two clauses of that Bill make changes to the Income Tax Assessment Act 1936 which are retrospective to the dates on which the respective proposals to make those changes to the law were announced. In neither case was the announcement made to the Parliament but presumably by way of a Press conference or Press release.

The Committee has stated in the past that it recognises the special conventions associated with the backdating of certain changes to the taxation laws to the date of the announcement of the proposal to make the relevant change, for example in the Budget statement. However the Committee has repeatedly drawn attention to cases where changes to the taxation laws have been made retrospective to the date of some ministerial announcement, not made to the Parliament, but made by way of a Press release or a Press statement.

So far as the Committee has been able to ascertain, this practice of announcing a prospective change to the law to the Press with the promise that the subsequent legislation will be retrospective to the date of the announcement was first used in 1974 by the then Treasurer, Mr Crean. On that occasion the legislation to implement the proposal was not in fact introduced before the change of government in November 1975. At the time the justification advanced for the making of such retrospective legislation was the need to close loopholes in the taxation law, a justification which was also used for such legislation by Mr Lynch and Mr Howard as Treasurers under the previous Government. However from the time when the Committee first noted this practice in its First Report of 1984 in relation to the Income Tax Assessment Amendment Bill (No. 5) 1983 it has become increasingly prevalent to the point where it now seems to be the almost invariable practice of the Taxation Office to announce changes to the law in this way with the promise of retrospective legislation introduced many months after the original announcement.

In the past year the Committee drew attention to examples of such `legislation by Press release' in its Eighth Report of 1986 in relation to the Taxation Laws Amendment Bill 1986, in its Ninth Report of 1986 in relation to the Taxation Laws Amendment Bill (No. 2) 1986 and in its Eighteenth Report of 1986 in relation to the Taxation Laws Amendment Bill (No. 4) 1986. It now appears that the practice is being extended to fields other than taxation law, most obviously in the case of the Government's announced proposal to change the television station ownership rules in the Broadcasting Act 1942 but also in the Aboriginal Land Rights (Northern Territory) Amendment Bill 1986 on which the Committee commented in its First Report of 1987, presented last week.

The practice of `legislation by Press release' is something to which the Committee takes objection on a number of grounds. In the first place it carries with it the assumption that citizens should arrange their affairs in accordance with announcements made by the executive rather than in accordance with the laws made by Parliament. The practice treats the passage by the Parliament of the necessary retrospective legislation `ratifying' the announcement as a pure formality. It places the Parliament in the invidious position of either agreeing to the legislation without significant amendment or bearing the odium of overturning the arrangements which many people may have made in reliance on the ministerial announcement.

Secondly, quite apart from the debilitating effect of the practice on the Parliament, it leaves the law in a state of uncertainty. Those such as lawyers and accountants who must attempt to advise their clients on the law are compelled to study ministerial announcements to ascertain what the law is. As the Committee noted in relation to the Taxation Laws Amendment Bill (No. 2) 1986 in its Ninth Report of 1986, one announcement may be modified by a subsequent announcement. The legislation when introduced may differ in significant details from the terms of the announcement. Finally there is always the possibility, as occurred with Mr Crean's 1974 announcement, that the Government will lose office before it can implement the announcement and that the new Government will not proceed with the proposed change to the law.

The Committee is aware that the Law Council of Australia and various chartered accountants have expressed similar concerns in relation to the increasing practice of `legislation by press release'. The Committee concedes that the making of an announcement of a proposal to change the law with the promise of retrospective legislation to follow may be justified where swift action is necessary to close a loophole which would otherwise lead to a significant loss of revenue. Even then the Committee would suggest that any such announcement should be made to the Parliament so that it may be the subject of debate, and that the period of retrospectivity should be kept to the absolute minimum. However the Committee condemns in the strongest terms the practice of `Legislating by Press release' as a matter of routine. I commend the report to the Senate.