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Wednesday, 11 November 1964

Senator McKENNA (Tasmania) (Leader of the Opposition) . - The Opposition is not prepared to accept the amendment either, perhaps for an additional reason to those given by the Minister for Civil Aviation (Senator Henty). At the moment the position is that most of the decisions of the Commissioner are not challenged until after an assessment is made and delivered. The moment an assessment is made a taxpayer may lodge an objection with the Commissioner. If the Commissioner disallows the objection then the taxpayer has the right, within a limited time, to request the Commissioner to refer the decision either to the administrative board, to which Senator Wright referred- a Taxation Board of Review - or to treat the objection as an appeal and forward it either to the High Court or to the Supreme Court of a State.

The termination of the matter at the option of the taxpayer is either in the Taxation Board of Review - except in the appealable circumstances mentioned just now by Senator Henty - or in the Supreme Court of a State or the High Court of Australia. So the end of the matter is not necessarily a decision made by an administrative officer or a decision made by an administrative board. There is under the .present law an end result in a court - the highest courts in the land - if the taxpayer wishes to go to a court.

Senator Wright - The honorable senator knows that on an appeal to a court the court can have nothing to do with the discretion that has been exercised.

Senator McKENNA - I should think so. I think that the position is that under section J 93 the Board of Review is given exactly the same powers and functions in arriving at an assessment or a conclusion as the Commissioner is given. The Act provides that the powers and functions of the Commissioner in making assessments, determinations and decisions shall for all purposes be deemed to be the assessments, determinations, or decisions of the Commissioner.

Senator Wright - A Board of Review can substitute a discretion but a court of appeal cannot enter into consideration of a discretion except on the basis which the Minister mentioned, that is as to whether the decision is capricious

Senator McKENNA - Or that the authority refrained from exercising it. I realise that. I think that sub-section (2.) of the proposed amendment would strike down the whole purpose of this Act. lt goes back to the argument that we had on the earlier proposal. The amendment provides that a court shall determine whether such discretion has been exercised on any ground other than the criterion whether the relevant transaction was entered into with the intent to evade income tax and so may declare the decision or determination of the Commissioner or board invalid. For a start, that would strip away from the Commissioner the various obligations that are cast upon him by some sections of the Bill requiring that in exercising his opinion he have regard to factors, many of which are quite beneficial to the taxpayer.

Senator Wright - This appeal is only by a person aggrieved. A person does not appeal against a discretion exercised in his favour.

Senator McKENNA - The discretion could be exercised in his favour by the court. We come back to the original base of this legislation which is the reason why the Opposition supports it. I have explained why the Opposition is supporting a Bill in this unusual form. It seems necessary to keep on repeating it. The Bill is directed at people who, within the law, by trickery and subterfuge - to use the words of the Treasurer - have escaped taxation. The net is cast widely because of the practical impossibility of a draftsman being able to describe every conceivable circumstance that might arise. That would bc completely impossible.

This Bill is directed at the relatively few in the more affluent section of the community. However, - it does gravely concern the ordinary taxpayer who will not be taking any of these evasive or avoidance actions but who will have to pay more by reason of the people who escape the net of the Commissioner of Taxation contrary to the spirit, at least, of the laws of this country. I put it that Senator Wright is seeking to give a double appeal on the question of discretion.

Senator Wright - No.

Senator McKENNA - Well, it obviously means that.

Senator Wright - No. It means a final appeal to a court of law.

Senator McKENNA - I say a double appeal because under the present law there is the alternative appeal to the Taxation Board of Review or to a court. The honorable senator has included in sub-section (1.)-

Any person aggrieved by a decision or determination of lbc Commissioner or a Board of Review . . . on the question of a discretion, may -

Senator Wright - It only enlarges the base of appeal to the court.

Senator McKENNA - I recognise that but I just make the comment. I notice that the honorable senator includes the Commonwealth Industrial Court. That Court now seems to be the repository of all the spare bits and pieces. My feeling is that whatever merit there would be about an appeal in paragraph 1 on discretions it is completely negated by sub-section (2.) of the honorable senator's proposal. That would, in effect, wipe out the whole purpose of the Bill and leave us back where we were on the question of whether or not the matter is within the old law. We would get right back to the jungle which this Bill is directed at. Speaking entirely for the ordinary taxpayers of this country I can say that they will be very concerned to sec that the people who have avoided taxation at the rate of £14 million a year are rounded up, and they will be no more tender in their consideration of the plight of those people than I personally am or than the Opposition is.

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