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The Howard/Fraser recoupment tax



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NO. 82/119 CANBERRA 5 October 1982 PRESS R E L E A S E

THE SENATE

THE HOWARD/FRASER RECOUPMENT TAX

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Statement by Senator Don Chipp - Leader of the Australian Democrats

On Thursday, 23 September, the day before Parliament rose for a two week recess

Mr Howard introduced four bills which, together, seek to recoup from shareholders

the company tax evaded through 1 Bottom—of—the—Harbour 1 schemes.

The legislation is under scrutiny by the Australian Democrats and pending the

results of this examination this statement represents my personal view on the

issues raised by the bills. .

Mr Fraser has souqht support for these bills, which in Mr Howard's words

" __ contains an element of retrospectivity," by arguing that fairness

demands that all people pay their share of tax. Further, he argues that people

who have wrongfully benefited by receiving and retaining money which should have

been paid to the Taxation Commissioner must.be made to disgorge that money even now.

So far Mr Fraser has not provided any evidence that these people cannot be

assessed for tax and/or prosecuted for their wrongful participation in

'bottom-of-the-harbour' schemes on the basis of the law existing at the time

of their 'offences' prior to the enactment of the 1980 Crimes (Taxation Offences)

Act. . . ' .

In fact, the Government refuses to table the very documents requested by the

Senate which could establish this.

I need to be convinced that the new legislation is in fact necessary and is

not just a political smoke screen engineered by Mr Fraser to cover up

his government's total·- neglect which has allowed these schemes to flourish and

which has cost Australian taxpayers thousands of millions of dollars and which

has squeezed the funds available for health, education, welfare and other

community services. · . .

The Democrats will continue to press for the disclosure of these documents which

the government is withholding from Parliament and will take steps to bring

Ministers as well as their public servants before the Senate to achieve this.

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These are provisions which include the promoter's fee in the formula defining

the shareholder's liability, the short time (30 days) allowed to pay what could

be fairly large sums and the increased rate of penalty interest (20% instead of 10%)

Subject to insertion of an 'innocence' clause as described above I would seek to

ensure that the bills are amended to avoid any invalidation on constitutional

grounds. Some doubt mus.t remain whether the Government's legislation as a whole

could be caught by S. 51 (XXXI). I believe that this would be unfortunate but

the risk that this might happen makes me all the more determined to press for

the disclosure of documents which may establish an existing legal remedy and

thus avoid the need for this legislation which is essentially a political

manoeuvre. . .

To the extent that Mr Fraser is genuine in his pursuit of tax evaders on grounds

of fairness the Democrats welcome his initiatives.

Subject to the protection of the innocent I will support action in other

areas where tax. has been evaded and trust that Mr Fraser will not review all

his policies and plan for his future actions on the basis of social justice -

it will be guite a change.

FOR FURTHER INFORMATION CONTACT: . .

Senator Don Chipp . (03) 61 3137 (BH) (062) 88 7623 (AH)

Sid Spindler (03) 61 3791 (BH) (03) 859 5607 (AH)