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Monday, 26 May 2003
Page: 14975

Mr Murphy asked the Attorney-General, upon notice, on 6 February 2003:

(1) Is he able to say what duties a legal practitioner has to the law, within the context of a legal practitioner's responsibilities as a model citizen adhering to the law both in fact as well as in principle; if so, what are those duties; if not, why not.

(2) Is he able to say whether the conduct of the type being exhibited in the legal profession of legal practitioners such as the cases of (a) well-known barrister, Mr Stephen Archer, who is scheduled to again come before the Federal Court Sydney Registry for full public examination on 19-20 February 2003 and (b) Mr John Cummins QC who did not lodge a tax return for 45 years and whose case was handed down in the Federal Court on 5 December 2002, fulfils a minimum standard of conduct acceptable such as to maintain the good reputation and public confidence in the legal profession; if so, why; if not, why not.

(3) What action will he take to demonstrate to the people of Australia that the Howard Government is serious in cracking down on tax rorts employed by members of the legal profession.

Mr Williams (Attorney-General) —The answer to the honourable member's question is as follows:

(1) A legal practitioner has the same duty that all citizens have to comply with the law. In addition, legal practitioners have obligations to the courts in their capacity as officers of the court. All States and Territories have codes of conduct for legal practitioners. The enforcement of those standards of conduct is a matter for the relevant State or Territory legal professional disciplinary body and Supreme Court.

(2) (a) This is a matter for the NSW Bar Association as it administers the code of conduct for Barristers in NSW. I understand that it has dealt with this matter.

(b) The relevant barrister's conduct in this case is also a matter for the NSW Bar Association.

(3) The Government has introduced changes to bankruptcy law aimed at preventing people using bankruptcy in an improper way. Amendments to the Bankruptcy Act 1966 contained in the Bankruptcy Legislation Amendment Act 2002 will allow Official Receivers to reject a debtor's petition where it appears the debtor can afford to pay their debts and the petition is an abuse of the bankruptcy system. Other changes include strengthening of the trustee's powers to object to the discharge from bankruptcy of uncooperative bankrupts after the standard three year bankruptcy period.

In relation to the issue of high income earners using bankruptcy to avoid paying tax, following consideration of a report by an agency taskforce, the Government released an issues paper on possible further changes to bankruptcy and family law to address these issues. The issues paper was open for comment until 20 February 2003. Comments received are being considered and will assist the Government in finalising its approach to this issue. The Government has also taken a range of other measures to deal with this issue including:

· reviewing penalties under the Taxation Administration Act;

· examining options to strengthen bankruptcy law to help bankruptcy trustees to recover assets, including hose not in the bankrupt's name but acquired using their income.

· departments and agencies have been asked to take steps not to brief counsel who have used insolvency as a means of avoiding tax.