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Thursday, 14 November 2002
Page: 6377

Senator MURPHY (2:49 PM) —My question is to the Minister for Revenue and Assistant Treasurer, Senator Coonan. The minister would remember the mass marketed managed investment tax schemes debacle and the difficulties that issue caused for many taxpayers. As we know, the ATO took the Bud Plan case to the Federal Court and won. This case was claimed by the ATO to be representative of the great bulk of taxpayer investments the ATO believed to be in breach of tax law. The minister would be aware that there have now been three further Federal Court cases, all of which have been won by taxpayers. These outcomes prove the ATO view—that all of the said schemes were the same—to be clearly wrong. In light of this, will the minister initiate an inquiry to examine these cases to determine whether the ATO's `Bud Plan equals all' approach has indeed been fair and equitable to the taxpayers involved in the many different schemes?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank the senator for his question. Senator Murphy, I do not think you are quite right in the way you have framed your question. The information I have here is that the Federal Court has now handed down three decisions in relation to typical mass marketed schemes and another decision in relation to a similar scheme. In three of the cases, the commissioner has been successful or partially successful, but it appears that each case is going to have to be decided on its merits. The commissioner is considering the implications of the issues on which he was not successful, but he is obviously not considering going back on his settlement offer in respect of the offer that has proceeded recently. However, the decisions do confirm that it is proper to at least consider the general anti-avoidance provisions in this context. Despite the court action, the commissioner proceeded with his settlement offer and in fact has, as you know, extended the deadline. The settlement offer took into account that many of the investors in the mass market schemes did have a good tax record, accepted advice from advisers and should have been aware of the tax risks.

The issue with respect to the court cases is that obviously they do need to be analysed very carefully, Senator Murphy; I think that is a fair point. But if you go through each of them—and it would take some considerable time to go through the issues of each of these cases—you will find that the distinguishing features are not ones that would clearly invite reconsideration and reissue of assessments. They are pretty technical cases and what might assist you—and I would certainly be prepared to do this if you are genuinely interested—is a briefing as to the consideration that has been given in respect of each case.

Senator MURPHY —Mr President, I ask a supplementary question. I thank the minister; I note that she said the cases needed to be analysed carefully because they are very technical, and I agree. That is the reason I asked the question as to whether or not the minister would initiate an inquiry. The cases are of a technical nature and I will take up the offer of a briefing, because I think this is an important issue. I am interested and have been interested in these cases for a long time. Again I ask the minister whether she will consider, or at least request her department to consider, a careful analysis of these cases to determine whether or not taxpayers have been treated equitably and fairly.

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Senator Murphy, I do not know that I can add much more to my earlier answer. Of course these cases have been very carefully considered. In that context, as I said in my earlier answer, you are welcome to approach my office to get a more detailed briefing. I do not think the issues will give rise to an inquiry, but obviously these matters have to be thought through and it would be simply pre-empting the position to give definitive answers before the commissioner has had an opportunity to properly analyse it and I have received proper advice in my office.