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Thursday, 12 December 2002
Page: 7899

Senator MARK BISHOP (2:26 PM) — My question is addressed to the Minister for Revenue and Assistant Treasurer, Senator Coonan. Can the minister confirm that the ATO's compliance program for 2002 announced yesterday includes cracking down on complex capital gains tax avoidance schemes? Can the minister outline what sorts of schemes are being scrutinised by the ATO? Do they include schemes where people falsely claim the sole and principal place of residence exception?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —What I can tell the senator about the compliance program for next year is that the commissioner has decided to release an outline of this year's tax office compliance program to provide the community with confidence that the tax system is being managed fairly and efficiently in an open and accountable way. It is important for the community to be informed of how the resources provided by the government to the tax office are used for collecting revenue.

In our self-assessment tax system, the tax office has to make choices about how best to direct its activities to address the areas of greatest risk. The compliance program identifies risks to our revenue system and the strategies which the tax office has under way to manage them across the range of taxpayer segments. The tax office continues to provide a high level of help and education to assist the vast majority of people who do the right thing. However, its focus has shifted to more active compliance, including verification activities, field visits and other audits. A key priority remains big business and other high-wealth individuals.

In the past five years the tax office's extensive audit program has netted an extra $2.64 billion for the community. This year, one in 10 businesses will be subject to some form of audit and more than 135,000 people will be required to confirm their tax deductions. The tax office will boost its GST compliance staff to around 350 and its serious non-compliance compliance investigations group to 300. Other high-profile risks which are receiving close scrutiny from the tax office during 2002-03 are aggressive tax planning, the cash economy, work related and rental property expenses, the correct reporting of capital gains and losses, and illegal tobacco and fuel substitution.

I am advised that this is indeed the first time that the commissioner has detailed in a single document the measures that the tax office puts in place to ensure the integrity of the tax system. The commissioner advises me that he intends to update and release the document annually. It is a very good initiative; it is one that I support. Neither I nor any senator—at least on this side of the chamber—would condone any evasion of tax. Under those circumstances, the detailed plan of the commissioner to focus on the areas that I have outlined, where it is thought that there might be some need for additional compliance, has not only my support but the wholehearted support of the government.

Senator MARK BISHOP —Mr President, I ask a supplementary question. I do not think the minister addressed the issue of residence, so I ask: can the minister confirm that the ATO announced yesterday that capital gains tax adjustments have resulted in a large proportion of the $2.3 billion in extra tax and penalties raised in 2001-02? Can the minister advise the Senate what proportion of this $2.3 billion relates to those exposed as falsely claiming exemption from CGT on the basis that a property is their sole or principal place of residence?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —That is information that would go way beyond any detail that you could possibly be expected to have without notice in any brief from the commissioner. Then again, the Labor Party are not interested in the detail; the Labor Party are interested in a smear campaign, and they are bitterly disappointed that, despite three weeks of trying to dish dirt and trying to find something, they have fallen flat on their faces because they are totally incapable of proving that I have any interest in a property at Clareville.