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Thursday, 12 December 2002
Page: 8113


Senator COONAN (Minister for Revenue and Assistant Treasurer) (5:45 AM) —I note the agreement between the Labor Party and the Democrats in respect of amendments (1) to (8) and (12). I wish to make a few comments about that before the matter is put to the vote. Firstly, in respect of amendment (1), the government does not support this amendment, because the commencement provision in an act of course must be both clear and unambiguous so that it can be determined legally whether an act has commenced. The amended clause does not meet this fundamental requirement. In particular, since the appropriation to the inspector-general is through the budget process and part of the Treasury portfolio appropriation and, since it would be open to the inspector-general to seek additional funding, the term `appropriation' provided for that purpose does not have sufficient legal certainty, in the government's view. In our view, the proposed commencement provision is not workable and there is no precedent to assist interpretation of how it would work.

Although amendment (2) does not materially alter the bill, the way in which the amendment is drafted is not supported. The amended provision suggests that the act and the Inspector-General of Taxation will have three objects. In fact there is only one object: to improve the administration of the tax laws for the benefit of all taxpayers, as I have mentioned. Conducting systemic reviews and providing independent advice to the government on tax administration are means of achieving this end.

The government does not support amendment (3), which introduces, in our view, elements of confusion and a degree of uncertainty about the scope of the inspector-general's functions. Under clause 7 of the bill as it stands, the inspector-general has a very broad remit to review all the administrative systems of the Australian Taxation Office, including where the tax office administers schemes that are not technically tax administration. For example, as the bill is currently drafted, with the extended definition of tax law in clause 4, the inspector-general can examine matters such as the tax office administration of family tax benefit payments, the administration of diesel fuel rebates and the issue of Australian business numbers. The term `tax administration' is not defined in the bill. Giving the term `tax administration' its natural meaning, it is not at all clear that the inspector-general would be able to examine some of the non-tax administrative schemes currently included within the scope of the inspector-general's functions. Clause 7(ii) is also left hanging by the proposed amendment. It would need to be amended or deleted. If it is deleted, the element of uncertainty about the scope of the inspector-general's functions is exacerbated.

Amendments (4) and (5) seek to remove the discretion of Treasury ministers to give the inspector-general a direction to conduct a review. It is not clear what happens to the provision in clause 41 requiring the inspector-general to report any directions in the annual report. These amendments undermine the object and functions of the inspector-general. The inspector-general will strengthen independent advice to Treasury ministers on tax administration. Under the bill as it stands, the inspector-general of tax would have the power to initiate reviews on his or her own motion and has a discretion in allocating resources amongst competing priorities. In view of the way in which the vote is going to go, I do not propose to continue my remarks in respect of the amendments that have been agreed to.

Question agreed to.