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Wednesday, 9 February 2005
Page: 30

Senator MURRAY (11:38 AM) —I did indicate in my second reading remarks that I am inclined towards supporting this amendment, but I wanted to hear what the government had to say about it. I should just add to my earlier remarks before the minister responds. My understanding is as follows: in discussions between the Australian Taxation Office and a taxpayer, the tax office obviously has full powers to call for any explanation it wants, but once you move across to bankruptcy there is insufficient ability as yet to demand explanations on the record in every circumstance.

It seems to me that the law societies and law councils, from which this recommendation flows, have become extremely concerned about the bad reputation their profession has been subject to as a result of the activities of some. But the effect of that goes well beyond just that profession; it goes to all who might be in these circumstances. One of the things I like about the amendment—but of course it is in the process that you will see whether it works or not—is that an explanation should be required. If it is a reasonable explanation it will be accepted, but the requirement prevents ‘the dog ate my homework’ kind of response. A reasonable explanation is required for what might otherwise be a legal or accounting contrivance. On the face of it, I can see no problem with explanations being required in this form on these matters. That is my broad approach at first, but I want to hear what the minister’s response is to Senator Ludwig’s remarks and my own.