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Notice given 20 March 2003

1315  Senator Mackay: To ask the Minister for Communications, Information Technology and the Arts—With respect to question no. 16 taken on notice by Telstra during the Environment, Communications, Information Technology and the Arts References Committee hearing, on 6 December 2002, into the Australian Telecommunications Network:

(1) Can details be provided of the categories of work which is outsourced to contractors, and the approximate amount of time at which Telstra benchmarks each task.

(2) How does Telstra ensure quality control over the network repair work done by: (a) contractors; and (b) sub-contractors.

(3) (a) How long after a job is completed is that work checked; and (b) what is the Telstra company practice for this.

(4) (a) Who in Telstra checks the work done by contractors on the network; and (b) can details of the process used for this checking be provided.

(5) (a) What percentage of contractor work is checked; and (b) can figures be provided for daily, weekly and monthly basis of the Telstra company practice for this process.

(6) (a) How is the quality control of contractor work reported on to Telstra management; and (b) what form does this reporting on quality control take.

1319  Senator O’Brien: To ask the Minister representing the Minister for Agriculture, Fisheries and Forestry—For each of the following financial years: 1996-97, 1997-98, 1999-2000, 2000-01, 2001-02 and 2002-03: (a) how many overseas trips did the minister responsible for primary industries and agriculture undertake; (b) what countries were visited on those trips; and (c) on how many of those trips was the Minister accompanied by a business delegation.

1340  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—With reference to the recent decision in the Federal Court determining that Ms Julie Vincent was not liable to pay taxes to the Australian Taxation Office (ATO) and did not owe the tax debt attributed to her:

(1) Will the ATO contact Ms Vincent’s fellow investors who have made settlement offers to the ATO and inform them that they are not liable to pay the tax claimed by the ATO on their amended assessments.

(2) Can assurance be given that no other taxpayers will be financially disadvantaged as a result of ATO actions against them, particularly those who have made settlement offers to the ATO.

(3) Why did the settlement process require that taxpayers make an offer to the ATO on a document prepared by the ATO which could not be accepted if there were any deletions or additions.

(4) Has the ATO undertaken a review of the approximately 174 tax effective projects on which it has disallowed deductions, to determine the categories that would define projects in good, bad or alternative groups (eg structure, investor investment/deductions ratios, investor risk, profitability potential, export potential, certification and endorsement levels and employment opportunities); if so, will the ATO release the results of that review.

(5) Has the ATO undertaken a review of the project type and/or such ratings, against the decisions made by the Federal Court to date.

(6) How does the ATO explain the original letters sent to investors, with the prominent use of Budplan and Vincent case names, implying that these projects were typical and applied to all tax effective projects, given that rulings in the Federal Court to date paint a completely different picture and suggest that the average mum and dad investor has been misled by the ATO.

(7) Does the ATO intend to issue to all investors a letter of explanation and an opportunity to withdraw any settlement offer.

1341  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—

(1) Following Ms Julie Vincent’s win before the Full Bench of the Federal Court, does the Minister accept that the amended assessment sent to her was wrong.

(2) Does the Minister accept that Ms Vincent would have been required to pay tax for which she was not liable had she followed the settlement process provided by the ATO.

(3) Can a guarantee be given that not one of the approximately 45 000 people caught up in this campaign will be similarly disadvantaged.

(4) Does the Minister believe that the ‘one size fits all’ approach taken by the Commissioner of Taxation to the mass marketed tax effective investments campaign has resulted in gross unfairness to taxpayers who sought professional advice and told the truth when filling out their returns.

(5) What is the Minister prepared to do about the growing feeling that the Commissioner of Taxation has taken advantage of his powers by bullying and intimidating taxpayers into accepting offers that can seriously disadvantage them.

1342  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—With reference to mass marketed tax effective investment (MMTEI) schemes:

(1) Does the Minister believe that the Taxpayers’ Charter of Rights should be dissolved.

(2) Can the Minister confirm: (a) that the Australian Taxation Office (ATO) had concerns about the charter in the early 90s or even earlier; and (b) that the ATO took no action.

(3) Does the Minister agree that if the taxpayer has to ‘get it right’ or face the repercussions then so, too, the ATO must also ‘get it right’ or also face the repercussions.

(4) (a) Is the Minister aware that the settlement process document provided by the ATO to taxpayers states that the Budplan and Vincent court wins for the ATO prove the ATO was right, however in a letter to Australians for Tax Justice, the ATO states that the result of the Federal Court win for Ms Vincent was confined to a small number of participants in the project; and (b) why is this the case.

(5) Does the Minister agree that the actions of the ATO in regard to the freedom of information (FOI) requests from MMTEI taxpayers, including originally attempting to charge five and six figure fees, were designed to avoid the ATO’s obligations under FOI law.

(6) Will the Minister admit that the failure on the ATO’s side to meet FOI requests by the deadline for settlement meant that MMTEI taxpayers were forced to decide on settlement without being fully informed.

(7) Does the Minister agree that the ATO failed to comply with directions from the AAT to provide documents to at least one appellant and sought repeated stays of hearing as the deadline for settlement approached.

(8) Why does the ATO operate on the basis that it does not have to apply the principles of natural justice (ie procedural fairness) when conducting an internal review of a taxation decision.

(9) Can the Minister confirm that the decision to disallow MMTEIs was taken at Casselden Place, Melbourne 5 months before the ATO had informed the public of its views by issuing Draft Ruling TR97/D17.

(10) Will the Minister confirm that the ATO issued at least seven Private Binding Rulings (PBR) concerning the following primary production MMTEIs between 3 December 1992 and 19 January 1998, as follows: (a) 1/ Main Camp Tea Tree Oil Project No. 1 (at least 2 PBRs were issued); (b) 2/ Main Camp Tea Tree oil Project No. 2; (c) 3/ Tumut River; (d) 4/ Orchard Project; (e) 5/ Golden Vintage 1996; (f) 6/ WA Paulownias; (g) and 7/ Plantations and Red Claw Partnerships.

(11) Does the Minister agree that all but one of these seven PBRs are unqualified as to Part IVA provisions of the Income Tax Assessment Act, and that the financing arrangements (associated companies, non recourse loans, round robin of cheques) are specifically acknowledged in four of them.

(12) Does the Minister agree that the Commonwealth’s stated position (after the Sherman report) on the applicability of PBRs is that they should be available to ATO officers and taxation advisers for guidance, and ‘legally binding on the Commissioner for a taxpayer whose circumstances are comparable to those dealt with by the ruling’.

(13) Why is it that the ATO continues to resile from the applicability of these (and possible other) PBRs to many of the 174 disallowed MMTEIs.

1343  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—With reference to mass marketed tax effective investment (MMTEI) schemes:

(1) Can details be provided of how much the Australian Taxation Office (ATO) has spent on the MMTEI campaign.

(2) Has the Treasurer allocated additional funds to the ATO to carry out this campaign; if so, can details of additional funds be provided.

(3) Can the Minister confirm that the ATO has spent over $100 million on the MMTEI investigations.

(4) (a) Has the Minister failed in her duty to the Parliament by not taking earlier action; and (b) why should Australian taxpayers pay for this level of inadequacy.

(5) Will the Minister make a commitment that she will not waste any more public money when it is clear that the ATO has been proven wrong in the eyes of the law.

(6) (a) Does the Minister accept the ruling of the Federal Court in the cases Vincent, Puzey and Cooke; and (b) will the Minister put a plan in action if it becomes more obvious that the ATO cannot sustain arguments in the court.

(7) If a taxpayer has availed himself of the settlement process issued by the ATO and it is subsequently found that investors in the project have their deductions allowed by the court, as in the Vincent case, can the Minister confirm that the ATO will contact the acceptors and inform them that their deductions are allowed.

(8) Will the Minister inform the Senate what mischief there is in aggressive tax planning.

(9) Is aggressive planning illegal; if so, under what head of power.

(10) Is it possible for an ATO product ruling to allow a project manager to go out and mass market an aggressive tax planning strategy.

(11) Is tax minimisation illegal; if so, under what head of power.

(12) Is it true that, in May 1997, officers of the ATO met in Casselden Place, Melbourne to discuss the disallowance to the deductions in MMTEIs.

(13) Why was a further $2 billion in tax deductions recovered by the ATO and accepted as claims in the following 2 years before the market effectively knew that the ATO had agreed to disallow the deductions.

(14) Was the Treasurer made aware of the ATO’s intentions in this matter before action was taken; and, if so, what was his reaction.

(15) Given that the Treasurer re-appointed the Commissioner of Taxation for another 7 years, a full year before he was required to, and given that, in a press release, he stated that the re-appointment was because of his work on aggressive tax planning: is this just another way of securing 7 years for the Commissioner to promise the Treasurer hundreds of millions of dollars.