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Wednesday, 13 June 1984
Page: 2942

Senator JACK EVANS(5.10) —The Australian Democrats were very keen to have the effects of the Income Tax Assessment Amendment Bill (No. 2) considered by the Senate Standing Committee on Finance and Government Operations . That Committee interviewed representatives from the Australian Taxation Office . As a result of the deliberations of the Committee following those interviews the Committee brought down two recommendations. The first recommendation states: In view of the fact that identified cases of abuse of the taxation law using cherry picker schemes have occurred at least since 1978-79, and that the largest case identified so far occurred in that year, the Committee concludes that retrospectivity is justified and recommends that the Income Tax Assessment Amendment Bill (No. 2) 1984 be passed by the Senate.

That recommendation coming out of that Committee, if it were to stand on its own , would provide the justification for retrospective legislation without any further action and would imply that the retrospectivity of this Bill is justified as perceived by the Finance and Government Operations Committee comprising representatives from both sides of the chamber. However, that did not happen. In fact, that recommendation was supported by only half of the members of the Committee-the Government's representatives on the Committee. Recommendation No. 2 reads:

If recommendation (1) is rejected by the Senate then the Committee recommends that the Bill lie on the Table for a period of not less than 12 months to enable the Commissioner of Taxation to pursue the matter of taxes avoided by the use of section 23F superannuation funds through the courts using the existing provisions of the Income Tax Assessment Act.

That second recommendation was supported by all six members of the Finance and Government Operations Committee-the three Government members, the two members from the Liberal Party of Australia and myself, representing the Australian Democrats. I believe that that unanimous support is not just an expression of the opinion of the members of that Committee but puts very fairly the result of the deliberations of the Committee based on the evidence presented to it. That evidence makes it very clear that the case for retrospective legislation in this instance is not yet proven. It does not say that there is no case; it says that it is not yet proven-the old Scottish verdict, which I am sure Senator McIntosh will appreciate.

That verdict tends to leave the case up in the air but that is very important at this stage because it was recommended that the decision be left up in the air for only 12 months; it was not recommended that it be left dangling for ever. The whole point of the recommendation was to find out whether the suggestions put by a number of illustrious Queen Counsel in this country were correct. They suggested that the Commissioner of Taxation did in fact have the powers to pursue these tax avoiders or tax evaders, that the Taxation Commissioner had been a little negligent in the pursuit of the tax avoiders and evaders and that there needed to be pressure put on the Taxation Commissioner by the Parliament to have him follow that path. Understandably the Taxation Commissioner having been knocked back time and time again each time he attempted to use section 260 of the Income Tax Assessment Act, was starting to get a bit battered and browbeaten and to feel that it was all a waste of time. I believe that situation has changed. We now have a different High Court of Australia composition and a new enthusiasm to get at the tax evaders in this community. This is an enthusiasm shared by everybody in this Parliament.

Senator Walsh —I do not think so.

Senator JACK EVANS —At least everybody claims to support the campaign against tax evaders.

Senator Dame Margaret Guilfoyle —We do have the tax law too.

Senator JACK EVANS —As Senator Dame Margaret Guilfoyle said, we do have provisions, including amendments to the Income Tax Assessment Act, which will give additional weight to any cases brought before the courts against the tax evaders under the cherry picker or section 23F scheme. I think it is important for honourable senators to take cognisance of recommendation No. 2 of the Finance and Government Operations Committee. Following the second reading of this Bill the Senate agreed-I think it was unanimously; I am not positive about that-

Senator Coates —No.

Senator JACK EVANS —I am sorry, not so. Nevertheless the majority of the Senate agreed to refer the matter to the Finance and Government Operations Committee. I believe that Committee has the appropriate standing in this Parliament for its recommendation, which is unanimously supported, to receive the endorsement of the Parliament now. Therefore, I believe that the endorsement is mandatory, certainly on senators on this side of the chamber. I believe it is also mandatory for those honourable senators in the Opposition who supported the recommendation of the Finance and Government Operations Committee. Mr Chairman, I wish to move for the adoption of that second recommendation of the Committee and I seek your guidance as this is a cognate debate.

The CHAIRMAN —No, it is not a cognate debate, Senator Evans. You may move your amendments if you wish or other procedural matters might flow from rejection in the Committee stage of any part of the Bill. The cognate debate exists only in the sense that the report of the Senate Standing Committee is relevant to this Committee stage debate. Any of the matters raised by the Committee would be relevant to the debate but at the moment all you can do is to move your amendments, or oppose clauses or oppose the whole Bill.

Senator JACK EVANS —Thank you, Mr Chairman. I take your advice and notify the Committee that I wish to withdraw the amendment circulated in my name in favour of an adjournment motion which would have the same effect as recommendation No. 2 coming from the Finance and Government Operations Committee.

The CHAIRMAN —Senator Evans, again you cannot move an adjournment motion but you can, if you wish, move that progress be reported and seek any date you wish for the resumption of the debate. At the moment all you can do is move that progress be reported and seek leave to sit again, if that is what you wish to do.

Senator JACK EVANS —Thank you, Mr Chairman. If that has the same effect then I will move that the Committee report progress with the objective of resuming the debate 12 months hence.

The CHAIRMAN —That would have to be a matter for the Senate. Senator Evans, the motion you may move is to report progress and to seek leave to sit again.

Senator JACK EVANS —I move:

That the Committee report progress and seek leave to sit again.