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Wednesday, 12 September 1984
Page: 1116


Mr HOWARD —My question is addressed to the Treasurer. I refer to his announcement of new penalties for tax evasion. In completing his extensive review, did he examine the possibility of amending the law to ensure that registrations of uncomplicated private sales of securities between related shareholders, such as a family company to a member of that family, take place promptly to prevent tax avoidance through the backdating of such transactions? If not, why not?


Mr KEATING —I would need to peruse again the elements of the review which the Government undertook, which was most extensive. I might add, as I indicated yesterday, that this has been the first major review of tax penalties by any government since before the last war. Whilst it may have been that the former Treasurer gave some notice of a review of tax penalties towards the end of his term, in fact that never happened. I remind the House that he was Treasurer for five years and that his Government was in office for seven years. Some of the penalties, such as those for the most simple offences of, say, not completing a tax form or for filling it out untruthfully, with penalties of from $4 to $200, are entirely out of context with monetary values these days. Therefore, the increases are appropriate and long overdue.

There are very wide-ranging consequences of these penalties to the basic fabric of the taxation system. Whilst we have seen a flurry of activity on the part of the former Government to deal with paper schemes long after they got out of control, and the tax debate in the last few years has focused on that particular element, the fact is that the nuts and bolts of the tax system work upon decent resources for the Taxation Office, an efficient Taxation Office and a range of penalties which affect all taxpayers and influence them in terms of the completion and filing of tax returns. It is to that issue, as the Prime Minister indicated yesterday, that the Government has attended. We want to make the tax system more resilient to the problems that the tax administration has faced.

I remind the House that we have added 700 staff at the Taxation Office-there has been an increase of 392 in the compliance area-as compared with the decline in staff that occurred in that office in 1978 and 1981. The former Government actually reduced the staff of the Taxation Office. It is no wonder we had problems. As I said at the beginning, in terms of the specifics of the question which the Deputy Leader of the Opposition put and in terms of the length of that review which took place some time ago, I cannot recall precisely what our response to that area was, but I shall refresh my memory and advise him accordingly.