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Wednesday, 27 March 1985
Page: 961

Mr KEATING (Treasurer)(10.02) — I move:

That the amendment be agreed to.

The Bill to which this amendment relates originated in this House and after passage on 28 February was transmitted to another place where it was, notwithstanding the Government's dissent, amended by altering the commencement date from 1 July 1980 to 12 May 1982. The original commencement date of 1 July 1980 reflected the Government's clearly announced policy endorsed by the people of Australia on two occasions so far to employ retrospective legislation to ensure that tax sought to be avoided under blatant tax avoidance schemes would be recovered, irrespective of when the schemes were entered into. Let me make it clear that the Government adheres to the view that a credible threat of retrospective legislation is the only certain way to smash the tax avoidance industry and ensure that it is not revived.

In my second reading speech on the introduction of this legislation, I outlined the trust stripping arrangements to which these measures are directed. It is generally acknowledged that these trust stripping arrangements constitute a tax avoidance scheme of the most blatant kind with no redeeming features. As explained during the second reading debate on the Bill, most of the schemes against which these measures are directed were entered into between 1 July 1980 and 11 May 1982 and, of the estimated $10m in revenue that is at risk, the great majority-$9.5m-relates to that period. Acceptance of the amendment now before the House will mean that there is little likelihood that the $9.5m will ever be recovered from those who benefited from these blatant and artificial tax avoidance schemes.

Nevertheless, the Government has decided that the amendment should be agreed to. That action is not to be taken as any weakening of our resolve to continue to propose to this Parliament retrospective legislation whenever necessary to recoup lost taxes from those minded to cheat on their fellow Australians. Not to pass this Bill in its amended form would be an open invitation to exploit in the future this apparent weakness in the tax law. This Government is simply not prepared to let that happen. With those comments I indicate that the Government seeks the acceptance by this House of the amendment of this Bill.