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Tuesday, 17 March 1987
Page: 927


Mr SPENDER(5.40) —I wish to say something about a few of the points made by the Attorney-General (Mr Lionel Bowen). First of all, I entirely welcome what he said about the Federal Court of Australia. I agree with it without any reservation at all. Sometimes people do think it is a little peculiar if a government is changing laws so as to alter jurisdictions. But I am perfectly certain that those who go to the Federal Court will get precisely the same quality of justice as they would get in the State supreme courts, be they the Commissioner of Taxation or taxpayers.

The Attorney-General gave some figures on the number of cases that had been referred by the Commissioner in recent times. Of course, those figures demonstrate very plainly something which is very bad about the system; that is, that the Commissioner has been sitting on cases. It is the task of the Commissioner under the taxation Act, where an objection has been made, to refer cases to the State supreme courts under the existing legislation or, under this legislation once it is passed, to the Federal Court of Australia. It is incomprehensible that there should have been such an extraordinary growth in the number of cases referred-from 351, I think the Attorney-General said, to some thousands the next year-if the Commissioner was conducting his business properly, fairly and with regard to the rights of taxpayers. It is incomprehensible that efficient administration of the taxation laws could admit a situation where in one year only 351 cases were referred and in the next year there were thousands. Those thousands did not just suddenly appear over the horizon; they were there but they were not dealt with. That would seem to be perfectly plain.

It needs to be said that, on the basis of those figures, a bomb should be placed under the Commissioner of Taxation to make sure that this kind of delay does not take place again, since the delay very greatly affects people who are objecting against assessments which, as a matter of course, they will have paid, since the Commissioner can exact payment from a taxpayer and the taxpayer then has to contest at a later date. Sometimes the Commissioner does not do this, but the power is there. So, in many cases we are dealing with litigants, taxpayers, who have paid their tax, who object to that tax and who have to get in a queue-and the Commissioner has not been expediting the movement of that queue. In fact, on the basis of the figures given by the Attorney-General, he seems to have been doing precisely the opposite. If there is any other explanation I would be very glad to have it, not from the Attorney-General, of course-it is not his area-but from the Commissioner of Taxation.

The Attorney-General said that the State supreme courts do not want the existing work. I can well understand that. If a jurisdiction is to be taken away from a court, one can hardly blame that court for wanting to get rid of the jurisdiction entirely, since otherwise what would be happening is that the State supreme courts would be dealing with a jurisdiction which they knew was going to end as soon as they had dealt with all outstanding cases. This will obviously have the consequence that I referred to earlier; that is, that there will be many cases where appeals which otherwise would have been heard fairly quickly-in some cases appeals which are set down for hearing-will not now be heard for a long time because of the very great increase in the work load this measure will bring to the Federal Court.

The Attorney-General pointed out, of course, that the existing structure is to be maintained and that under the existing structure from the court of first instance there is an appeal to the Federal Court itself-a court of appeal of the Federal Court. Under the proposal that we advanced there would be an appeal from, for example, the Supreme Court of New South Wales to the Court of Appeal of that Court which, incidentally, has on it some of the leading tax lawyers in this country. This again makes the point that I made earlier; that is, that expertise and experience in tax work is to be found in the State courts and it is a pity that jurisdiction in this area will not be shared.

Lastly, if I may return to the Attorney-General's cri de coeur about the state of the tax laws of this country, I entirely agree with him. Those laws have been written over decades. They are amended from time to time in a drafting style which is increasingly impossible to understand. I doubt that there is any single person in this country who understands fully our taxation system. There are people who do nothing but immerse themselves in the tax system. There are people who for years, even decades, of their lives have done nothing but advise on taxation work. Yet those people find some of the problems that our legal system throws up to be incapable of intelligent understanding. Some of the provisions were drafted in the 1920s; then others in the 1930s; and they have been added to bit by bit, so that the Income Tax Assessment Act of this country is now the worst single piece of legislation that we have. It is the Act which, of all Acts of parliament, should be as clear as possible so that citizens can know what their liability is under it and so that the law is accessible, because the more complicated the expression of the law is, the more the draftsman tries to catch every conceivable situation and the more he drafts the words so as to compass all the possible varieties of human conduct falling under some particular head of concern in the taxation law, the more likely it is that what we will have is a mess which is incapable of rational understanding. That is what we have in the Income Tax Assessment Act.

I would join the Attorney-General entirely in a project to clarify our taxation laws. I do not for a moment think that all laws can be simply expressed; they cannot. But anyone who has had any practice in the drafting of laws, anyone who has had any practice in seeking to understand the Income Tax Assessment Act, knows two things: First, that that law is, as I have said, the most incomprehensibly drafted and worst piece of legislation we have in this country; and, secondly, that things could be made very much clearer, regardless of whatever tax regime happens to attract one.