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Wednesday, 14 December 1983
Page: 3768

Senator JACK EVANS(3.52) —Prior to the suspension of the sitting for lunch I referred to the dilemma which this Government faces, a dilemma which the previous Government faced, which was the making of Australian governments and which came about as the result of the gross negligence of a series of governments in this country. That negligence was compounded by inaction in certain departments and was made far worse because of a ruling by Justice Barwick which let a great number of tax avoidance and evasion schemes through the net because there was no section 260 to pick up those tax avoiders and evaders and make them pay their just dues to this country.

The Taxation (Unpaid Company Tax) Assessment Amendment Bill 1983 (No. 4), more commonly known as bottom of the harbour legislation, has arrived as the third instalment of this Government's endeavours to tidy up the 1982 legislation passed by the Fraser Government and to expand that legislation to embrace more tax avoiders and evaders. It is late. It is very late as a remedy for the problems that have been created and have built up over that 10-year period. I will not deal any more with the problems that this Government, the previous Government and their predecessors met in bringing down this legislation. The problems are not just those of the Government. They are problems that concern the Australian Democrats. This Bill, like its predecessors, contains the retrospective element. I know that I speak on behalf of all the Australian Democrats when I say that nobody denies the need to clean up tax evasion in this country. The Australian Democrats are united in their efforts and in their support for any government which moves to clean up tax evasion in this country. The question is how can it be done and, more importantly, how can it be done with justice, with fairness and with equity.

This legislation contains the retrospective element. Its purpose is only to clear up loophole provisions which were contained in the 1982 legislation. Therefore, one could probably argue that it is not retrospective in terms of its ingredients in taxation assessments and that all it will do will ensure that everybody who should have been picked up in the 1982 legislation is picked up. Despite that, I appreciate and sympathise with those Australian Democrats who have been absolutely consistent in opposing any retrospective legislation, legislation which says: 'The things that a person did legally last year or five or ten years ago will now be deemed to be illegal'. I can understand that point of view.

I repeat that the three Australian Democrats who in 1982 announced their opposition to retrospective legislation and who stood rigidly by that position should be respected and, I believe, are respected by most members of this Parliament. Colin Mason has consistently adopted a very principled stance that if a person robbed the taxpayers of Australia in 1975, 1977 or 1980 and the Commissioner of Taxation caught up with him in 1983, the Taxation Commissioner should hit him with a tax assessment. The fact is that that form of robbery was conducted by many people under the guise of phony tax avoidance schemes as distinct from blatant tax evasion schemes. Therefore, those people thought that they were going to get away with it forever. This creates a problem. The problem is one of principle because it means that to catch up with these people one must apply legislation retrospectively.

Senator Mason and I have been consistent in our points of view. We believe the sins and the actions of those people were deliberately aimed at robbing the people of Australia, at avoiding and evading obligations, by allowing their companies to be committed to the bottom of the harbour so that the Taxation Commissioner could never catch up with their misdeeds and therefore discover whether they were legal or illegal. Senator Mason and I maintain that in those circumstances there should be an overriding principle of ensuring that justice is done to the whole of the people of Australia.

One of the problems that the Democrats are experiencing difficulty with is that the system as it was in 1982 and as it will be under this legislation did not and will not allow for any appeal from shareholders who feel that they are being unjustly dealt with. As I indicated earlier, a Democrats' private member's Bill is currently before the Senate. It aims at giving the right of appeal to people who have not benefited from and who were unaware of the moves that were being taken by the directors of their companies to send their companies to the bottom of the harbour. It is my understanding that the Government agreed to that proposal each time we put it to the Government. I am delighted to see that that proposal is part of this new legislation. The repeal of section 3 (12), the original loopholes clause which was inserted in the 1982 legislation, is something for which this Government believes it has a mandate. As its objective is consistent and has been consistent right the way through, to ensure that everyone who sent a company to the bottom of the harbour and benefited from that should pay the tax, the repeal of section 3 (12) is an appropriate move.

I should like to refer to a couple of minor anomalies. I hope to get the Government's response. One is that this new Bill gives the Commissioner of Taxation the right to refuse to disclose to shareholders who are to be assessed under this legislation information about the company's actions which were the cause of the assessment arriving. That is a harsh move to be taking in this legislation. Therefore, I appeal to the Government to withdraw clause 4 (c). I also suggest that it is harsh, and it is not normal practice, for late payers to be named by the Commissioner of Taxation. All sorts of people are named by the Commissioner, but under this legislation late payers will be named. That sets them apart from others. It is not a fair approach to tax legislation. Again, I ask the Minister to consider withdrawing clause 4 (a).

My final appeal to the Government is to support the amendment which I shall be moving in Committee, which will become clause 13, which would give those shareholders caught up in this legislation the same right to 60 days in which to appeal as was given to those who were originally caught up in the 1982 legislation. It is only fair that these people, who were under the impression from the outset of the 1982 legislation that they were not caught in this net and therefore took no steps to make their appeal within the requisite 60 days, should be given that same right of appeal. My amendment would give them that right. I ask the Government to support it.