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Thursday, 14 November 1985
Page: 2148

Senator MESSNER(12.31) —The point which Senator Peter Baume has just raised is really the tip of an iceberg which exists, as I think the Minister for Finance (Senator Walsh) will acknowledge, right through the administration of the Australian Taxation Office. Indeed, as I understand it there are very considerable problems in dealing with backlogs of work and in dealing with the welter of legislation which the Government is bringing forward as a result of its recent tax package. In the light of the lack of information which has been forthcoming from the Government about its proposed timetable for putting down legislation for debate in the Parliament on the new tax package, and in particular I mention the capital gains tax, the fringe benefits tax and the legislation on negative gearing-it now being almost five months since the announcement was originally made-I ask whether the Government is in a position to give us a timetable as to legislation and, indeed, some kind of indication as to when the Parliament will be dealing with it.

I might just outline the case for that because I think it is important to recognise that the legislation that the Government intends to put in place as a result of the tax package is very complex. I think that the Government recognises that. Also, there are many uncertain areas in the legislation. The statement that has been made by the Treasurer (Mr Keating) really gives us very little indication of what will be taxed and what will not be taxed. I instance the capital gains tax because I think the Minister will acknowledge that during Question Time in this place and during questions addressed to the Treasurer in the House of Representatives, we quite frequently get interpretations of what will be covered by the legislation, but it is always subject to the qualification that the Government has not yet finalised its view about these things. The degree of uncertainty that is growing in the community on these various matters, I hope the Minister agrees, is becoming very widespread. Indeed, if we are to wait another five or six months before we get the legislation on the tax package before we have a chance to even assess what it is that is going to be subject to tax, it is going to be an intolerable situation for the conduct of business by ordinary businesses out there in the market-place.

The point that I wanted to make following that is that I believe there is a need, as a matter of policy and of administration, for any government to be able to provide detailed legislation on its intentions in the tax area. I think we can draw the distinction between legislation that is drawn to outlaw loopholes in law that become evident through the increasing use of tax avoidance devices and things of that kind. Should statements be made at a particular time, it is reasonable that there might be some delay in the actual preparation of legislation, but at least people are put on notice that that loophole will be closed. That is an entirely different situation from the situation which we face now. The Government, having announced a total new tax regime in many areas, has not clearly indicated what is going to be subject to tax. Indeed, that is still going to be the situation, as I understand it, for some months to come. I think the Government should appreciate that distinction and make sure that in future when it is setting out changes to the whole tax structure, as opposed to some parts of the legislation, it brings in the legislation with its package.

I recall a major change to the tax regime that resulted from the Ligertwood Commonwealth Committee on Taxation recommendations as far back as 1964. If my memory proves me correct, I think it was 22 October 1964 that the Government introduced a whole package of changes, where the statements made in the Parliament were done at the same time as the legislation affecting the changes was introduced. Indeed, that was fairly quickly followed by statements from the Taxation Commissioner as to how the law would be administered thereafter. I believe that is the ideal way for the Government to handle situations of this kind. Indeed, it is an extraordinary imposition on the community for people to face taxation on various types of new defined income, as the Government now has done through its tax package, and have no clear indication as to whether certain transactions and certain kinds of income will be subject to tax.