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Thursday, 29 June 2000
Page: 16087


Senator RIDGEWAY (8:21 PM) —I rise to express our overall support for the intentions of the A New Tax System (Tax Administration) Bill (No. 2) 2000. I believe it is the last bill to establish elements of the new tax system before it takes effect this coming Saturday. It deals primarily with compliance and administration by introducing a uniform administrative penalty regime for all taxation laws. This particular bill is the second slab of legislation on the new compliance scheme, with the third slab containing the recommendations from the Ralph report yet to come to the Senate. The regime that is chosen is modelled very closely on the Income Tax Assessment Act provisions but is now to be extended much wider. In our view, it is not a controversial piece of legislation. The only particularly controversial aspects are the provisions that deal with the giving of taxation advice. These amendments aim to allay fears about accountants being overwhelmed by the demand to lodge business activity statements after 1 July.

The bill will allow the following people to lodge business activity statements: professional accountants and tax practitioners, bookkeepers working under the direction of registered tax agents and persons who provide payroll bureau services to employers. The Democrats support these particular provisions. However, we are concerned by further provisions in the bill that expand the range of taxation services which may only be provided by a registered tax agent. These amendments particularly restrict the capacity of people who are not registered tax agents from providing general taxation advice. There are special provisions dealing with lawyers providing advice and so on.

My concern is one that has been raised by the National Tax and Accountants Association in evidence given to the Senate committee about the advice provided by industry bodies. What needs to be highlighted is that, because industry bodies have an annual subscription, they could well fall within the category of persons providing paid tax advice. This would essentially mean that members would no longer be able to obtain tax advice from their industry body or union. Given that much of the GST education campaign effort has been carried out by industry bodies themselves, this would be an unfortunate outcome. In evidence to the Senate committee, the ATO assistant commissioner, Michael Smith, said that the government would introduce amendments to resolve the issue. So far they seem not to have materialised in the form that we expected, although I acknowledge that some changes have been made.

I want to apologise for the lateness in circulation of Democrat amendment No. 1 in my name on sheet 1870. I propose in the committee stage that, in the absence of clarification from the government, I will move an amendment to allow employer and employee associations to provide tax advice to their members. I also indicate at this stage that, whilst I recognise and note the change made by the House of Representatives to section 251L relating to the giving of advice, I want to put on the record that the National Tax and Accountants Association seems to be convinced that the problem is still not fixed. I want to add also that the provision seems a little out of place when it is really supposed to be about increasing the number of people eligible to submit business activity statements rather than restricting the number of tax advisers themselves. On another note, I ask the government to consider whether, even with the suggested change, that provision might in fact be anticompetitive because, at the moment, that is a little unclear.

I want to flag pretty early as well that from what I have seen so far I am not persuaded that the problem has entirely been remedied. I understand that the government has further legislation planned dealing with the new registration provisions for tax agents, but I ask Senator Kemp, on behalf of the government, whether it is not better that this issue be part of that review. During the dinner break—and I presume that this happens on many occasions—I received telephone calls from the Australian Tax Office expressing concerns about the Democrats' amendment. Can I ask the government to explain what it sees as the problem with that amendment?