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Treasury Laws Amendment (2019 Tax Integrity And Other Measures No. 1) Bill 2019 [Provisions]
Additional comments from Labor Senators

Schedule 3

The Committee report adequately highlights the issues that Labor Senators have concerns with.
In many submissions there have been obvious concerns over what can and cannot be claimed as a deduction under this proposal.
For instance in one example, Chartered Accountants Australia and New Zealand (CAANZ) highlighted that newly constructed apartments could be impacted by structural defects. They state in their submission:
In light of the recent problems in Sydney with newly constructed apartments impacted by structural defects (e.g. Opal Towers and Mascot Towers), it has been brought to the our attention that these buildings could be inadvertently caught by these provisions as they are no longer lawfully able to be occupied due to the structural defects.[1]
Labor Senators support Recommendation 1 of the committee report calling on Treasury and the ATO to address the consequences for property owners raised by CAANZ and the Tax Institute of Australia.

Schedule 5

Labor Senators support the committee’s view in regards to schedule 5.
In regards to the Inspector-General of Taxation and Taxation Ombudsman (IGTO), it became apparent in the hearings that for the IGTO to be an effective organisation they require the appropriate powers and resourcing.
Recommendation 2 of the Committee report addresses some of these concerns.
It is the view of Labor Senators that the Government must look at measures to properly resource the IGTO with respect to schedule 5.
Although Recommendation 2 of the committee report is a valid and an important recommendation, Labor Senators want to ensure two specific issues raised by the IGTO are resolved immediately.
The first issue is to extend the notice period currently at 21 days.
The IGTO in their submission explains:
The Explanatory Memorandum also envisages that where a taxpayer lodges a complaint with the ATO after they receive notification of intended disclosure, the ATO will investigate that complaint and, if the taxpayer remains dissatisfied, the taxpayer may lodge a complaint with the IGTO. As the ATO’s ordinary service expectation is to resolve complaints within 15 business days (or 21 calendar days), it is unlikely that taxpayers would be in a position to lodge a complaint with the IGTO within the 21 day notification period.
Accordingly, we submit that the timeframe in subparagraph 355-72(1)(e)(ii) be extended to provide sufficient time for taxpayers to effectively engage with the ATO, go through the ATO complaint process and lodge a complaint with the IGTO, also taking into account postal timeframes.[2]

Recommendation 

Labor Senators recommend the notice period be extended to 28 days.
The second issue is allowing a Tax practitioner representative of a tax debtor to be included in notifications where relevant, which is described in the IGTO’s submission:
The Bill No. 1 only requires service of the notice of intended disclosure to the taxpayer. However, where taxpayers have engaged the services of a tax practitioner representative, the representative may be unaware of the intended disclosure. Moreover, without such notice, the representative may be unaware that they could assist their client or otherwise have their client or the client’s debt excluded from the declared class of entities — for example, by assisting their client to enter into a payment arrangement.
Accordingly, the IGTO considers that it is important that any taxpayer representatives are also notified of the intended disclosure of their client’s information to CRBs.[3]
Labor Senators believe this can assist debtors by tax agents encouraging tax debtors to comply with the law and by improving the ability of tax agents to support their clients.

Recommendation 

Labor Senators recommend tax practitioner representatives of a tax debtor to be included in notifications where relevant.

Schedule 7

Labor Senators support the objectives of schedule 7 and for the most part supports the Committee view of this schedule.
This is an important change in solving the unpaid superannuation issue that is affecting a significant number of Australians. According to Industry Super Australia their analysis on schedule 7 suggests:
…salary sacrifice provisions will fix the issue for about 370,000 workers with more than $1.5 billion in entitlements. This is on 2016—17 figures. This is, at our estimate, 16.6 per cent of the unpaid super problem.[4]
However, it is incumbent on the government to continue to resolve the issue of unpaid superannuation, which is effectively the theft of wages. Industry Super Australia in their evidence estimates:
…the problem of unpaid super has increased 25 per cent in the last three years. On 2016—17 data, 2.8 million Australians are owed just under $6 billion in entitlements.[5]
With respect to the commencement date of schedule 7, Labor Senators support the views presented to the committee by the Institute of Public Accountants and reported in sections 2.52 and 2.53 of this Committee report.
Labor Senators cannot support the effective ‘legalising of theft’ if this bill is passed, but not implemented until 1 July 2020.

Recommendation 

Labor Senators recommend that the implementation date of schedule 7 of the Bill be amended to 1 January 2020, but to be retrospectively in effect from 1 July 2019.
Senator Alex Gallacher
Deputy Chair
Labor Senator for South Australia
Senator Jenny McAllister
Labor Senator for New South Wales

[1]     

Chartered Accountants Australia and New Zealand (CAANZ), Submission 19, p. 5.

[2]     

Inspector-General of Taxation and Taxation Ombudsman (IGTO), Submission 15, p. 11.

[3]     

IGTO, Submission 15, p. 6.

[4]     

Mr Nick Coates, Head of Research and Campaigns, Industry Super Australia (ISA), Committee Hansard, Canberra, 19 August 2019, p. 26.

[5]     

Mr Nick Coates, Committee Hansard, Canberra, 19 August 2019, p. 26.