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Tuesday, 7 September 1982
Page: 1091


Mr MALCOLM FRASER (Prime Minister)(2.43) —The Leader of the Opposition ( Mr Hayden) in making his presentation on many occasions slid around the facts to make a point. That might be all right in this chamber but it does not get to the substance of the issue and it does not get to the concerns of this Parliament. Let me take a point right at the outset. In answer to questions I indicated that a request for a document on this issue would be dealt with in accordance with freedom of information legislation as though that legislation were in force. That would be the test that would be put against any request for a document. The Leader of the Opposition, in response, tried to suggest that requests would be dealt with when the legislation is given the royal assent, when it comes into material force in the generality of application. That, of course, is not what I said in that particular answer. Of course, the Leader of the Opposition also keeps avoiding the fact that it is the Royal Commissioner, Mr Costigan, who said that neither the Treasurer (Mr Howard), nor the Attorney-General (Senator Durack ) nor any of their predecessors, including the Leader of the Opposition when he was Treasurer, could have been told of the particularities of the case which is the main subject of chapter 3 of the report of the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. The Leader of the Opposition continually ignores that.


Mr Hayden —He has the benefit of Ian Sinclair's interpretation of the documents for him.


Mr SPEAKER —The Prime Minister will resume his seat. The Leader of the Opposition spoke to his motion in silence. I ask that--

Opposition members interjecting-


Mr SPEAKER —The Leader of the Opposition made his points and was heard in silence from the other side of the House. The noise was from his own side, mainly in support. I ask that honourable members on my left, on the Opposition benches, listen to the defence as silently as the charge was listened to. I call the Prime Minister.


Mr MALCOLM FRASER —Mr Speaker, in talking about section 16 of the Income Tax Assessment Act, the Leader of the Opposition continually avoids and ignores relevant paragraphs in the Royal Commissioner's report. In any accurate description of the events he ought not to do so. One of the things that come out very plainly is that the Leader of the Opposition finds it very difficult to read any document in a straight fashion. I would like to read in full the Federal Executive resolution of the Liberal Party of Australia. In addition, I would like to read a letter that was signed by the Federal President as a result of one particular newspaper chain getting the interpretation of that resolution quite wrong. The report states:

The Federal Executive of the Liberal Party today came out strongly behind the Government's continuing battle against tax evasion and tax avoidance.

The Executive gave full support to the Government's determination to recover tax illegally evaded through devices such as the bottom-of-the-harbour and other schemes.

The Executive noted that the Government, in its legislation, did not intend to establish a new tax liability but was determined to collect the tax that had been evaded from those who had wrongfully benefited from such evasion. The Government had indicated that it would be taking particular care in drawing up the legislation and it would be given the closest possible scrutiny before it was introduced into the House.

The Executive, while recording its objection in principle to retrospectivity,--

What honourable member does not dislike that principle in basic fact? But there are some circumstances which lead us to put aside that objection--

noted that the Government's intention was to collect the tax which would have been paid in the absence of such devices.

The Executive expressed strong support for the Government's determination to bring criminal proceedings against promoters of these schemes.

Because there were some misinterpretations of that very plain statement by one newspaper chain, the Federal President of the Party wrote a letter clarifying the issue and making it quite beyond doubt. In that letter, amongst other things , he said:

The Executive statement issued last Friday does represent unaminous support from the Executive for the Government's determined moves against tax evasion and tax avoidance and in particular for the Government's moves against bottom-of-the -harbour schemes.


Mr Young —I raise a point of order, Mr Speaker. Is that a resolution or a Press release?


Mr SPEAKER —There is no point of order.


Mr Young —Can we have the minutes of the Federal Executive of the Liberal Party- -


Mr SPEAKER —There is no point of order.


Mr Young —Not the crap you put out afterwards.


Mr SPEAKER —The honourable member--


Mr Young —Give us a look at the minutes.


Mr SPEAKER —The honourable member will resume his seat. If he interjects again I will name him.

Opposition members interjecting-


Mr SPEAKER —The Prime Minister will also resume his seat. I called the attention of the honourable member for Port Adelaide several times to the fact that he had no right to be speaking at the moment. He ignored me. It is for that reason that I warned him. There will be order in the House. I call the Prime Minister.


Mr MALCOLM FRASER —I think it ought to be understood that the federal executive statement that I issued had the unanimous support of all State presidents. Because it had been wrongly interpreted in some areas, the Federal President of the Party issued a further letter making the Party executive's support for the Government totally plain. He said:

The Executive statement issued last Friday does represent unanimous support from the Executive for the Government's determined moves against tax evasion and tax avoidance and in particular for the Government's moves against bottom-of-the -harbour schemes.

The Executive does not like the element of retrospectivity involved in proposed new legislation, but accepts the inevitability of this in the circumstances. It believes it is an occasion when the pursuit of tax evaders-and a fair go for the community as a whole-is the most important of the competing principles.

The Prime Minister made no concessions and gave no ground at the Federal Executive meeting. The Executive respected and supported the Prime Minister's uncompromising stand.

Those words are perfectly plain in regard to the attitude of my organisation. The Leader of the Opposition imputed to the central organisation of the Liberal Party views which were totally false.

I believe it is important to understand that once the Costigan report was within the hands of the Government we moved to take action swiftly on a number of fronts. The Perth Deputy Crown Solicitor's Office is being investigated. Three officers have been suspended and action is being taken under the Public Service.

Opposition members interjecting--


Mr SPEAKER —Order! I ask the Prime Minister to resume his seat. It is not acceptable to have continual interjection. Charges have been made. The right honourable gentleman on behalf of his Government is defending his Government. In a democratic system of the parliamentary institution, if the right honourable gentleman cannot make his defence then the Parliament is being misused. I ask honourable members on the Opposition benches to remain silent. In particular I ask the honourable member for Ballarat and the honourable member for Grayndler, who have been continually interjecting, to cease.


Mr MALCOLM FRASER —The President of the Law Council of Australia or his nominee has been asked to examine not only the Perth office but also the relationship between the Perth office and central office and between the Perth office and client departments. Obviously that investigation, dependent upon the examiners's inclinations and upon what his examinations reveal, could become quite a wide inquiry. It is my understanding that the Attorney-General (Senator Durack) will be announcing today the name of the person who will be undertaking that inquiry. A joint management review of the Crown Solicitor's Office has been undertaken. It is in the process of implementation. As I said before, that report did not get to the heart of the matters revealed by the Costigan report, and maybe it could not have been expected to because it was not that kind of inquiry. It was designed to improve the arrangements in the Deputy Crown Solicitor's Office.


Mr Robert Brown —Mr Speaker, I raise a point of order. I seek your advice as to whether it is appropriate for the Prime Minister to be reading a speech when he is supposed to be responding to the charges which have just been laid.


Mr SPEAKER —Order! There is no point of order.


Mr MALCOLM FRASER —The Public Service Board has also been asked overall to examine again the resources available in the Crown Solicitor's Office. Obviously the purpose is to advance prosecutions in particular cases. A special counsel has been appointed to advise on evidence in relation to particular cases and to assist in drawing charges. A special prosecutor in relation to bottom-of-the- harbour schemes will be appointed hopefully very shortly, and a task force of lawyers, taxation officers and police will be appointed. It will be working very closely with Victorian authorities. Whatever additional staff and resources are needed will be provided to that task force.


Mr Robert Brown —Mr Speaker, I ask that the document from which the Prime Minister is reading be tabled.


Mr SPEAKER —Order! I indicate to the honourable member for Hunter that there is no point of order. The point he is making is not relevant in these circumstances . I suggest that if he studies Standing Orders he will understand why. I indicate to him that when he is studying Standing Orders he will find that it is unparliamentary to take points of order which are not points of order. If he raises another matter that is not a point of order I will have to deal with him.


Mr MALCOLM FRASER —Perhaps it might help the honourable member if I tell him that the document from which I was speaking--


Mr Robert Brown —Mr Speaker-


Mr SPEAKER —Is the honourable gentleman making a point of order?


Mr Robert Brown —Mr Speaker, it is my impression that my point of order was correctly made under Standing Order 321.


Mr MALCOLM FRASER —It might help the honourable gentleman if I advise him that the piece of paper from which I am speaking contains notes which are not even copious. The Government is also examining the further recommendations of the Royal Commissioner in relation to the secrecy provisions of the Income Tax Assessment Act. In addition, he has suggested additional powers for royal commissions in relation to search warrants and the compulsion of witnesses. An urgent examination is being conducted into those recommendations. Many honourable members, certainly those on this side of the House, will be interested about the future of the Costigan Royal Commission. Both the Attorney and I have said on more than one occasion that the Commission will have its term of office extended beyond its present period which expires on 31 December this year. There will be continuing activity by the Commission. We are, of course, examining the establishment of a national crimes commission. Some elements of the crimes commission may well take over work that is being undertaken by Mr Costigan. In the meantime, the Attorney will have discussions with Mr Costigan on Friday about how the task force we will establish with the special prosecutor and a further task force we are prepared to establish in co-operation with Victoria in relation to other general matters referred to in the Royal Commissioner's report can be best assisted by the Royal Commissioner, by the evidence available to the Royal Commissioner and by the information and the vast stack of documentation within the files of the Royal Commission. We hope that the activities of the Royal Commissioner and the task forces of the special prosecutor can be co-ordinated in a way which will most effectively lead to prosecution in these matters. I hope that the extensive measures which the Government has taken will have the full support of the Opposition. I hope also that when the legislation for a crimes commission is introduced it will have the full blooded support of the Australian Labor Party.

Opposition members interjecting-


Mr SPEAKER —I say to honourable members of the Opposition that this Parliament is a pinnacle of democracy. If a man cannot be heard in the chamber, where is he to be heard? I ask that the democratic instincts of members of the Opposition lead them to remain silent while the Prime Minister is responding to the motion.


Mr MALCOLM FRASER —Before I come to one or two specific matters that the Leader of the Opposition referred to, the House ought to record the history of the major industry of tax avoidance-where it began and how it began. The genesis of the tax avoidance industry goes back to 1973. It goes back to the Curran scheme. It is worth noting that the then Treasurer, Mr Crean, stated that the government of the day was considering amending the income tax law and expressing a new capital gains tax law so as to counteract the effect of the High Court decision in the Curran case. But through the terms of office of three Treasurers-Mr Crean , Dr Cairns and the present Leader of the Opposition-nothing at all was done. It was in that inactivity that the tax avoidance industry had its genesis and origin.

Opposition members interjecting-


Mr SPEAKER —The right honourable gentleman will resume his seat. I have been drawing the attention of Opposition members to the fact that, even if they disagree with what is being said, in this Parliament a person has the right to be heard. The Prime Minister has the call, and I have asked repeatedly for interjections to cease. Reluctantly, but definitely, I will take action against persons who intervene from here on. I call the Prime Minister.


Mr MALCOLM FRASER —What the Government has done, of course, in recent times is in marked distinction to that because action has been taken on 25 or 26 occasions. We have enacted legislation against over 50 schemes of tax avoidance. We have legislated whenever court action has proved ineffective. There is a pattern of activity by this Government and especially by John Howard as Treasurer which has not been matched by any other government or by any other Treasurer in the history of Australia. It is worth noting that the new anti- avoidance section, Part IVA--


Mr Duffy —He said that the McCabe-Lafranchi report was a political stunt.


Mr SPEAKER —I warn the honourable member for Holt.


Mr Duffy —He said it was a political stunt.


Mr SPEAKER —I name the honourable member for Holt.


Sir James Killen —Mr Speaker, may I ask your indulgence to ask the honourable gentleman to apologise to the Chair and to the House to avoid his being suspended from the House. I ask my friend if he would do that on the basis of the friendship between us.


Mr SPEAKER —I will not accept the suggestion of the Leader of the House. I warned the House and I specifically warned the honourable member for Holt.

Motion (by Sir James Killen) put:

That the honourable member for Holt be suspended from the service of the House.