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Thursday, 17 November 1983
Page: 2896

Mr BRUMBY(5.03) —I shall keep my remarks on the Bank Account Debits Tax Legislation Amendment Bill and the Taxation Administration Amendment Bill relatively brief. They are both straightforward pieces of legislation and they are not opposed by the Opposition. I commence my remarks on the Taxation Administration Amendment Bill. Its purpose, as has been noted, is to provide a uniform system throughout Australia of service by post of summonses issued out of a court of summary jurisdiction in respect of certain non-indictable offences under the taxation laws. Postal services of summonses under the proposed amendments will be limited to summonses in respect of offences for which the only available penalty is a pecuniary one.

I think it is worth saying by way of background that more than 60,000 summonses are served annually throughout Australia for non-indictable offences against the taxation laws. Of those more than 50 per cent are served in New South Wales. In States where the summonses are served personally by State police officers the State authorities, and certainly police associations, have for some time expressed concern about the use of police officers for such work. The large volume of summonses presently being served personally could be seen to be an unnecessary waste of resources of both the State police forces and officers of the Australian Taxation Office who serve summonses personally in many capital cities. Members of the New South Wales police, to show their growing discontent with the present system, have, I think, refused in some areas to serve any further taxation summonses. I think it was said by the Deputy Leader of the Opposition (Mr Howard) when he was talking about his past practice as a lawyer that concern has been expressed by many people about the use of very important and precious police time to serve summonses for non-indictable offences. It should be noted that in some States taxation summonses are already served by mail under the relevant State laws. That is occurring at present in Victoria, South Australia and Queensland, but in Western Australia, Tasmania and, very importantly, New South Wales, summonses are still served personally.

The service of summonses by post will be restricted, as I have said, to taxation offences which attract only a pecuniary penalty and they will be subject to a system of safeguards. Under the system proposed summonses will be served by ordinary post and after conviction the following procedure will be followed: Firstly, the defendant will be advised by ordinary post of conviction and the amount of the fine. Secondly, 21 days will be allowed for payment of the fine. Thirdly, non-payment of the fine will be followed by personal service of a notice that the defendant has 14 days to pay the fine or seek a further hearing before a warrant of commitment is served. Fourthly, the warrant of commitment will follow 14 days after the failure to meet the requirements of the personally served warning notice. So very good safeguards are built into this legislation. It should also be emphasised that the service of notices preceding the warning notice will be by ordinary mail and not certified mail. In a number of States the authorising service by mail has shown addressees often refuse to accept the delivery of official looking mail. Safeguards will operate to ensure that a defendant who fails to receive postal notices will not be committed without further action being taken by taxation authorities. As I have said, this legislation is very sound. It is a common-sense piece of legislation and it has the support of both the Government and the Opposition. I certainly commend it.

I now speak briefly on the Bank Account Debits Tax Legislation Amendment Bill. That tax was, of course, part of the former Government's 1982-83 Budget. The legislation was enacted in 1982. It was announced before the Federal election in March that 1 April this year would be proclaimed as the date of commencement of the tax. Following the election our Government decided to proceed with the implementation of that tax from 1 April but we also announced, very importantly, that the operation of the tax, including the appropriateness or otherwise of exemptions, would be reviewed after six months. We heard some comments previously from the Deputy Leader of the Opposition concerning those exemptions and I am pleased that he accepts responsibility for the original legislation and some of the difficulties it has created for certain voluntary organisations. I am certainly delighted to learn that the review of the bank account debits tax has already commenced in the Taxation Office. I have also received many representations concerning the operation of that tax, particularly from school groups and parents councils and, where they still remain, mothers clubs and parents groups. A number of petitions from schools and parents in my electorate have been lodged on that very matter. I certainly agree that the Minister for Houseing and Construction (Mr Hurford) would make himself a very popular person if some exemptions were provided in that area.

Mr Hurford —Increasingly popular.

Mr BRUMBY —I should have said that. The Minister was in the electorate of Bendigo only on Friday of last week speaking to representatives of housing societies and co-operatives. What he had to say about the building industry was extremely well received by everyone there. I do not need to emphasise for members of this House how well the building industry has taken off with the change of government and the excellent work of the Minister for Housing and Construction. While I do not want to get off the topic we are discussing, I was delighted to learn, as the Minister indicated in my electorate, that since the commencement of the operation of the first home buyers scheme on 1 October more than 170 applications have been received in Bendigo from single people and couples who want to buy their first homes. Of those, some 12 have already received their cash payments, their grants from the Commonwealth. Of course, that is wonderful for those people wanting to buy their first home. I mention that because, if the Minister were to exempt the operations of parents councils and mothers clubs at schools from this bank debits tax, the Minister would be even more popular than he is at present.

Returning to the Bill and the background to it, I think it is worth saying that , subject to the existing exemptions-which include public benevolent and religious bodies, hospitals, certain accounts of schools, government departments and instrumentalities, foreign diplomatic and consular personnel and international organisations-the debits that are made to cheque accounts are made , where the amount concerned is less than $100, at the rate of 10c; where the amount is between $100 and $500, at the rate of 25c; where the amount is more than $500 but less than $5,000, at the rate of 50c; and where the amount is $5, 000 or more, at the rate of $1. I mention that because the general concept of this tax is that of a broad-based tax of wide application at a very modest rate. The estimate of revenue to be collected from this tax run at about $16m per month or $200m over a full year. I understand that at the moment the collections are running virtually at that amount, at about $15m per month.

Under the operation of the tax within the terms of the 1982 Act, a bank which is liable to pay tax on debits to taxable accounts is given a statutory right to recover the tax from the account holders concerned. Over recent times doubts have, for largely technical reasons, been expressed about the constitutional validity of that particular aspect of the Act. The amendments proposed by this Bill will remove these doubts by imposing liability for the tax jointly and severally on both the bank and the account holder. In these circumstances the bank concerned and the account holder will each have a legal obligation to pay the tax involved and those obligations will be satisifed by payment of the tax by either party. The Commissioner of Taxation will, however, continue to look to the banks in the first instance for the payment of the tax. Where a bank pays the tax, the existing provision of the law will authorise the bank to recover from the account holder concerned an amount equal to the amount of the tax.

Other amendments to the Bill are, of course, largely of a consequential nature. As I have said, the legislation is well supported. It is a straightforward and common-sense piece of legislation and I certainly commend it to the House.