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Anti-avoidance: the street Costello won't walk.

Anti-Avoidance: The Street Costello Won't Walk

 

Simon Crean - Shadow Treasurer

 

Media Statement - 20 April 2000

 

Cracking down on tax avoidance is a street that Peter Costello won't walk. Just look at his record:

 

• 1. In 1994 and 1995 he opposed "root and branch" Labor's attempts to stamp out tax avoidance share schemes used by wealthy individuals, schemes that have flourished since 1996 and have involved at least $1,500 million according to the Tax Office. He knew they were dodgy. According to a confidential submission he took to Shadow Ministry at the time, he stated that: 

 

○ The [Labor] Government's decision to impose the fringe benefits tax on employee share acquisition schemes is motivated by the desire to stamp out potential abuse of such schemes. 

 

He then described potential abuses of the system, but with breathtaking opportunism, recommended that the Coalition "vote against the entire Bill". 

 

• 2. In the 1996 Budget he dropped Labor's Bill on income alienation, which would have yielded around $400-$500 million per year on an ongoing basis, and junked Labor's commitment to ongoing work in this area, stating "The Government has decided not to proceed with either of these proposals." 

 

• 3. In the 1996 and 1997 Budgets he watered down Labor's "trafficking in trust losses" anti-avoidance measures. 

 

• 4. In 1997 he opposed Labor amendments to the Charter of Budget Honesty which would have made it mandatory for the Budget Papers to include an independent report from the Taxation Commissioner and the Secretary to the Treasury identifying material threats to the tax base, so that the Treasurer's action or lack of it in addressing these tax avoidance threats could be publicly monitored. 

 

• 5. In May 1999 he allowed a special GST exemption for casino high rollers. 

 

• 6. In September 1999 he deferred yet again legislation to crack down on the misuse of trusts, despite promising to act on this since 1997. 

 

• 7. In June 1999 he introduced a Bill to allow tax deductibility for donations to organisations like the Greenfields Foundation, even where they provide benefits to political parties. He then voted against Labor's amendment that would have closed off this loophole. 

 

• 8. In April 2000 he walked away from a commitment on closing-off abuses of the tax system in relation to alienation of personal services income, non-commercial losses and tax shelters, at a cost to the ordinary Australian taxpayer of $700 million. Failure to act on the first of these alone would put at risk up to $3,000 million a year, according to business tax expert John Ralph.

 

Peter Costello's unwillingness to act on these risks to the revenue base has already cost ordinary Australian taxpayers thousands of millions of dollars. It's hard work, but it's a street he just won't walk.

 

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.