Sunday, 17 October 2010

Speech in Parliament - Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010 - 18 October 2010

TONY SMITH (Casey) (6.50 pm)—I rise to speak on the Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010. As members of the House would be aware, this bill was introduced in the first week of sittings. TheTax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2009 collapsed prior to the election. It was introduced in November 2009 by the now Minister for Trade, the member for Rankin, then asMinister for Small Business, Independent Contractors and the Service Economy and Minister Assisting the Minister for Finance and Deregulation. The 2009 bill followed, as the Assistant Treasurer pointed out in his introductory speech, a long period of consultation which really began some years earlier.

The bill was referred to the Senate Economics Legislation Committee, which reported in March of this year. I will come back to that because the relevant Senate committee examined the bill in great detail. As the Assistant Treasurer has pointed out, the purpose of the bill is to consolidate the tax secrecy and disclosure provisions that are in his words ‘scattered across 18 taxation acts’. The purpose and the aim is to consolidate that into a single framework. He outlined that purpose during his speech and I have to say on behalf of the shadow Assistant Treasurer, Senator Cormann, whom I am representing at this time, that the coalition of course supports the principles that underpin this bill. We support the consolidation and voiced that when we were in government. In fact, I think it was in 2006 that the public consultation process on just this sort of outcome commenced.

As I said, the bill that proposes this new framework to ‘protect the confidentiality of taxpayer information’ was subject to considerable inquiry by the Senate committee and that Senate committee reported some months ago, in March of this year. The new framework places a general prohibition on the disclosure of taxpayer information and, as I have said, we support this intent. We support effective attempts to provide taxpayers, the ATO and stakeholders with importantclarity and certainty about tax laws.

I will surmise briefly because the bill is quite technical. The bill does permit the disclosure of taxpayer information among government agencies where the public benefit associated with such a disclosure outweighs the need for taxpayer privacy. Such a determination is to be made with regard to the purpose for which the information is to be used, the potential impact on the individual from the disclosure and the subsequent use of the information and whether the new disclosure would represent a significant departure from existing disclosure provisions.

The coalition agrees that effective enforcement of the law might warrant transfer of such information on occasions. However, we would hope and expect that the government would think that this parliament must be vigorous in ensuring that the legislation is subject to appropriate safeguards. The concern of the coalition—and this was voiced many, many months ago in that Senate inquiry, which is why I quite specifically referred to it in my opening remarks—has always been that the legislation as currently drafted does not provide all the safeguards it could and should. Indeed, the Senate inquiry report raised two issues —one unanimously and the other by the minority coalition senators. The first issue relates to the taxpayer privacy specifically but is about the authorisation by a tax officer. The report states in paragraph 3.9 on page 15:

The bill in its current form is silent as to who will make the determination that a specific disclosure is required on the basis that the public benefit of the disclosure outweighs a taxpayer’s privacy. In their submission to the inquiry, the Rule of Law Association of Australia (RoLAA) suggested that such a decision should rest with a senior Tax Officer with at least the classification of Assistant Commissioner. RoLAA further suggested that the officer responsible for making this decision should be required to be independent of the particular business line area which is seeking to disclose the information to ensure impartiality.

That Senate committee, comprising Labor and coalition members and—now I look at the membership of that committee—Independent senator Nick Xenopohon, reported unanimously that:

…. the Government consider amending the bill to reflect that in instances where a determination as to whether the public benefit of a proposed disclosure outweighs taxpayer privacy concerns needs to be made, any decision is required to be made by an appropriately authorised tax officer.

The bill does not do that as it stands today in its current form. To quote the Senate committee:

The bill in its current form is silent on that issue.

That was so compelling to the members of that committee that there was a unanimous recommendation to include additional safeguards in this bill.

The government’s response as far as we can tell, as far as Senator Cormann can tell and as far as his other coalition Senate colleagues can tell, was to remain silent on their own silence in the legislation. To our reckoning the government has not responded to that in any way, shape or form. In fact, when the Assistant Treasurer introduced this bill again in the first week of sittings just a few weeks ago, he referred to the committee report. He said it had been considered by the Senate Economics Committee which recommended it be passed by parliament. He, for whatever reason, failed to mention the other recommendation that the government consider amending the bill to correct this deficiency. The Labor senators on that committee— Senator Hurley, Senator Cameron and Senator Pratt —sat through the hearings, read the submissions and came to the view, which the coalition still holds today, that the bill should be amended. From March 2010 through to the election, the former Assistant Treasurer ignored that recommendation. With the reintroduction of this legislation in this new parliament following the election, the new minister has unfortunately also ignored this recommendation. He referred to the Senate Standing Committee of Privileges, which suggested some amendments, and points out in his speech that those amendments have been adopted, but he is silent on that unanimous recommendation.

The second recommendation within that Senate Economics Committee report—I stress this was a recommendation by coalition senators in additional comments—related to another safeguard issue. It obviously reaffirmed the support of those senators for the unanimous recommendation, but it also raised another important issue that had come to light during the course of the inquiry, which was that with this act, with this consolidation and with these changes there should be regular reviews and regular reporting on the operation of these new provisions and the act itself. Given the issues at stake, which are recognised by everyone in this parliament I would have thought, it is important that there should be that sort of safeguard put in place. In particular it would be for the Commissioner of Taxation to prepare and furnish to the minister a report every two years on how the act is working and on some of the detail behind the decisions taken under the powers within the act. The intention is that the minister receive this report as soon as the commissioner is reasonably able to provide it after 30 June every second year. That report should also ultimately, after a short period of time, be tabled in the parliament. That was an important safeguard that coalition senators recommended in their additional comments in the report way back in March.

I make those very detailed points because the government has had every opportunity to respond to the Senate committee report. It may well be the case that the government was of a mind to simply ignore the Senate committee report and to ignore the considered views of its own senators. The point for this parliament is that those safeguard amendments have been there on the public record for six months or so and the government, in reintroducing the bill, was either ignorant of them or arrogantly dismissive of them, but at no point has it sought to actually address them.

As I said at the outset, this is an important bill. It brings together and consolidates 18 separate acts of parliament that currently contain the powers and it adds some new ones as well. But, as with any bill, it is never right the first time. The government knows this and the Assistant Treasurer will get to know this very well. Later in the week we will be debating a tax law amendment bill and tax law amendment bills contain all manner of things. They contain changes the government has implemented. They contain the implementation of new policies. But they also contain corrections, adjustments and rectifications of errors made in previous legislation.

This legislation has been a long time coming. There has been public consultation and the Senate inquiry at the start of the year was a very important part of it. But the government should listen to the senators who worked on that inquiry. They have ignored the report and they have ignored, with respect to one of the recommendations, their own senators.

The coalition think the government should put in place these appropriate safeguards. On behalf of the coalition and my colleague Senator Cormann, who has followed these issues very closely and who, of course, will deal with them in the other place, I will move two amendments that give effect to precisely these two issues that we regard as important. We regard the safeguards as issues that the government has ignored and we will move the amendments in the hope that the government sees and accepts the need for some improvements on a bill that all members of parliament, I am confident in saying, would regard as an important and necessary piece of legislation. It would be a very arrogant and ignorant government that automatically began this new parliament by doing what they did in the last parliament, which was to ignore the need for these safeguards.

We have some more speakers in this debate but I will circulate the amendments that give effect to those two issues, which I do so on behalf of the coalition and Senator Cormann, the shadow Assistant Treasurer.

And I call on the government to accept the need for these safeguards in a spirit that recognises that difficult and complex pieces of legislation need safeguards in place. So often we come back to legislation again and again, particularly in relation to tax law, to try and correct things that could have been dealt with earlier on.

I sense that we will return to this issue tomorrow, given the hour of the day, but I will circulate the amendments. We urge the government to consider them and to consider the need for them, to see commonsense and not to ignore the bipartisan work of that Senate committee. I refer there, of course, to the unanimous recommendation.

No doubt I will be here at this dispatch box again tomorrow addressing these issues. I know there are some additional speakers in the debate tonight prior to 7.30 pm but I will leave the amendments on the table on behalf of the coalition and urge the government to do what it has not done up until now and that is to address those issues.

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