Kay Hull (Riverina, National Party) Share this | Hansard source

I will go to the most important part of my speech. That way, hopefully, I will get through it. I want to concentrate on an area which is very important to me but which I had entirely missed when I looked through this bill—that is, the measures to deter the promotion of tax exploitation schemes. Over the last 16 to 18 months, I have worked very closely with many groups of constituents in my electorate on an employment benefit arrangement scheme. All the good people in my electorate who were caught up in the scheme were absolutely in despair at the rulings of the Australian Taxation Office. A group of slick operators came through my electorate. My constituents are hardworking farming families and small business people. Generally, they are all-round, good Australians and are looking to save for their futures. Many of them continued to pay into the employment benefit arrangement scheme, claiming no deductions, after the scheme came under question by the Taxation Office. This caused enormous despair in my electorate for people who were looking at succession planning, investing in superannuation and trying to ensure that their family farms and family businesses were well set up.

These people had attended a presentation from a group of slick operators and everything appeared to be in order. There appeared to be a product ruling and a QC’s advice on the EBA scheme. My constituents use accountants, because that is what accountants are good at; otherwise, they could not do this for themselves. They are not experts in tax law and they relied on the presenters of this EBA scheme to tell them the truth. Unfortunately, when the Commissioner of Taxation started to investigate this scheme we found that the product ruling and the QC’s opinion were not in fact for the scheme my constituents invested in. They found themselves in a very difficult situation. They owed debts, they had longstanding interest payments and they were in significant financial difficulty—through, I believe, no fault of their own.

It is said that many of these people were looking at direct tax avoidance. While the preamble to the bill does talk about tax avoidance, people with good intentions do get caught up. I represent people who are in this EBA scheme. I saw the absolute injustice of my constituents owing money and being in a state of despair, causing family disruption, illness and, worst of all, death. It was personally a very difficult issue for us to deal with. These people were bearing all the pain while the tax scheme promoters had all the gain. This was brought to my attention while we fought this case over a number of months. The member for Canning, the member for Mackellar and I made strong representations to many people to try to get this resolved. I must thank the former Minister for Revenue and Assistant Treasurer, Mal Brough, for his determination and effort in assisting me to work through this issue with my constituents and resolve this issue. Most importantly, I commend David Moore, the chief of staff of Minister Brough, who showed so much patience, diligence and willingness to assist my constituents through this issue.

The people who were unwittingly and unknowingly involved in these schemes were bearing all the pain while the promoters had all the gain. So I was quite keen to see something put in place so that in future the promoters of these tax exploitation schemes—if the schemes were not legal instruments and if the promoters did not have individual product rulings and QCs’ opinions on the individual products that they were pushing—would be the ones who could certainly be prosecuted for marketing such schemes and encouraging people to enter them by perhaps sometimes using false and misleading information or, in particular, vague and confusing information. When I was sitting here this morning, waiting for my turn to come up to speak on the amendment bill, I was really wanting to look at attracting skilled migrants to the Riverina area to address the skills shortage and I really wanted to speak on that. However, having come across this bill, I thought that it was more important to speak on this—and I notice that the Chief Opposition Whip has left the chamber so maybe I will get my opportunity to speak for a little longer.

I am very pleased to see schedule 3, covering measures to deter the promotion of tax exploitation schemes, come into the House. I urge the House and the Senate to pass this bill because too many innocent Australian workers, mums, dads and families are getting caught in something that they are not expert in and are then the victims of an enormous financial drain and enormous financial pain. I really must commend my constituents on the way in which they have handled themselves throughout this. Even though they have been in such precarious positions, they have not gone out and blamed anybody. They now recognise that some of the material they were given may have been misleading. I feel sorry for the accountants in my electorate who introduced some of my constituents to these schemes because I firmly believe that the accountants involved were also subject to and the victims of a slick overhead presentation operation that portrayed a product as something that it was not. I am very keen to see this piece of legislation enacted, and I am very keen to see those people who made so much money out of this scheme able to be prosecuted.

I know that the Minister for Revenue and Assistant Treasurer wants to wind this up so I will finish on the need to have an exemption for foreign source income. We have a shortage of skilled workers, doctors, accountants and lawyers in the electorate of Riverina. When you are wanting to attract people into skilled areas—and they could be engineers, scientists or people able to teach in veterinary science—you know that generally these people are very successful in the country they are currently in. If they are not to be penalised by our taxation laws when they come here, you need to have some sort of reprieve from the penalties for them. To allow the minister to finish this debate, I now commend the bill to the House.

See this speech in context