Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

The member for Batman wants me to try. I will think about that. This is the government’s attempt—a very weak attempt—to show that it is embarking upon taxation reform.

Since this government came to office in 1996, the tax act—and the member for Rankin knows this only too well—has expanded to 10,000 pages. So 1,000 pages a year over 10 years is not a bad effort. Yet this government was going to reduce taxation burdens and compliance, but there are now 10,000 extra pages. Out of desperation to demonstrate some attempt at reform—and probably off the very good work of the member for Rankin, who was in here on a daily basis embarrassing the government over the enormity of the tax act—the government came up with this plan to ask the Board of Taxation to look at the inoperative provisions that might exist in the act. So, if you find inoperative provisions and then get rid of them, you can say that you are reducing the tax act in volume terms.

In 2003 the Board of Taxation undertook that exercise, as instructed by the government. It finally reported to the Treasurer in October 2005. The sheer amount of time that it took the Board of Taxation to undertake the task is in itself an indication of how difficult a task it was to get through a tax act that is 10,000 pages long—an act that has been through the trauma of the change from the wholesale sales tax system to the GST. In October 2005, the board told the Treasurer that it had identified 1,900 pages of inoperative provisions. You can imagine the Treasurer’s disappointment. He had gone to 10,000 pages. He thought he had a bit of a stunt, a bit of a plan, a political fix to get the Board of Taxation to give him some recommendations that would show that he was on the job—that he was reducing the size of the act. But 1,900 pages was not going to deliver for him by any means. So what did he do? He sought to make it larger. He went digging for other provisions, many of them going to wholesale sales tax and other areas that were not the focus of his original proposal. Remember: we are talking about income tax not wholesale sales tax. In any case, the Treasurer managed to grow the number of pages to some 4,100, and that is the issue we are considering today.

It is the operative provisions of the tax act that are of concern to tax practitioners and others who deal with the tax act, not the inoperative provisions. I do not see too many people running around concerned about parts of the tax act that do not apply to them or are not relevant to them anymore. They are worried about the operative provisions. Major commercial publishers have agreed to print an archived volume of the repealed provisions, so even these repealed provisions will not disappear from the shelves of tax practitioners. Savings provisions come into operation by virtue of the Acts Interpretation Act, which ensures that repeal does not affect the operation of those parts of the act which were in force at the time the taxpayer undertook the activity. So to claim that 4,100 pages have been cut out of the tax act is grossly, deliberately and misleadingly exaggerated. The major problem is the operative provisions.

The economic benefits of this measure are not significant whereas real reductions in the compliance costs of tax for small business and for individuals would enhance returns, economic growth, employment and tax revenue and would lead to lower prices in more competitive markets. This bill is a missed opportunity for our Treasurer, who we know is lazy. That is the bottom line here. We know that his backbench knows he is lazy too; that is why he ran away from the leadership fight.

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