Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

The Tax Agent Services Bill 2008 will have the opposition’s full support in this House and in the other place. The bill will introduce a national regulation regime for all tax practitioners and ensure that for the first time there is a single regime governing the registration and regulation of tax practitioners in Australia. The new regulatory system will replace the existing system in Part VIIA of the Income Tax Assessment Act 1936. There have been substantial reforms to the tax system over past decades that have brought about a requirement for a modern regime to regulate tax agents. Some of these changes include the introduction of self-assessment, which has been with us for some time, from the late 1980s, and, of course, the introduction of a goods and services tax by the former coalition government.

This bill and the reform in this area were developed by the former coalition government. In the late 1990s, proposals for a new tax agents regime had been developed through extensive consultation by the Australian Taxation Office with tax practitioners and all of those other relevant professional associations. On 6 April 1998 the then Assistant Treasurer, Senator Rod Kemp, announced that a new legislative framework for tax agent services had been approved, and the new regime was in fact scheduled to come into effect back in 1999 and 2000. Of course, at that time the former government was embarking on the largest tax reform in Australia’s history with the introduction of the new tax system and the introduction of the goods and services tax within that. With those comprehensive reforms taking place and all the bedding down that was required in the following months the tax profession requested that the new regime for tax agents be delayed to allow practitioners to contend with the implementation back at that time.

Soon after the reforms had been implemented the coalition government reconvened a working group of tax associations to consider the new regulatory regime. In 2005 the government requested that Treasury undertake some confidential consultation on a detailed discussion paper. Following that a draft bill and regulations were produced for confidential consultation with industry stakeholders. This was before the then Minister for Revenue and Assistant Treasurer, the member for Dickson, released a draft bill, regulations and explanatory materials for public consultation and comment in May 2007.

We now have before us the end part of that extensive consultation that has been approached in a bipartisan way over that period. Of course it represents, from our perspective on this side of the House, the coalition’s strong support for reform in this area. As I said earlier, the bill will introduce a new regime to regulate the provision of tax agent services. The bill will provide protection for those who use tax agent services. It will establish a national practitioners board to replace the existing state based tax agent boards. It will be a statutory authority within the ATO; however, its functions and powers are to be vested independently of the Commissioner of Taxation. This single national board will provide a consistent, nation-wide system of tax agent regulation and in doing so will ensure consistency in the registration and regulation of tax practitioners.

The bill will require that all entities that provide tax agent services or BAS services—business activity statement services—for a fee must be registered with the board. Apart from registering those who provide tax agent services the board will also set important education and qualification requirements for registration itself. It will allow a more flexible approach to regulating tax practitioners through a wider range of disciplinary sanctions, including replacing criminal penalties with civil penalties for certain misconduct by agents and unregistered entities.

In addition, the bill will create a code of practice, as we have read in the explanatory memorandum and heard from the minister both in this House and outside in the public domain. It will provide a safe harbour from tax shortfall penalties for false and misleading statements for taxpayers where they engage a registered tax agent to prepare their return and take reasonable care to provide that person with all the information necessary to complete and lodge their return.

The bill before us was referred to the Senate Standing Committee on Economics back in September by my colleague Senator Coonan. The committee held a hearing just last Friday and received submissions from more than 30 interested parties. I know a number of issues were raised at the hearing, including the registration status of an entity if the tax agent dies. Under the current law the registration is revoked when a tax agent dies but the bill provides for a minimum period of 28 days from when the board issues a notice to revoke registration. I am informed that the new board will be able to issue guidelines on dealing with the succession of an entity.

Another concern was the absence of transitional provisions and regulations along with this bill. It would, of course, have been preferable if in this debate and in considering this bill the associated transitional arrangements and regulations had been available. The evidence from the Treasury at the Senate committee hearing was that a reason for this was that the government intended to conduct a further round of consultation on those transitional arrangements. The introduction of the regime will of course affect those who provide tax agent services. There has been long consultation on the intent of the bill and what it will mean. It will also of course have an effect on all taxpayers who use the services of tax agents to manage their affairs. It would have been preferable if some of the transitional arrangements and the regulations had been available for concurrent debate with this bill.

The only point I would make is that—whilst we fully support this bill and we will support it in the other place; we think it is an important reform—there does unfortunately seem to be a growing trend by the government of producing legislation in a variety of fields and leaving a lot of the regulations and the guidelines until later. Of course, it is only in the regulations and the guidelines in so many instances that clarity can be found for those professional associations affected by the measures. We welcome the fact that Treasury have given evidence that they will have a further round of consultation on those arrangements, and that is important nonetheless. As I said, we will be supporting this bill. The committee tabled its report in the Senate today, 12 February. There is broad support for the bill right throughout the tax agent community in Australia. It is something that will improve tax agent services in so many respects and it has the opposition’s support.

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