Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

Unless there has been an event in the last hour that I was not aware of, I am not the shadow Treasurer. Firstly, I thank all members who have contributed to this debate: the member for Casey, the member for Robertson, the member for Corio and the member for Oxley. The Tax Agent Services Bill 2008, as several honourable members have highlighted, has been a long time coming. In fact, with the passing yesterday by the House of the Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2008 we see the completion through this process of two of the longest pieces of public policy development in the Treasury’s history—TOFA and the Tax Agent Services Bill. It has been one of the government’s priorities to deal with these two pieces of legislation and get them on the statute books. We have been working hard at that. We wanted to get it done by the end of last year, but it is very good to see this go through very early in the session this year.

The member for Casey argued in the House that it would have been better, preferable, if the transitional bill was in the House at the same time. I agree with him that that would have been ideal. But I took the decision that that would have delayed the processing of this bill quite considerably. We needed to get the transitional bill right. There needs to be a consultation period and, given that this has gone on for so long, we did not want to delay the passage of this bill through the parliament. But, as it happens, today the draft exposure bill for the transitional arrangements has been released for consultation on the same day that this has come in. That is now out for public comment and will be introduced in the not too distant future, once that consultation process has finished. I agree it would have been ideal, but we were faced with the decision of either delaying this even further or bringing the transitional bill in without consultation, and I was not prepared to do that.

As several honourable members have pointed out, this represents a considerable modernisation of the regime—a long overdue modernisation of the regime—that applies to tax agents in this country. It will replace the current law providing for the registration of tax agents, which was introduced in 1943. It is now out of date and inconsistent with the current tax and commercial environment. This bill provides for significant improvements to the existing regulation of the provision of tax agent services through the creation of a national Tax Practitioners Board. This bill provides consistency in the regulation and registration of tax agents and other intermediaries in the tax field.

The requirement that entities providing BAS services—that is, business activity statement services—for a fee must register ensures a level playing field and reflects the expansion of the tax base over recent decades. Of course, BAS servicing is complex, BAS arrangements are complex and difficult, and it is appropriate that BAS operators are registered. The legislated code of professional conduct provides certainty to both agents in terms of the standard of conduct expected of them and to taxpayers in providing a benchmark against which they can evaluate the services that they receive. The introduction of a range of constructive and educative administrative sanctions allows the new board flexibility to respond appropriately to breaches of the code. Furthermore, the application of civil penalties instead of criminal penalties for certain specified misconduct by registered agents and unregistered entities provides an effective deterrent against engaging in prohibited conduct.

The requirement that entities providing BAS services for a fee register as BAS agents has led to some bookkeepers expressing concern about the costs they will incur in order to comply with the requirements in this bill. The key cost for bookkeepers who intend to provide BAS services for a fee is that they are expected to bear the costs associated with obtaining the necessary qualifications for registration. Many such bookkeepers will either already hold the necessary qualifications or be able to seek recognition of prior study and experience from the education provider. In addition, any actual cost incurred is proposed to be spread over at least two years and, in some cases, as many as five years, via the generous transitional arrangements contained in the transitional provisions in the bill that has been exposed for public comment today.

The bill largely regulates the same scope of services as currently regulated. Indeed, the scope of tax agent services as defined in the bill is roughly the same as the scope of services that are prohibited without registration under part VIIA of the Income Tax Assessment Act 1936, as both rely on the definition of taxation law—that is, services that are currently prohibited without registration will be prohibited without registration under the bill. While the scope of the services being regulated will not change dramatically, consistent with the expansion and modification of the tax base to include the GST, capital gains tax, fringe benefits tax and others, the bill strengthens the regulatory environment by accommodating the registration of service providers who specialise in a particular type of tax. In addition, the transitional provisions legislation proposes a generous transitional arrangement for specialists, whereby such entities may register within the first six months without demonstrating that they meet the education and experience requirements. I think that might deal with some of the concerns we have heard from some small elements of the sector in relation to very specialised tax advice.

As I have outlined, the bill provides for significant improvements to the existing regulatory regime. It provides appropriate but flexible regulation of the provision of tax agent services and will improve consistency in the registration of tax agents and other intermediaries in the tax field. It will also enhance the protection of consumers of tax agent services, thereby reducing uncertainty and risk faced by taxpayers. Finally, it will strengthen the integrity of the tax system and the tax industry. The government is committed to implementing these regulatory reforms for the provision of taxation services.

As I say, this bill has been in the pipeline for a very long time. I take this opportunity to thank the Treasury officials who have undertaken numerous rounds of consultations, both under this government and under the previous government. Earlier, there were a lot of concerns about this bill, it is fair to say, in the taxation industry. There have been a lot of representations to the Treasury, to me and to the government about concerns. Those concerns have by and large all disappeared because of the consultation process dealing with those concerns, listening and reflecting their concerns in the bill. That says two things: that the government was prepared to listen to those concerned and that it is a tribute to the consultation process undertaken by the Treasury. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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