Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

I speak in support of the R4441Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010. This bill gets the balancing act of the legitimate right of Australian taxpayers to privacy and the public benefit in disclosure of information right, particularly for organisations such as the Australian Taxation Office and ASIC in areas involving fraudulent or criminal activity.

For a long time we have seen names and phrases seeping into the knowledge and understanding of Australian business, accountants and taxpayers such as ‘bottom of the harbour schemes’, ‘Operation Wickenby’ and ‘phoenix activity’. Names like that get out into the public and people start to understand.

No-one wants to see the Australian taxpayer ripped off. When people lose faith in the taxation system and do not pay taxes the Australian public suffers and then we do not have the financial integrity and capacity to deliver on health and hospital services, roads and community infrastructure, education and defence or on other things that matter to the Australian public.

We want to make sure we have a taxation system that people respect, that people feel they can trust, that the normal pursuits of their business and domestic activities can be undertaken and that the information they provide to the Australian Taxation Office in the normal course of their domestic and business arrangements will not be disclosed. There is a public interest in terms of privacy, but a public interest conflicting in terms of the need to disclose information to prevent criminal and fraudulent activity, which will be injurious to the Australian taxation system and to our financial and community life. How to balance this conflict is always difficult.

The legislation before us has aspirational provisions. I am a lawyer of longstanding. I love aspirational paragraphs at the beginning of subdivisions and divisions because they say a lot about what that piece of legislation purports to do. They can, by the way, also influence how judges, magistrates and other judicial officers as well as the public generally interpret that legislation. The objects of the relevant divisions in this legislation talk about the need to protect confidentiality of taxpayers’ affairs. It imposes strict obligation on Taxation officers and others who acquire protected tax information and encourages taxpayers to provide correct information to the Commissioner of Taxation. We need to do that. The commissioner cannot do his job if people do not provide accurate information. There is a need to facilitate efficient and effective government administration and law enforcement by allowing disclosures of protected tax information for specific and appropriate purposes.

Statutory law revision is not a particularly sexy thing. It is not the most inspiring and interesting thing that captures the imagination of the political commentariate. The fact that we have no-one except an AAP journalist up in the gallery is an indication that this is not the sort of legislation that inspires the editor of the Australian to put it on the front page their paper. I do not see members of the Fin talking about this stuff in their paper. I do not expect to see the member for Casey’s learned and lucid comments on the front page of the Australian Financial Review tomorrow. However, this is really important stuff; it really is. We have seen different drafting styles, terminology and nomenclature across a variety of pieces of legislation. What we are doing here is bringing it all into one piece of legislation. We are bringing some sense and simplicity into the disclosure provisions with respect to taxpayer information.

Statutory law revision is an ongoing process. The member for Casey is right: we amend lots of tax laws through schedules. Tax laws amendment bills are the most common pieces of legislation put forward in this House. Taxation law in this country has long reminded us of the need to protect the fundamental rights of the Australian public with respect to confidence in the operation of the system and to privacy. I am a supporter of a bill or a charter of rights. I said in my maiden speech years ago that I thought that was important. The protection of the privacy of taxpayers with respect to the pursuit of their ordinary businesses is really important.

The new framework contained in the legislation continues to prohibit through the provision of criminal offences the unauthorised disclosure of taxpayer information obtained by officials and others. It provides some standardised definitions on issues of tax law, which overcome eccentricities, idiocies and ambiguities. We have not really broadened the disclosure provisions in this legislation. It is not the intention of the legislation to rewrite the whole tax law or to provide the kind of breadth of revision that the member for Casey seems to be asking us to do. This legislation is a matter of clarification and definition. Clear rules are necessary for ongoing disclosure, and of course we have made it an offence for people to disclose information.

There is some history to this legislation; it goes back some time. It is not something that we thought up or that came to our knowledge the day after the election. This legislation has come as a result of a review of taxation secrecy and disclosure provisions undertaken by Treasury in the days of the Howard government in 2006. An exposure draft to the bill was made available when we were in power, back in March 2009. The acceptance of the recommendations of the Treasury review was made by the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, the Hon. Chris Bowen, MP. Many submissions were made to that initial review. According to my research, close to 40 submissions supported the idea of consolidation into a code to make sure that we could go to one place to see what the legislation provided. Governments took up the mantle accordingly. There was an exposure draft, which received an additional 12 submissions in which concerns were outlined in relation to it. There was a Senate Economics Committee inquiry into the legislation, which the member for Casey talked about. He would know very well that not every report made by a committee inquiry, bipartisan or otherwise, results in the government of the day, regardless of which side of politics is in power and sitting on the Treasury benches, accepting every single one of its recommendations.

The purpose of this legislation is to provide consolidation and codification. It provides a comprehensive solution to the problem. It is not about rewriting tax laws or the Income Tax Act, which should not be measured by words but by  weight—it is so heavy. Taxation law affects all of us. I would say that no piece of legislation affects more Australians than the Income Tax Assessment Act. It certainly affects more Australians than any criminal code or criminal law of any state, WorkCover legislation or the child support regime under the Family Law Act. It covers all of it. Every taxpayer in the country is affected by the Income Tax Assessment Act and by the need for confidentiality and security under that law. There are benefits to this legislation. There are benefits to getting rid of inconsistency. There are benefits to making sure that there is a new framework that provides for prescribed offences, serious offences, that will act as a disincentive for taxation officials and others to misuse taxpayer information.

But there are also in the bill some new disclosure provisions in which the public benefit does outweigh taxpayer privacy, and they relate to information to the Australian Securities and Investments Commission, ASIC. I think they are important. I think we need to give ASIC greater powers to deal with areas of corporation difficulties, director malfeasance and taxation investigation because clearly large companies and wealthy individuals can get access to the kinds of information and assistance through accounting and legal advice that the average taxpayer cannot access. Having been involved in my old law firm in lots of different cases involving taxpayers in litigation, I can say that we need to empower ASIC with greater capacity to get information to ensure that fraudulent phoenix activity and other kinds of activity which are harmful to the Australian taxation system and its integrity and operation can be investigated. I am very happy to support legislation that will simplify and make more consistent taxation law in this country and I commend the legislation to the House.

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