Jason Falinski (Mackellar, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Tax and Revenue, I present the committee's report entitled 2018-19 Commissioner of Taxation annual report, together with the minutes of proceedings. I seek leave to make a short statement in connection with the report.

Leave granted.

I have often said in this place that tax collectors are not the most popular people in the world. Indeed, the Bible records that, when Jesus was asked to find the lowest of the low to show the populous of the Roman Empire that we should be forgiving of all people, amongst those most hated were tax collectors that he invited into his home for dinner. We, I am happy to say, on the House committee for tax and revenue find tax collectors in Australia to be very pleasant individuals who we would happily have dinner with at any particular point in time.

We have over the last two years faced enormous challenges in this country. Literally, at one point we thought that we would see most of the economy fall off a cliff. In that moment this parliament, this government and the people of Australia relied more than ever on the Australian Taxation Office to deliver payments to people who were most in need of them in an efficient and effective way that ensured that it was not to be abused in the long or the short term. This is something that very few other nations have the capacity for and the ability to do and to rely on. We take many of our bureaucratic functions in this country for granted. Indeed, we are very good at, from time to time, being abusive when it doesn't go our way, but the Australian Taxation Office showed in this moment and at that time both the importance of investing in these institutions and the bureaucracy that allowed us to move from one side of that crisis to the end of that crisis. Warren Buffett says that you should criticise in general and thank specifically. I don't have time to thank all the people in the Australian Taxation Office who made this possible, but I would like to note the leadership of Chris Jordan, Jeremy Hirschhorn and Melinda Smith in achieving this magnificent outcome.

The report that I have just presented to the House makes a number of recommendations which I would like to note, but there are three that I would like to note very quickly. The first is the Australian Business Register. This is a critically important piece of infrastructure. If implemented properly, it could see the end of phoenixing in this country and the end of abuse of people who have no opportunity or recourse to the court system to ensure that they can have their debts paid. Our report urges the federal government to go further than it already has on this and look at implementing blockchain as the underlying infrastructure for those registries, in ensuring that we have world-best outcomes that will enable all sorts of people to undertake data analysis to ensure that phoenixing doesn't occur.

The second is the Australian Charities and Not-for-profits Commission. The deputy chair, the member for Parramatta, was intimately involved in the establishment of this commission, so I bow to her greater knowledge. But during the inquiry what we found was that there are a number of organisations that sit within the ACNC, such as the Catholic school system, who are already heavily regulated by a number of other bodies. The inquiry queried not so much whether they should or shouldn't be regulated by the ACNC—my personal view is that they shouldn't—but what level of regulation they have while we have other charities which are fundraising for noble causes but where the people giving those charities money take that on trust. We have too many charities in Australia whose cost-to-income ratio is above 90 per cent on marketing and administration, and that is not what people believe that they are giving their money to when they donate those things. So a better allocation of resources by the ACNC may see a major improvement in that sector.

It was the Emperor Diocletian, who saw the decline of the Roman Empire, who said that civil liberties are adjusted to tax systems; tax systems are never adjusted to our civil liberties. Our tax system has too many disputes, it is too complex and it is too difficult for ordinary Australians and small businesses to navigate. This report makes some very specific recommendations around the implementation of a taxpayer advocate similar to that in the United States: a person who sits and is embedded in the tax office to represent the interests of ordinary Australians in how the tax system is administered. The Inspector-General of Taxation has done an excellent job. Her role needs to be upgraded, and her role needs to include sitting in the board meetings and management meetings of the ATO. We have seen in the US that the implementation of a taxpayer advocate has led to the cost of collecting tax declining, has seen trust in the tax system and the administration of the tax system go up, has seen disputes fall and has made it possible for the United States government to administer their tax system in a more efficient and effective way, and I suspect it has also had the result of better and more effective tax regulations coming to the fore in the United States, as people were able to take into account what was going on where the rubber meets the road at the coalface of the collection of tax, rather than the sort of ethereal principle that we can sometimes talk about in this chamber.

The importance of the taxpayer bill of rights also should not be underestimated. You can't have a taxpayer advocate unless ordinary Australians have a bill of rights that they can find themselves relying upon. In Australia at the moment, the onus of proof for a tax debt lies not on the tax office, not on the government, but on the individual. This is onerous and unfair and reverses all the principles of common law that we understand and know. That needs to change, and a bill of rights should enshrine that. The second thing that most Australians will be surprised to hear is that, once the tax commissioner decides that they owe the tax office money, that debt becomes payable even if it is in dispute, even if it is in front of a court being argued about. That needs to change as well. A debt should only be payable once it has been confirmed by all the proper rules.

The truth is that Emperor Diocletian was right. It is the role of this chamber to ensure that our tax system adjusts to the civil liberties of ordinary Australians and not the other way around. I commend the report to the House.

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