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

The Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009 follows on from the substantive bill that passed through in March of this year. That bill, the Tax Agent Services Bill, introduced national regulation for all tax practitioners. It was a bill that had the full support of the coalition. The new tax agent services regime will mean that for the first time there will be a single national regime governing the registration and regulation of tax practitioners.

This second bill before us today contains a number of consequential amendments contained in a couple of schedules. The first schedule includes the safe harbour provisions that protect taxpayers from administrative penalties that otherwise would arise from certain shortfalls or late lodgements. It also provides protection to taxpayers who provide their tax agents with all required information but their tax agent then fails to take reasonable care by making a false or misleading statement or by failing to lodge a return. This will provide certainty and confidence for all of those taxpayers who use a tax agent to manage their affairs. The schedule also amends existing law to reflect the changes to definitions and to include references to the new tax agent services regime. All of these changes ensure that the tax agent services regime will operate correctly with existing tax legislation.

The second schedule provides for the transition from the current state based registration system to the new national system. It includes provisions to ensure that those tax agents who are currently providing tax agent services will be granted registration through that transitional period, which is a three-year period, and also includes certain entities that are not currently required to be registered. It also includes provisions to register those specialist tax advisers, such as those who provide tax advice in the research and development area, regardless of their ability to meet the registration requirements. Schedule 2 also includes provisions to transfer all the responsibilities and roles of those existing boards at the state level to the new national Tax Agents Board. The schedule will ensure that the new board will be able to adopt all of the functions of those existing boards at the state level across Australia and also ensure that the roles that those boards are playing at the moment in legal proceedings and inquiries will be continued by the new national board.

In conclusion, this bill does not itself include the requirements that tax agents must meet for registration or the requirements for associations to be recognised as professional associations, or a definition of such professional associations, because, we are told, these will be included in regulations sometime in the future—in the not too distant future, we hope and we are told. Those regulations will include requirements for registration, definition of professional associations, fees for registration application, allowances for appearing before the board, obligations of the commissioner and the like. We note that Treasury undertook public consultation on the draft regulations in August.

The tax agents regime itself, of course, has undergone a very long process of consultation and development dating back more than 10 years. The coalition former government consulted very heavily in this area. The government have too, and we encourage them to continue to do that. It is a technical area but something, when this regime comes into play, that will be very much welcomed and is very much in the interests of all Australian taxpayers and tax agents.

The intent of this reform has always been to require those who provide a tax or BAS service for a fee to be registered. It has also always been its intent that those who manage their own tax affairs in their own business will not be subject to the requirements. Those intentions were reflected in the draft material that the coalition former government worked on in the consultations that occurred over those years, and we obviously take it in good faith that the current government intends to maintain the original intention that the tax agent services regime would cover those who provide their service for a fee.

There is obviously some concern about the scope of the regulations, and I would encourage the government to table those regulations soon and to continue their consultation on those matters to provide certainty and finality to what, I say in conclusion and in a bipartisan way, has been a very long but necessary and important reform that will be a step forward in tax administration.

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

I rise to speak in support of the Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009. When I started in legal practice back in 1983, the firm I worked for was a firm now known as Walker Pender in Ipswich. The day I walked in I saw people coming one after another into the offices there and I asked the senior partner: ‘Who are all these people? What are they doing? They can’t all have legal issues.’ He told me: ‘They’re people coming to get their tax affairs in order. They do this every year.’ There were farmers, small business operators, large business operators, individuals. They were registered tax agents and they were meeting people at the coalface with legal issues. From there they got their wills done and their conveyancing done, along with any other issues dealt with that caused them problems or conflict or travails in their lives.

This tax law may be esoteric, it may be a bit unsexy, but it relates to where people meet the tax office. They do not go into the Commissioner of Taxation and have meetings with him when they file their tax returns, but they do meet with their tax agent. When small business operators do their BASs they need someone who can provide them with accurate advice, collate the data and ensure that they comply with the laws, because across the whole country, and certainly in my electorate, people generally do the right thing when it comes to tax law and when it comes to doing their BAS.

The transitional provisions in this legislation really build on the national approach we have undertaken with respect to the creation of the independent Tax Practitioners Board to replace the state based systems. A lot of people think that we members of parliament come down here and fight about every issue. Sure, we have our disagreements. The member for Mayo over there and I have had plenty of disagreements about Work Choices and other issues. But the truth of the matter is that on many pieces of legislation we agree, because most people come to this place with good intentions and want to serve their local communities.

The legislation before us, the Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill, builds on the Tax Agent Services Bill, which has an impact on people’s lives almost daily, because any person who is in business knows that on a daily basis they think about their BAS.I was in business for 20 years and I know what it is like to run a business. I know it takes a lot of effort and it takes risk. I know what it does in terms of getting everything together, making sure your staff keep records on computers of what goes in and what goes out, the fees that are rendered and services that are undertaken, and making sure that you spend money appropriately in a way that is prudent and fiscally responsible. When it comes to meeting with my tax agent and talking to him about issues, I know that I want to minimise my tax, as Kerry Packer once said, but in a lawful way.

This legislation has a number of amendments. They are minor and they are technical, as the member for Casey said. They are in relation to reducing two safe harbour provisions and about making minor amendments that provide the disclosure information for the new Tax Practitioners Board under the act to the Commissioner of Taxation. They are also about ensuring a transition with respect to tax agents and those involved in BAS advice in a way that provides as little disruption as possible in the new regime.

For those people who are listening to parliament, this bill demonstrates the government’s commitment to the integrity of the tax system. It demonstrates that we want to make sure that we have a tax system in this country that works efficiently and effectively, and that provides certainty to both consumers and tax agents. We need to make sure that we have a national approach. This is an example of bipartisan cooperation with the states and territories through a COAG process that overcomes the rigidities and eccentricities of our federal system of government. I am sure many of us in this place would like to go back 100 years and give a bit of sage advice to Barton, Watson, Parkes, Fisher and Hughes, and to many of the people who were involved in the process of forming our Federation. This piece of legislation and the previous one, the substantive bill, are great examples of the COAG process working.

What are we doing with this legislation? We are establishing, as I said, a national Tax Practitioners Board. The legislation, the Tax Agents Services Bill 2008 was introduced into the parliament on 13 November 2008 and the Tax Agents Services Act 2009 received royal assent on 26 March 2009. That board is a statutory authority within the Australian Taxation Office and it requires entities that provide tax agent services and business activity statement services to be registered. And so they should. We do not want people out there who are rogues and who do not know what they are doing when they are meeting our constituents, the Australian public, every day and giving them advice. There are qualifications that must be met. There are minimum standards which we require. You do that in nearly every job whether you are a real estate agent, a lawyer, an accountant, a school teacher or a doctor. Every profession must have minimum qualifications. There are two types of registration; one being a tax agent registration and the other being a BAS agent registration. That is appropriate because people have different roles in different circumstances.

There are also character tests and there are a lot of professions as well that require character tests as well as minimum educational qualifications. It is important that people understand why we have done this. It is important for people to understand that, when it comes to a board, there needs to be a professional code of conduct because we do want people to give the highest standards of advice. There needs to be disciplinary sanctions as well in all circumstances. We cannot have people giving advice in relation to these important areas of the law without having sanction if they engage in misconduct.

The technical amendments here do provide some changes. They want to align the legislation with the government’s intention that BAS agents have sufficient though not excessive time to obtain the necessary qualifications and/or relevant experience in order to meet all the registration requirements at the time of their registration renewal. Without the amendments here, BAS agents that transition to the new regime could gain an unintended advantage by allowing their registration to lapse before they apply for re-registration and obtain a minimum three-years of registration. That is not the government’s intention.

Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

Order! The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.