Arthur Sinodinos (NSW, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Hansard source

I rise to support my colleagues in their remarks on the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013. I do so wearing my hat as chairman of the coalition's deregulation task force. Yet again, after all the attention that regulation and deregulation have received over the last few years, we have a classic case of a bill which really could do with more genuine consultation with the private sector. If anything, I think it brings to mind that the interface between what the tax office thinks business should be doing and what business thinks business should be doing seems to be missing. There is no interface and there seems to be quite a big gulf of understanding.

I notice that the philosophy being spoken about in this place is that, in effect, tax should be out of the equation and we should be able to judge an activity by whether it would occur in the absence of taxation considerations. That is all very well from first principles, but in the real world people have to react to the tax system that they face. My concern is that many of the cases—and they have been talked about by my colleagues—that the tax office may have selected to use as a basis for taking people to court may not have been the right cases. The question then becomes whether there is a process within the tax office to look at itself, if you like, and consider whether it would have a better process for judging cases which would be successful.

Last year the Inspector-General of Taxation reviewed the ATO's management of litigation and found the success rate before the courts to be 56 per cent in 2009-10, 47 per cent in 2010-11 and 45 per cent in 2011-12. He went on to note that some industry stakeholders held the view that the reason for these losses may be due to the ATO's poor case selection of matters they considered appropriate to litigate. I notice that the new tax commissioner is seeking to take some action in terms of the split between, if you like, the prosecutorial part of the tax office and those who appeal cases and the like. I encourage the tax commissioner to do what he can to shake up and change the culture within the tax office. We cannot keep acting in this place to increase the volume of legislation to deal with this. We need less regulation, not more regulation. For that, among other reasons, we will be opposing this bill.