Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

Thank you, Madam Deputy Speaker, for the opportunity to speak on the Tax Agent Services Bill 2008. A lot of legislation that comes through this place has a great deal of complexity attached to it, and none more so than taxation law. I feel there is an obligation for all of us as Australians to comply with tax law and to do the best that we possibly can to make sure that we meet all of our responsibilities and obligations under tax law.

The responsibility that we have as members of parliament is to ensure that the regulatory regime and the laws that we put in place are of the best possible quality to ensure that people can and will comply with them and to ensure that people have a fair understanding of what their obligations are. That applies not only to individual taxpayers but also to tax agents and, as has been noted more recently, to people who provide BAS services. It is particularly important that this parliament regularly monitors, reviews and updates the regulation of taxation. This bill does that specifically in relation to tax agent services and it also introduces BAS agents into the law.

There is a heavier reliance today on tax agents due to a range of complex changes over a number of years, particularly with the introduction of the GST and the way that our tax system operates. We have such a highly complex, highly evolved and voluminous set of laws that it is much too complex for the ordinary Australian to do their tax on their own. This is despite that fact that there are online systems and a range of mechanisms in place that are designed to make paying tax and reconciling tax at the end of the financial year easier processes, although I do not know that anyone would use the word ‘easy’ to describe preparing their tax. Over the years tax has become more complex, so there has been more and more need for even simple individual tax returns to be dealt with by tax agents and related organisations. It is critically important that we get regulation right to manage and deal with the people who provide those services.

The Tax Agent Services Bill aims to improve the regulatory environment for the provision of services by tax agents. It has a particular number of objectives specifically to improve consistency in the registration of tax agents so that consumers have confidence that the people that provide those services are properly accredited agents and so that consumers have confidence they are meeting all their obligations. The bill also applies to other intermediaries and regulates to ensure the provision of tax agent services in an appropriate and flexible manner.

It is important, while we are making these changes and improving regulation, that we have at the front of our minds the protection of consumers from unscrupulous tax agents and other service providers. There need to be mechanisms in place that give consumers the protection they need. This bill will reduce the level of uncertainty for taxpayers and the risks that are associated with the self-assessment systems that are currently in place. I think a self-assessment system that is simple enough to use is an integral part of getting the balance right between providing a regulatory regime for self-assessment and ensuring that there is a proper system in place for people who wish to have someone else do their tax for them. I think we struck that balance in this bill by bringing forward some necessary changes. In getting the balance right, it is also important to make sure that the integrity of the tax system and the tax industry is and continues to be intact. This bill goes some way to dealing with those matters.

Of particular note is the introduction of a national Tax Practitioners Board, the members of which will be appointed by a Treasury portfolio minister. That will replace the existing state based tax agents boards. While those boards have done a fantastic job over many years and decades, the reality is that in today’s environment a nationally uniform and credible system that is in one place and covers the whole tax system and the whole country is of critical importance. I believe that today it is no longer acceptable to have different regimes across what is one system at a national level with different rules, processes and applications of time, proceedings, penalties and other matters related to what a state based tax agents board might do. So the introduction of an independent national Tax Practitioners Board is of great importance.

The board’s functions, of course, will include the very important one of registering and disciplining tax agents and BAS agents. It will have a range of powers to ensure that unregistered entities can be registered so that we do not have a situation where people providing these types of services hold themselves to be registered when in fact they are not. It is important to get those elements right, which is what this bill does. The board will also be able to investigate matters and impose sanctions, something very important and appropriate in building consumer confidence in this area.

If there are problems—and mistakes can obviously be made by boards—there will of course be an opportunity for review. That review would be done by the Administrative Appeals Tribunal. Through the normal processes that consumers have when decisions are made that they are not satisfied with, they can seek some redress through the AAT.

It is also the case that boards of this nature need to be accountable and transparent. While the board will be independent, I think it is important that it reports to the parliament and keeps it up to date with its dealings, with its findings, with any sanctions it imposes and with registration numbers so that we are informed of the practices taking place in the community. It will be an important factor in us being able to determine the board’s success or otherwise and problem areas that may arise from time to time. I eagerly await the first report to have a look at the new board when it is fully operational and providing services.

It has been the case in the past that the Australian tax office has provided secretarial services to the state based boards. This will continue but at a national level. So there will be some operational efficiencies—I would go so far as to say some money saved—in that area.

Entities that want to provide tax agent or BAS services—and, of course, BAS services are of a somewhat narrower and more limited capacity—for a fee or some other reward, or who want to place themselves out in the open market to provide these services, will be required to be registered with the new board. There will be two types of registration, tax agent registration and BAS agent registration, and there will be different requirements, as they exist under law, for the sorts of services they can provide and the type of entity they are when they register with the board.

There will be the normal minimum requirements for registration, as one would expect, related to character—these people would have to be of good character—educational qualifications and relevant work experience. This will also be the case for BAS agents, but to a lesser degree in proportion to the services they provide. Again, this is about consumer protection, about ensuring the integrity of the tax system and about ensuring that regulations are met with. In cases where the services are provided by partnerships, companies and organisations and they seek registration, their compliance with the requirements will have to be demonstrated at an organisational level—that is, organisational qualifications and experience to match. For those who want to specialise in particular areas, the same types of rules would apply—that is, the person or organisation would have to demonstrate that they are of good character and meet the minimum requirements based on the specialty area in which they are seeking to be registered.

It is particularly important in the area of tax agent services that there is a professional code or some sort of professional standards and guidelines, as there are in a range of other areas. Those who register will be governed by a legislated code of professional conduct, which will define the professional and ethical standards required of the people or organisations providing the services. Currently, there are only a small number of agents who are required to comply with any such codes of conduct, so the roping-in, through registration, of all the service providers—be they individual entities, partnerships, companies or other organisations—is a move in the right direction and will provide a great deal of confidence to ordinary people and consumers in the products they provide. It is important to note that there will be specific penalties for breaches of codes or ethical standards and for certain conduct.

The idea of this bill is to bring into line a higher level of integrity and compliance. But what it specifically does—which may seem at first glance to be at odds with what people might expect but which is, I think, certainly a move in the right direction—is replace the existing criminal penalties for offences. They will be replaced by civil penalties and injunctions. These civil penalties are a much more appropriate mechanism to discourage certain types of behaviour, and the penalties will be serious enough to match the seriousness of the conduct or offence. The current types of offences are not serious enough to warrant a criminal conviction or imprisonment. Of note here is that significant monetary penalties will apply. This is about deterrence, consumer confidence and the integrity of the tax system, and we want to deter prohibited conduct by people who engage in these areas.

It will be completely appropriate for the board to be able to apply to the Federal Court of Australia for civil penalty orders, in particular, when there is certain conduct by unregistered entities or by registered agents—for example, the making of false statements, misconduct, the provision of misleading information or noncompliance with their responsibilities. Given that that misconduct often has a direct impact on a consumer whom it will affect greatly, there needs to be strong deterrence in those areas, and I fully support the measures that are contained within this bill. Importantly, following on from that, agents or service providers who decide that the civil penalties and monetary or pecuniary penalties are not a deterrent can actually be deregistered—that is, have their registration taken away from them and no longer be allowed to practise. I think it is important to note that there is an escalation through the regulatory environment to ensure that we maintain the integrity of the system.

This bill is widely supported. It has in fact been supported unanimously by interested and affected parties, industry bodies and, I would say, by everyone in this place. I have taken note that there have not been any opposition views expressed about the measures that are contained in this bill.

This bill does a number of key and very simple things. It is about strengthening the integrity of the tax system. It is about providing greater protection—something which I am a huge advocate of and which I think is a very important part of the role that we play in this place. It is also about modernising. It is making sure that our regulatory system keeps pace with the fast-changing world in which we live. Often we keep pace, but at much too slow a rate. So it is good to see that these amendments are being brought before us in this place in a very timely manner. As a government member, it is always nice to be able to stand up and say that we are tidying up work that perhaps should have been done years ago—but I will not make too much comment on that particular point.

This package was developed through extensive consultation with professionals and associations. This is something that has been done with the industry; hence why there has been unanimous support for what is contained in this legislation. It is something that the sector itself appreciates and understands. The measures in this bill will be an advantage for all those professional tax agents, BAS service providers and others involved in this area. They will know that they have a better system in place with better compliance measures. It will weed out the crooks and the shonks and make sure that we have the right people doing the right thing by ordinary Australians.

There are a number of key elements in this reform package—and, obviously, the national Tax Practitioners Board is a key element—which go across a whole range of areas that the Rudd government has been very vocal on in terms of trying to get some uniformity across the nation and replace state based regimes with a consistent, uniform and national platform which is easily understood by everybody, regardless of which state they live in. Particularly for taxpayers that may operate in a variety of states or environments, it makes sense that they need only to comply with one regime across a consistent, understandable and uniform system.

Another element is, of course, the registration of entities and BAS service providers, which is very important in ensuring not only that consumers are protected but also that those who operate in that environment have some certainty about their work and have certainty that they are dealing with other professionals and people who are actually registered. It also goes to the heart of a legislated code of professional conduct—something which should probably be looked at in a whole range of other areas. I was recently involved in a report on franchising where we specifically looked at a code of conduct for that sector. It is strikingly obvious, I think, to a lot of people that, as systems become more complex, more opportunities arise for people to take advantage of others, to abuse their power, to abuse their position and to abuse the complexity contained within systems—no less here in taxation and the provision of tax services or BAS services, and therefore there is a need for us to put in place a set of standards and codes. I am very supportive of that. In fact, I would encourage other ministers to follow the lead of the Assistant Treasurer and other people in this regard. I note that the Assistant Treasurer is here in the House to sum up the debate on this bill. I congratulate him on the work that he has done in protecting consumers and providing greater integrity and certainty in the tax system in Australia. I believe a legislated code of professional conduct is very important and something that will be welcomed by all those who practise in the tax area.

With legislation like this, it is important to be conscious of not placing onerous regulatory burdens on small business and individuals—or, for that matter, doing anything which might affect consumers further down the line and make life harder or more expensive for them in accessing these services. So it is good to see a wider and more flexible range of measures in this bill, including disciplinary sanctions that can be imposed by the board.

The change I mentioned before, of civil penalties and injunctions replacing criminal penalties, is, I think, highly appropriate. It is not always the case that criminal penalties are the best way forward. There are many cases and examples where civil penalties are a much better mechanism. I think there are circumstances—where people make mistakes, sometimes unknowingly and sometimes knowingly in a small capacity that they thought was not important enough to provide—where safe harbour is needed to give people some room to fix those errors. So, where it is identifiable, in certain circumstances and for certain reasons, that a safe harbour is required, I think it is appropriate that it is contained in these measures—and it is. All in all, I am very supportive of this bill, as I know other members of this House are, and I think it is a very important move forward for the protection of consumers and the integrity of the tax system.

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