Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Hansard source

I rise to support the Tax Agent Services Bill 2008. The bill introduces a national regulation regime for all tax practitioners and ensures that for the first time there is a single regime governing the registration and regulation of tax practitioners in Australia. The new regulatory system will replace the existing system in part 7A of the Income Tax Assessment Act 1936.

The history of this bill is that the bill itself and the reform in this area were developed by the former, coalition, government with work commenced in part in the late 1990s, where we had extensive consultation with the Australian Taxation Office and with both tax practitioners and other relevant professional associations. In 1998 the then Assistant Treasurer, Senator Rod Kemp, announced that we had approved a new legislative framework for taxation services to come into effect in 1999 or 2000. That statement was a bit optimistic. At the time, the former government was embarking on the largest tax reform in Australia’s history, with the introduction of the new tax system and the introduction of a goods and services tax within that system. At that time the tax profession itself requested that the new regime for tax agents be delayed to allow practitioners to contend with the implementation of the new tax reforms, due to the comprehensive nature of the reforms themselves and the fact that they wished for a period of bedding down, as it was called.

Shortly after the reforms had been implemented, the former government reconvened a working group of tax associations to consider the new regulatory regime. In 2005, Treasury was requested to undertake some confidential consultations on a detailed discussion paper, which was then released as a draft bill including regulations and explanatory materials for public consultation and comment in May 2007.

The bill before us now is the result of that extensive—even, I dare say, exhaustive—consultation was undertaken over some years and spanned successive ministers and successive governments. It was important to ensure that this new policy to regulate the provision of tax agent services was the correct policy, furthered the industry affected—that is, tax practitioners themselves—and was approved by their clients. So this is a truly comprehensive policy in line with the former government’s strong desire to implement effective tax reform.

The bill itself will provide not only a new regime to regulate the provision of tax agent services but protection for those who use tax agent services. Further, it will establish a national practitioners board to replace the existing state based tax agent boards. It will be a statutory authority within the ATO, but its functions and powers are to be vested independently of the commissioner. This single national board will provide a consistent, nationwide system of tax agent regulation which will ensure consistency in both the registration and the regulation of tax practitioners. In addition, the bill requires that all entities that provide taxation services or BAS, business activity statement, services for a fee and registered with the board, and the board will now set important educational qualification requirements for registration. This will allow a more flexible approach to regulating tax practitioners through a wide range of disciplinary sanctions, including the replacement of criminal penalties with civil penalties for certain misconduct by agents and unregistered entities. The bill will also create a code of practice and provide a safe harbour from tax shortfall penalties for false and misleading statements for taxpayers where they engage a registered tax agent to prepare their return and take reasonable care to provide that person with all the information necessary to complete and lodge their return correctly.

The Senate Standing Committee on Economics tabled its report on its review of this legislation. During proceedings the committee received more than 30 submissions from interested parties. There were some concerns raised during that process which we will obviously be monitoring to ensure that the government and the Treasury stand by their commitments given in evidence to have a further round of consultation on how these arrangements are being implemented, as some areas of concern are not covered and transitional provisions and regulations are not yet available. Frankly, it would have been preferable if some of the transitional arrangements and the regulations had been available for concurrent debate with this bill. I just place on record that we will keep track of Treasury’s promise that they will have a further round of consultation. I think that is very important because, as regulations are provided and people undergo transitional arrangements, some unintended consequences can arise that need to be addressed.

Despite that, we will of course be supporting this bill, as the consultative process, as I have indicated, has been long and intensive and does reflect broad support for the bill right throughout the tax agent community in Australia. It has our support on the basis also that in many respects it will improve services for the customers of tax agents. I commend the bill.