Anne McEwen (SA, Australian Labor Party) Share this | Hansard source

It gives me great pleasure to speak to the Tax Agent Services Bill 2008. This is an industry that I have taken a keen interest in. In fact, my first job on leaving school was working as a junior clerk in a firm of accountants. I had numerous duties, not the least of which was to make the tea for the partners—always an interesting exercise. When I left the firm of accountants’ office I commenced work at the taxation department, and there I saw life from the other side, if you like, for quite a number of years. As well as that, my father was an accountant for all of his life. He did not give up his practice until he was in his 70s. From time to time, I would work in his business, assisting small business people in particular but also individuals to prepare their taxation returns.

Over a considerable period of time, I have noticed developments in both the taxation system and the taxation agent services industry. As we all know—and this has been said by previous speakers—the taxation system has become much more complex, and it is very important that the federal government has intact legislation that has the ability not only to keep tabs on the system but also to provide consumers of the services provided by the tax agent services industry with confidence that their affairs will be handled professionally, that the information provided to the Australian Taxation Office is correct and that the operators from the tax agent services industry are regulated and monitored by the government.

The key objectives of this bill are to improve consistency in the registration of tax agents and other intermediaries and to regulate the provision of tax agent services in an appropriate but flexible way. In the main, we are dealing with small businesses in the tax agent services industry and, while regulation can be a curse, it is also important. As the objectives state, we must do that in a flexible way. Another objective is to enhance the protection of consumers of tax agent services, thereby reducing the level of uncertainty for taxpayers and the risks associated with the self-assessment system, as well as strengthening the integrity of the tax system and the tax industry.

The key elements of this bill include the establishment of the national Tax Practitioners Board. Members of the board will be appointed by a Treasury portfolio minister and the board will replace the existing state based tax agents boards. This is a very welcome development in the industry and reflective of the fact that the taxation system has become much more complex and needs to be addressed at a national level. The board’s key functions will be the registering and disciplining of tax agents and BAS agents. However, it will also have powers to ensure that unregistered entities are not holding themselves out as being registered. It is very important with sensitive matters of organisational tax and individual tax that the people who are dealing with those matters are registered so that we can monitor how they are performing in that important role.

The board will be able to investigate matters and impose sanctions where appropriate, and hopefully that will not happen very often, but it is important that we have that regulatory mechanism in place. The board’s decisions will be appealable to the Administrative Appeals Tribunal in the usual fashion. In addition, the board will be required to report annually to the parliament, and that will give those of us in this chamber and in the other place an opportunity to see how the new system is progressing and whether it is delivering to the Australian people what the government intends it to. The Australian Taxation Office will continue to provide the secretarial services for the board under this bill.

Importantly, the bill deals with registration requirements for tax agents and BAS service providers—those people who provide those services for a fee, who advertise the provision of such services and who hold themselves out as being registered. They will all have to register with the board, and the registration requirements for agents will relate to character as well as minimum educational qualifications and relevant work experience. Senator Pratt shared with us her thoughts about how important it is that people working in this industry do have relevant educational qualifications. As I said earlier, this is a very complex area of the law and not something that can be entered into by people who do not have the appropriate educational qualifications. The government is keen to ensure through this legislation that those educational qualifications are there and are kept up to date with developments in the taxation industry.

Other aspects of the bill include a code of professional conduct. All registered tax agents and BAS agents will be governed by a legislated code of professional conduct, and that will define the professional and ethical standards required of them. Having a code of conduct also, of course, gives consumers of the services provided by this industry a reference point so that they can understand what is expected of the people to whom they are paying money to conduct their taxation affairs. Currently only some tax agents are required to comply with a code of conduct by virtue of their membership of a tax or accounting professional association, but the new code will make it explicit that the standards are expected of all tax agents and BAS agents and will clearly define their roles and responsibilities.

As I mentioned, the bill also includes a capacity for administrative sanctions, civil penalties and injunctions, and they will replace the existing criminal penalties. The flexible range of administrative sanctions that will be available to the board under this new legislation will enable enforcement of compliance with the code. In cases of noncompliance, the board will be able to impose a sanction that is commensurate with the severity of the misconduct, ranging from a written caution or an order to undergo training or to work under supervision through to termination of registration. That is a very important aspect of the bill, because it gives the board the flexibility to administer a sanction appropriate to the offence that has occurred. As I said before, many tax agents are small business operators and it is not beyond the realms of possibility that they could fall foul of the law, perhaps inadvertently in some cases, and under this legislation the board will have the opportunity to impose a sanction on them that takes account of the circumstances that led to that breach of the code of conduct. I imagine that is one of the reasons that the industry has been appreciative of this change in the legislation and is supportive of it. They can see that this will work well, as opposed to a very heavy handed measure of immediate penalties that may be unwarranted, depending on the circumstances of the case.

Overall, I would like to conclude by saying that the bill demonstrates the government’s ongoing commitment to strengthening the integrity of the tax system and to providing greater protection to consumers and greater certainty to tax agents. It is another example of the modernisation of the legislative system that applies in this country, in particular in regard to tax. It is always a good thing to be able to stand here and endorse the government’s ongoing modernisation of very important legislation that affects so many Australian taxpayers and their families and, in particular, the businesses that operate in the tax agent services industry.