Zed Seselja (ACT, Liberal Party, Assistant Minister for Treasury and Finance) Share this | Hansard source

In terms of how businesses would become aware of new offences, I'm advised that the ATO has prepared guidance material. I understand that is ready to go, but, obviously, it can't go out until this legislation is passed through the Senate. It is ready to go. I'd encourage businesses, after the passage of this bill, to consult the ATO website. They can get an understanding of whether it would apply to them in the cleaning and courier industries and of the thresholds that would apply to them. I understand that will be available as soon as the legislation is passed. Obviously, if there is any need for assistance, the ATO will be able to assist.

In terms of the penalties, there is a rationale. We've had some discussion with Senator Anning about the strict liability nature of those offences, and I won't go over that ground, but they are very high penalties. The maximum is 5,000 penalty units. There are other offences that have lower penalties, including 1,000 penalty units for another offence. For those 5,000 penalty units, if you look at the wrong that we are seeking to counter and the potential for massive fraud upon the Commonwealth and therefore the taxpayer, I would say, and the government believes, that those very strong penalties are justified. When you are dealing with a $50 billion black economy and it's potentially, if we don't get hold of it, a growing black economy, there are some people who make an amazing amount of money from their activities in that black economy. The incentives against wrongdoing and the incentives against people to facilitate some of this wrongdoing—through, for instance, developing this type of software—need to be very, very strong in order to send the message. The disincentives need to be very, very strong. So, yes, 5,000 penalty units, at $210 a penalty unit, is a very significant penalty.

We do see other areas where there are very strong penalties. For instance, we know that under division 290 of the act the promoters of tax exploitation schemes attract a civil penalty of 5,000 penalty units as well. And we know that penalties in the range of 4½ thousand penalty units are imposed on breaches of directors' duties under the Corporations Act 2001. And the Criminal Code Act also imposes a 10-year maximum term of imprisonment for the offence of manufacturing devices for the creation of making forgeries. Again, that would be a very similar act. It is done for very, very similar purposes, so obviously when the government looks and does its consultation and goes through its processes and looks at other similar penalties, it obviously looks at similar offences and what types of penalties they have. We consider the deterrence effect that is needed, and when you are talking about the billions of dollars that are washing around in the black economy then it is very important that we have pretty substantial penalties for dealing with that wrongdoing.