Helen Coonan (NSW, Liberal Party, Shadow Minister for Finance, Competition Policy and Deregulation) Share this | Link to 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.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Tax Agent Services Bill 2008. I was pleased to be a member of the Senate Standing Committee on Economics, which conducted an inquiry into this legislation. It was a terrific experience to hear from the many organisations eager to share their views on how best to give greater integrity to our tax system. Ironically, this bill had its genesis under the previous Labor government way back in 1992. At that time a working party was put together to review professional standards and regulatory arrangements for tax agents. The Standing Committee on Economics was informed by Treasury that, since 1943, tax agents have been subject to regulation under the Income Tax Assessment Act 1936. So, to say that a review and revamp of this legislation is a long time coming is something of an understatement.

I do not think the Howard government showed much interest in making the tax system fairer. Indeed, the previous government sat on their hands for a long time in getting this new framework together. Discussions were, in the words of the National Institute of Accountants, ‘protracted’. Fairness is the centre of this Rudd government bill. We have sought to get it before parliament in as timely a manner as possible. This government is active in making sure that everyone knows what is expected of them and committed to maximising transparency and accountability in the tax system, securing the quality of the service people receive.

As we all know from experience, tax time can be quite stressful and tax agents are critical to the effective operation of the tax system. We want to be confident in the work undertaken on our behalf. Therefore, the reworking of the legislation governing tax agent services aims to improve and modernise the framework that regulates the work of these critical participants in the administration of our tax system. Tax agents work very hard under outmoded regulations. So, not surprisingly, there is a significant level of eagerness on the part of the tax agents to see this bill become law. As Ms Vicky Stylianou of the National Institute of Accountants told the Standing Committee on Economics inquiry into this bill:

Our intention is to see the new regime instituted and established as soon as possible.

The Taxation Institute of Australia wrote of the importance of clear parameters for professionals and protection for consumers. They too want this bill now. The Institute of Chartered Accountants, representing nearly 48,000 individuals, also called for the implementation of this legislation. The institute remains:

…strongly committed to the earliest possible introduction of a national regime for the regulation of tax agents and BAS agents.

But this bill is also part of a broader reform project. It is yet another example of the Rudd government’s commitment to improving the integrity of our tax system. It modernises the way in which tax agents are regulated to ensure that this fits with a modern and coherent tax environment. In keeping with current community expectations, this bill will provide robust protection to consumers. The government recognises that reasonable safeguards for consumers are also in the interests of tax agents. Tax agents too will benefit from the greater clarity this bill will provide about their role and responsibility—so that they can have confidence that they are providing services in a manner which conforms with the regulatory environment for their industry. It was with some concern that I listened to the evidence where witnesses spoke with some honesty about work being undertaken by some unregistered agents, where people should not have an expectation or confidence that their returns have been calculated correctly. There is really no recourse for people in the current environment, other than their individual responsibility. As the Institute of Chartered Accountants put it:

We are keen to ensure that a robust regulatory regime is established and implemented efficiently so as to place the tax profession in a healthy and strong position for generations to come.

I want to turn briefly to some of the specific reforms in this bill which will help to modernise our tax system and return integrity and fairness to it. Firstly, the bill establishes a national tax practitioners board, which will make sure that we have a national and consistent approach to regulation and will replace the confusing and inconsistent system of state based boards. As the Commonwealth Ombudsman, responsible for taxation complaints, Professor John McMillan, pointed out in a submission to the inquiry, the various state based tax agents boards:

… adopt different administrative practices, potentially resulting in inconsistency at a national level—

hardly a fair thing for people around the country who are putting in their tax returns—

This can harbour a perception of inequality, inconsistency and arbitrariness within taxpaying and professional communities. That perception can undermine community confidence in the tax system and its administration and regulation.

On this basis, it is expected that the implementation of a national Board will provide for more consistent decision-making, more co-ordinated practices and more effective remedial action where necessary or appropriate.

Indeed, that is the very basis of the Rudd government’s efforts to provide integrity for our tax system. It is about providing confidence for all in our tax system. The state based Tax Agents’ Boards recognised the need for a national approach. In their submission to the economics committee inquiry they said they were:

… firmly of the view that the establishment of the new national Tax Practitioners Board as soon as possible will be of benefit to the tax system and its stakeholders.

The Boards’ support is based upon an informed awareness of the limitations of the current legislation and its impact upon the taxpayer public and the integrity of the tax system as a whole.

The Boards are reassured by the proposed post-implementation review of the legislation after three years of operation as set out in paragraphs 5.33 and 6.71 of the Explanatory Memorandum and regard this as essential. It will provide the opportunity to remedy any deficiencies which have become apparent with the benefit of having had the new system in operation for that period.

It is great to see that the new legislation has this kind of flexibility. The submission went on:

As the Boards see it, the principal benefits of the legislation can be summarised as follows:

i.

The new Board will be national.

ii.

The new Board will have greater disciplinary powers.

iii.

The new Board will regulate BAS preparers for the first time.

iv.

The New Board will have jurisdiction over unregistered preparers.

v.

The new Board will have the opportunity to grant conditional registration.

vi.

The new Board will be independent of the ATO.

The new Tax Agents Board will conduct a registration system for tax agents and agents administering business activity statements. It will have a role in disciplining tax agents and business activity statement agents who do the wrong thing. As the board pointed out, it will also have an important role in dealing with unregistered entities that are holding themselves out as registered. These are important things that are inadequately provided for within our current system. This is something that consumers who put in their tax returns and use these agents really need. Registration is an important feature, because we have witnessed significant growth in the use of BAS related services since the GST was introduced by the previous government in 2000. There has been an explosion of BAS related accounting services. Indeed, there has not been a great deal of regulation, attention or professional development for people who are putting in statements. In the view of the Commonwealth Ombudsman:

The inclusion of BAS service providers … addresses a major short-fall in the current system. The preparation of BASs is an important aspect of the current taxation system and BAS service providers play a key role. In the last year, around 9% of the complaints we received about the lodgement and processing of tax forms were about BASs. The inclusion of BAS service providers in the new regulatory scheme ensures relevant regulation of their conduct and should facilitate improvements in their work standards.

This system of registration will also be most helpful for the users of agent services. They are going to be able to easily determine who is and who is not registered as a professional in relation to the provision of tax agent services. Currently consumers do not have enough clarity about this. The professional registration role of the Tax Agents Board will provide the industry with a streamlined and, for the first time, consistent approach. One difficulty with having a number of different state based boards is a measure of inefficiency in the registration process. An example of this previous inefficiency was cited in the Commonwealth Ombudsman’s submission to the economics committee inquiry. This is Mr K’s story, as told by the Ombudsman:

Mr K complained to us about what he considered was an unacceptable delay by a state Tax Agents’ Board (the Board). Mr K lodged his application for registration with the Board in September 2007 and he was advised that a decision would by made by the Board at its November meeting. By December 2007 his application was still not decided and he was advised by the Board that a decision would not be made until February 2008, a delay of six months.

When we investigated Mr K’s complaint we found that due to an administrative error, Mr K’s application was not considered at the Board’s November or December meetings and, because the Board did not meet in January, he had to wait until the next meeting of the Board in February 2008. His application for registration as tax agent was approved in February 2008.

The new system will clean up the administration and inefficiencies like that. Importantly for the industry, the Administrative Appeals Tribunal will be able to review most of the board’s decisions. That is a very important development. It is really important that they have an appeals mechanism open to them, which is only right when the administration of law affects people’s working lives and livelihoods. If you are knocked back by the board, you need a transparent place to go to appeal such a decision.

As senators will be aware, systems of registration already work well for a range of other professions, and a system of registration will work equally well for tax agents. This system of registration will be complemented by a code of professional conduct. The new and legislated code of professional conduct will provide a professional and regulatory framework for tax and BAS agents. 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. This code will make explicit the standards expected of tax agents and BAS agents and will clearly define their roles and responsibilities. The code of professional conduct will make it clear for agents what their areas of professional responsibilities are. It will also provide clarity and certainty for them, particularly in relation to the way in which they conduct their operations and the manner in which they provide professional services. The code of professional conduct will be of great assistance to tax agents to maintain the integrity of the services that they provide and will, in turn, return integrity to Australia’s taxation system. Importantly, as identified by the Commonwealth Ombudsman, the code should lead to a reduction in complaints about tax practitioners. Once again, we know that codes of conduct have worked well for other professions, and it will work well for tax and BAS agents.

Like other professions, there are, on occasions, some in the industry who might do the wrong thing. This happens, and we need to be realistic about that. We also have to make sure that everyone understands their rights and responsibilities. This bill will make it clear what is expected of taxation practitioners. In this context, one of the issues highlighted before the economics committee was the need for better education of tax agent professionals. The majority of people get their work done by a wide variety of practitioners. There is a great deal of inconsistency in the education standards and the certificate level qualifications of practitioners in this area. The lack of transparency in the act for regulating people who do this kind of work has flowed right through to the education system. A stronger framework and code of conduct of professional standards can now begin to be reflected in the education standards. That point was made very strongly by a number of submitters before the economics committee.

For those people who do the wrong thing there will be penalties, as there should be. The new Tax Practitioners Board will have a wider range of disciplinary sanctions, and it will put these to use in the regulation of tax agent services. I am sure that this will be of comfort to consumers because it is the kind of thing that will raise the standard. People who are putting in these kinds of returns will know that if they do not do it properly then there will be a penalty. Many of the industry associations predicted that there would be a number of people who would drop out of the industry because they are very self-aware of the fact that they do not meet those standards. New injunctions and civil penalties will replace some criminal penalties. They will provide relevant and appropriate penalties for those people who do the wrong thing. They will also provide active disincentives for those who might consider doing the wrong thing.

Overall, the bill provides for a coherent and comprehensive regulation of tax agent services. This will help support fairness and integrity within the taxation system for taxation professionals and taxpayers alike. I commend the bill to the Senate.

Anne McEwen (SA, Australian Labor Party) Share this | Link to 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.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Firstly, I would like to thank all senators who have contributed to this debate, particularly Senator McEwen for her contribution. The Tax Agent Services Bill 2008 aims to improve the regulatory environment for the provision of tax agent services of the current regime, which was introduced in 1943. Think about that: we have a regime here dating from 1943—it is a little out of step with the contemporary tax and commercial environment! The bill will ensure that tax agents’ services are provided in accordance with appropriate professional and ethical standards.

The bill will improve the regulatory environment through the establishment of a national Tax Practitioners Board, which will provide consistency in the registration and regulation of tax agents and other intermediaries in the tax field. You just have to look at the papers to see the sort of tax practices being recommended by many so-called high-profile tax agents—the Bermuda trusts that they encourage people towards. We are having to have an entire enforcement regime dealing with the activities of schemes promoted by some tax agents, so this is a particularly relevant bill at the moment.

The bill requires that entities providing business activity statement services for a fee must register. It ensures a level playing field and realigns the scope of regulation with the expansion of the tax base and other changes to the tax system over recent decades.

The legislative code of professional conduct established under the bill provides certainty to both agents and taxpayers. Agents will be given clarity about the standard of conduct expected of them and taxpayers will have a benchmark against which they can evaluate the services that they receive. It is very important that, when you are looking to employ a tax agent, you know that they are registered and you know that they understand their professional and ethical standards. We do not want to see the proliferation that we have in recent times, where some fly-by-nighters spend their time trying to actively promote illegal evasion. That is not to deny the right of people to access the deductions that they are entitled to. What we are talking about here is people who go out of their way to set up scams and false activities that evade tax. That is why this is such an important bill.

The introduction of a range of constructive and educative administrative sanctions allows the new board flexibility to respond appropriately to breaches of the code. The application of civil penalties instead of the existing criminal penalties for certain specified misconduct by registered agents and unregistered entities will provide an effective deterrent against engaging in prohibited conduct. That is one of the really important steps forward that we are seeing through this legislation. The criminal penalties have not necessarily been able to be enforced as well as I am sure the original legislators had hoped. The capacity to impose civil penalties for misconduct by registered agents and, importantly, unregistered entities should begin to assist, promote and protect the integrity of the tax base. The vast majority of taxpayers are interested in protecting the integrity of the tax base.

The Tax Agent Services Bill 2008 is the culmination of an extensive consultation process that commenced in 1992. I see Senator Coonan here in the chamber. It has been a long time since 1992, Senator Coonan.

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

And feeling every minute of it, Senator Conroy!

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I am sure you were also working on this bill! A working party was first established back in 1992 to review the regulatory arrangements and professional standards for tax agents. Since that time a broad range of stakeholders have been involved in developing the new regulatory regime in the bill—in fact, I am sure that there is almost nobody who was not consulted, given the bill has been discussed since 1992. This consultation has included practitioners, professional associations, the state tax agent boards and taxpayers. The extent of the engagement of the industry and the broader community is evidenced by the interest generated in the latest consultation—that is, the Senate Standing Committee on Economics inquiry into the bill. Clearly, stakeholder groups are very keen for the bill to be passed and for it to commence as soon as possible. I am sure that is recognition of what I was saying before—that both agents and taxpayers have an incentive to protect the integrity of the tax base, because when some people behave badly and evade their tax, what that ultimately does is increase the pressure on those taxpayers who have behaved ethically and honestly. The ongoing interest in this bill, as demonstrated by the submissions and by some of the passions that have been stirred up, allows us to see that the overwhelming majority of Australians and practitioners want an ethical and professional approach to taxation issues.

The recommendation of the Senate Standing Committee on Economics was that the Senate pass the bill. The committee noted that many of the matters of detail raised in submissions during the inquiry can and ought to be addressed through guidelines, which may be issued by the new board under the bill. The opposition has also separately made known its support for the bill. I would also like to note that the government continues to recognise the value of the views expressed by the members of the industry and the broader community, through consultation, to this new regulatory regime. Indeed, consistent with the government’s approach to consultation, the government last month released the associated transitional provisions and consequential amendments bill for six weeks of public consultation.

As you can see from that six-week consultation period, this is a government that is committed to consulting the sector. It is committed to getting the best possible advice, the best possible evidence, to ensure that it gets this right. This is not a government that is interested in trying to ram bills through. It is a government that has consulted through, firstly, the Senate inquiry, and now a public consultation process. I am sure senators in the chamber today would welcome the fact that on this sensitive but important matter the government is willing to sit down and continue what has been quite lengthy process. As I said, the process has been going since 1992—but we are now right at the final stage.

I look forward to examining the guidelines which the new board will issue. They are going to be a critical step towards ensuring that the shonky practices of some agents that have gone on are stamped out. So I welcome the support of industry for this bill and I welcome the support for the consultation and for the guidelines that are going to be issued—and I am sure that there will be healthy debate, robust debate, on what these guidelines are. To take on board the desire to publish guidelines which will set out the professional standards for tax agents is going to be a challenge, but I am sure the stakeholders involved in this will take up the opportunity to identify what are breaches of the code. They are going to be specifying misconduct. This is not a challenge that should be underestimated. Professional associations take their jobs very seriously and they are going to take this process very seriously. It is important that the parliament have confidence that the professional associations take ethical misconduct seriously, and that is why we will be watching the debate and watching when these guidelines are issued. We want to give support to the new board so that they know that the weight of parliament is behind them, that we are in a situation where they can act with the support of, as it appears, the whole parliament and that all of the differing groups—the government, the opposition and the minor parties—are committed to getting the outcome that this bill deserves.

So the Tax Agent Services Bill 2008 provides significant improvements to the existing regulatory regime. For the agents it provides appropriate, flexible regulation of the provision of taxation services and will improve consistency and registration. For taxpayers, the consumers of tax agent services, it will enhance the protection of those taxpayers, thereby reducing their uncertainty and the risk they face. For the broader system, the bill will strengthen the integrity of the tax system and the tax industry. With the economic pressure that we are currently facing, we need to be able to have confidence that no-one is paying more tax than they need to, and we can ensure that by putting pressure on and driving out of the industry the fly-by-nighters—those who have perhaps less than ethical standards and who promote schemes which are clearly about tax evasion. As I said earlier, everyone else pays when a few smart alecs get to rort the system. So having an industry sector that is committed to driving the shonks out of that system is very, very welcome.

We want to be able to say that these guidelines—this new regulation, this new flexibility—will protect not just the integrity of the tax base but also taxpayers and reputable, ethical agents. That is what is at the heart of this legislation. Senator Coonan has worked on it, many predecessors appear to have worked on it, and it is timely that in a time of economic difficulties we are striving to ensure that the tax burden continues to be reduced where appropriate. That is why it is important that the Henry review continue its work—so that we are in a position where, when we make changes to the tax system, we do not have tax agents out there with the sole intention of creating evasion, because that would undermine the integrity of the tax system. So already we are going through the process of the Henry tax review, which is designed to protect and enhance the integrity of the tax system, and at the same time we have this complementary reform, which has the entire support of the industry and is designed to ensure that the good work being done by the Henry tax review is not undermined from within. That is an important thing, and the industry deserve congratulations on it.

So, Madam Acting Deputy President Troeth—I know you will be barracking for Collingwood on Friday night because you are that sort of fair-minded person and you can share around the premiership cups!—the government is committed to implementing these regulatory reforms to the provision of tax agent services, and I commend the bill to the Senate.

Question agreed to.

Bill read a second time.