EMBARGO: 9.3Opm
4ISTRLIA
PRIME MINISTER
FOR MEDIA MONDAY, 27 SEPTEMBER 1982
EXTRACT FROM PRIME MINISTER'S ADDRESS TO
NSW CHAMBER OF MANUFACTURES
Retrospective tax legislation is by no means new. As far
back as 1936 the British Parliament passed tax legislation
which operated on tax avoidance schemes entered into before
1936, and when that legislation was appealed in the Court
of Appeal, one of the highest courts in Britain, the senior
judge of that court made two very significant comments.
" For years a battle of maneouvre has been waged
between the legislature and those who are minded
to throw the burden of taxation off their own shoulders
on to those of their fellow subjects
In that battle the legislature has often been worsted
by the skill, determination and resourcefulness of
its opponents of whom the present appellant has not.
been the least successful.
It would not shock us in the least to find that the
legislature has determined to put an end to the
struggle by imposing the severest of penalties. It
scarcely lies in the mouth of the taxpayer who plays
with fire to complain of burnt fingers."
He also said:.
" The fact that the section has to some extent
a retroactive effect again appears to us of no
importance when it is realised that the legislation
is a move in a long and fiercely contested battle
with individuals who well understand the rigour of
the contest."
one of Britain's most distinguished jurists, Viscount Simon, who
was the Lord Chancellor, the equivalent to the Chief Justice,
in an appeal by a taxpayer concerning the same legislation
and he upheld the legislation in that appeal -pointed to the
unfairness of tax avoidance practices:
" Judicial dicta may be cited which point out that,
however elaborate and artificial such methods * may be,
those who adopted them are Tentitled' to do so.* / 2
-2-
There is, of course, no doubt that they are within their legal
rights, but that is no reason why their ef forts, or those of
the professional gentlemen who assist them in the matter, should
be regarded as a commendable exercise of ingenuity or-as a
discharge of the duties of good citizenship.
on the contrary, one result of such methods, if they succeed,.
is, of course, to increase pro tanto the load of tax on the
shoulders of the great body of good citizens who do not
desire,' or do not know how, to adopt these manoeuvres."
Viscount Simon made a very significant point in that statement.*
I should like to conclude by making it perfectly clear that
the Government does not in any way regard the proposed
legislation as a precedent for future action.
Rather, it is legislation that has been called into
existence to meet the particular and special circumstances
which in the final analysis places a greater tax burden on
Australian taxpayers.
I understand that the British Goverrunent introduced a major
piece of retrospective tax legislation in 1978 designed to
eliminate once and for all aritificial1 tax avoidance schemes.