EMBARGO: 5.00pm
PRIME MINISTER
FOR MEDIA SUNDAY, 6 JUNE 1982
ELECTORATE TALK
Tax avoidance is an activity that costs every decent
member of the Australian community dearly. Avoidance
is, to be sure, a very slippery concept. But basically,
it amounts to arranging one's affairs with the sole
purpose minimising tax strictly, obeying the narrow
terms of t~ ax legislation, but not its spirit and intent
and ultimately it involves shifting the burden of
taxation on to the honest taxpayer.
Anyone who pays less than their fair share of tax does
so at the expense of every other member of the
community. For everyone benefits from
Government-provided services, and from the protection of
the law anid those who avoid paying their fair share of
the cost of those services are bludging on those who do.
But the financial cost of avoidance is not measured
simply by the extra tax the rest of us have to pay. Tax
revenue has to be devoted to devising, implementing and
administering anti-avoidance laws and to prosecuting
those caught cheating.
The cost also includes the resources, the time and the
effort not only of those who seek to avoid taxation but
also of their advisers their high-priced accountants
and lawyers who make a living off what they earn
by promoting scheme after scheme to rip off the rest of
the community.
Tax avoidance not only involves financial costs : it is
anti-social, and un-Australian. It is behaviour that
undermines the social fabric; it does so as surely or
more so as the irresponsible behaviour of that
minority of militant unionists who think and act as if
they can with impunity, trample on the rights of the
community, of which they are part. And the person who
indulges in avoidance by finding an artificial loophole
to slip cut of tax is, in our view, as guilty of a crime
against society as the person who evades tax by falsely
declarinql his income. / 2
2.
No government has done more to fight tax avoidance than
the present Government and Treasurer John Howard has
attacked tax avoidance more vigorously than any other
Treasurer in Australia's history. It is indeed because
of this Government's active campaign against tax
avoidance and the publicity which we have given to this
anti-social behaviour that the average Australian has
become so iware of it. Under this Government we have
acted on 26 occasions through 22 pieces of legislation
against 54 separate schemes. In addition to directly
attacking particular schemes of avoidance, we have
incorporated through Part IV A of the Income Tax
Assessment Act a general anti-avoidance provision. A
key feature of this legislation is that blatant,
artificial and contrived arrangements caught in its net
are struck down as from 27 May 1981 when the legislation
was passed. Whatever date in the future they are
discovered an additional tax equal to double the tax
sought to be avoided is automatically payable on any
scheme struck down by Part IV A.
We have also introduced the Crimes ( Taxation Offences)
Act 1980 which provides gaol terms of up to five years,
and fines of up to $ 50,000 for certain schemes which
seek to reduce or remove the capacity of a company or
trustee to pay tax.
And through changes in the * Crimes Interpretations Act we
have required the courts to have regard for the
intention of the law rather than for finer points of its
language. The Government is confident that together these measures
are working and will continue to work to greatly
diminish the incidence of tax avoidance.
But let there be no misunderstanding. If the measures
we have already taken don't go far enough to stop
particular unacceptable practices, the Government will
not hesitate to take further action. And this action
might wel" L resort to an extension of the use of limited
retrospectiv ity. o0000000