The Assistant Treasurer and Minister for Competition and Consumer Policy, Chris Bowen MP, today released the Tax Design Review Panel's report Better Tax Design and Implementation.
The report makes 26 recommendations that propose significant changes to existing processes for tax design. The Government accepts in principle all the recommendations in the report.
“The recommendations put forward in this report when implemented will have the potential to significantly improve the development of tax measures and are consistent with the Government's commitments to give Australians a greater say in government decision-making,” Mr Bowen said.
“The Panel recommends more consultation at every stage of the tax design process including before the Government announces its decision to legislate and the establishment of a tri-partite team comprising Treasury, the ATO and the private sector to develop tax measures.
“By acting on the recommendations in this report, the government is delivering on a key election commitment to respond to community concern on the uncertainty created by the former government's failure to implement tax changes in a timely way.”
The Panel's recommendations will also mean greater transparency and include:
- posting on a public website a summary of the issues that arose in consultation, and
- publishing a forward work program of legislation.
The Panel also recommends that most measures should be prospective and introduced into Parliament within 12 months of their announcement with all retrospective measures introduced within six months of announcement.
This report also recognises that from time to time, there would be conflicts between the needs of consultation and drafting of measures for introduction, particularly in the case of integrity and Budget measures. In the case of budget tax measures, of course it would be the case that they would remain confidential until the budget announcement.
22 August 2008
Attachment
Tax Design Review Panel's report Better Tax Design and Implementation
Background
Key Recommendations
Consultation
The Panel recommends that the Government generally consult on tax changes at the initial policy design stage, prior to any Government announcement. The Panel recommends that the early consultation include engaging paid private sector advisers. In the case of substantive tax changes, a tri-partite team led by the Treasury should be established including tax officers and private sector experts which has carriage of the measure throughout the design phase.
Transparency
The Panel recommends the Government publish a rolling forward work program setting out the consultation it plans for announced tax measures and indicating the legislation it plans to introduce in the next sittings.
The Panel also recommends endorsement of the Tax Issues Entry System (‘TIES') previously recommended by the Board of Taxation under which the public could raise care and maintenance issues about the tax law. The Government will consider this recommendation.
Introduction times
The panel recommends that tax changes be introduced within 12 months of announcement and 6 months for retrospective measures.
Post-implementation monitoring and review
The Panel proposes that the tri-partite team it recommends for developing tax measures should also monitor the early implementation of the measure, identifying any legislative refinements needed and ensuring that the ATO has provided appropriate administrative products and guidance material.
The Panel
The Assistant Treasurer commissioned the Tax Design Review Panel on 8 February 2008 to examine:
- Options to reduce the delay between the announcement of proposed changes to tax laws and the introduction into Parliament of associated tax legislation;
- How the quality of the law can be improved through enhanced community consultation, particularly in the development of tax policy changes prior to the announcement of specific changes; and
- Methods to increase community input into the prioritisation of changes to tax laws.
The Panel was chaired by Neil Wilson of PricewaterhouseCoopers and included Duncan Baxter of Blake Dawson, John Morgan of the Victorian bar, the Office of Parliamentary Counsel, the Department of Prime Minister and Cabinet, the Australian Taxation Office, and Treasury.