A Report to the Treasurer

 

 

Foreword

© Commonwealth of Australia 2007

ISBN 0 642 74391 6

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Foreword

The Board of Taxation has an ongoing role under its Charter to provide advice to the Treasurer on community consultation arrangements in relation to taxation matters. In fulfilling that role, in March 2002 the Board provided the Treasurer with a range of recommendations to improve the effectiveness of taxation consultation arrangements in its report on Government Consultation with the Community on the Development of Taxation Legislation. The Government accepted in principle all of the Board’s recommendations, and taxation consultation arrangements have improved significantly since that time.

Given the key role of consultation in improving the quality of tax legislation and the operation of the tax system more generally, it is important to strive for continuous improvement in the arrangements. The Board therefore welcomed the opportunity for a further review with Treasury of taxation consultation arrangements that arose from the Government’s acceptance in December 2004 of recommendation 7.1 of the Review of Aspects of Income Tax Self Assessment. That recommendation tasked the Board, in conjunction with Treasury, with reviewing international consultation processes with a view to identifying any improvements to the Australian tax consultation system, especially in respect of non-controversial minor policy or technical amendments, and reporting to government.

The Board and Treasury established a joint Working Party, chaired by Mr Keith James from the Board, in 2005 to conduct the review. The Working Party’s intention in undertaking the review was to provide the Government with a set of recommendations on which there is already broad agreement, within and outside Government, in the tax consultation system. The Working Party has worked very closely with all participants and substantial progress has been made in gaining acceptance of the recommendations and, in some cases, in implementing responses to the recommendations.

The Working Party drew on two key sources of information in conducting the review: international approaches to tax consultation arrangements and the views of external stakeholders within the Australian system.

The Working Party considered information on tax consultation practices from Canada, France, Germany, Ireland, Korea, the Netherlands, Norway, Sweden, the United Kingdom, New Zealand and the United States. Much of this information was obtained through responses to a questionnaire along with some follow-up in relation to particular issues. In addition, representatives of the Working Party visited New Zealand as it was identified as a best practice model on several occasions, and one representative met with officials in the United Kingdom.

In addition, the Working Party met with a wide range of stakeholders in the Australian system to understand better the current tax consultation processes and to gather information on whether international practice might be relevant to Australia. In particular, the Working Party met with peak industry groups, tax expert groups, regulatory bodies, officials from the Treasury and the Australian Taxation Office and state government treasury and revenue departments.

The Working Party was assisted in the information gathering process by consultation, facilitation and executive assistant consultancy services provided by Mr Don McKenzie and Mr David Ragg.

Using this information, the Working Party developed a model for sustainable community consultation on which the recommendations in the report are based.

The Working Party would like to thank all of those who so readily contributed information and time to assist in conducting the review. In particular, the Working Party would like to thank the range of stakeholders within the New Zealand tax consultation system who provided a frank and open account of the background to and operation of their system. The Working Party was encouraged by the strong commitment of all participants in tax consultation processes to work together to improve the current arrangements for the benefit of the tax system as a whole.

From the Board’s perspective, we would like to express our appreciation to the Treasury members on the Working Party. The recommendations in the report reflect an agreed position between the Board and Treasury and the Board would like to thank the Treasury officials for their cooperative approach to reaching those outcomes.

On behalf of the Working Party, it is with great pleasure that I submit this report to the Treasurer. The Working Party believes, if implemented, the recommendations in the report will further improve Australia’s tax consultation arrangements, resulting in better tax system outcomes.

Richard F E Warburton AO
Chairman