Before the Federal election, the Government consulted on draft legislation that will give the Commissioner of Taxation power to amend the tax law in certain circumstances. Generally the power would only be used to ensure the law is operating as intended and could not be used to the detriment of taxpayers. This is problematic for a number of reasons.
Firstly, the instances in which the Commissioner will be able to use the power are limited. The Commissioner can already interpret existing law to ensure the law is applied in accordance with its purpose, and when the existing law cannot be so interpreted, substantive amendments are required – the very type of amendments the Commissioner will be prevented from making.
Secondly, the steps involved in giving effect to any Commissioner-made laws are very similar to what the Minister for Revenue (formerly the Assistant Treasurer) would need to go through in order to make Regulations, and so there do not seem to be any efficiency gains. All of the same consultation protocols will be followed, and all of the same players will be involved. Indeed, the Commissioner will need to write to the Minister for Revenue before using the power, meaning that the only real difference under this new power is that the Commissioner will approve the legislative instrument rather than the Minister for Revenue.
Thirdly, who really thinks that unelected officials should have law making powers? In particular, who thinks the person empowered to collect revenue – which includes powers to access property – should have even more power than he already has? The rebuttal might be that the powers in this case are quite narrow and can only be exercised in favour of taxpayers, but that is beside the point. Power begets power – my guess is that 20 years from now the power will be broader because everyone will have realised that the power is useless.
Fourthly, why should the Minister for Revenue delegate part of her job to the Commissioner? She has been elected to Parliament and appointed to the Ministry – indeed she is the first Minister for Revenue to sit in Cabinet – to generate new or amending laws.
Fifthly, are there not more important tax policy issues than this for our public servants to spend their time resolving? The time spent developing this law – and even the most innocuous tax law takes considerable time and effort from the Treasury, ATO, Office of Parliamentary Counsel and Ministers’ offices – has been a waste of time and money! All they have done is add pages to the statute book.