Blatant, artificial and contrived: Tax schemes of the 70s and 80s

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Contents (PDF, 69KB)
Introduction (PDF, 274KB)
Chapters 1-10 (PDF, 813KB)
Chapters 11-20 (PDF, 489KB)
Chapters 21-30 (PDF, 354KB)
Chapters 31-40 (PDF, 745KB)
Chapters 41-50 (PDF, 892KB)
Chapters 51-60 (PDF, 616KB)
Chapters 61-62 (PDF, 339KB)
Endnotes and index (PDF, 379KB)

Acknowledgments

In writing a history such as this, a first responsibility is to recognise the contribution of the many Tax Office people who, some 30 years ago, found themselves involved.

The schemes era began in the early 1970s. After a slow beginning schemes 'took off' in 1976. By 1982, promotion of the last of them had been stopped.

A team effort

Once the turnaround started, in 1977, many people within the ATO were involved in stopping the schemes. Some were engaged in detecting and analysing schemes, in putting them under challenge, in seeking to recover the tax. Others had roles in helping draw up the remedial laws that were enacted and in implementing those laws. The Office of Parliamentary Counsel carried the legislative drafting role, in a climate of judicial literalism. The massive work of defending the official rejection of schemes in cases before the courts and tribunals occupied the time and talents of others, with the work to extend for further years as a backlog of cases was processed.

All this was done in the name of the Commissioner and, naturally, some people played a bigger part than others. Until the middle of 1984, when the practice changed, all minutes to the Treasurer were signed personally by the Commissioner. He, and the officers concerned, had a hand in what went forward.

This work of the Tax Office thus having been a team effort I have, in writing this account on behalf of all who played a part, followed the general practice of not identifying who did what and have not singled out those whose contribution may have been the greater. Apart from use of the generic 'ATO' or 'Tax Office', the corporate 'we' has been used as the appropriate descriptor of the individuals concerned.

Sources

Documentary sources for the account are largely a number of contemporary documents found in archived ATO files and in publicly-available documents. Ministerial statements at the time, second reading speeches in the parliament, official explanatory memoranda on Bills and other comments in parliament are important publicly-accessible sources. The Commissioner's annual reports to parliament have been a further important reference point. So too the annual reports of the Commonwealth Director of Public Prosecutions.

Advisory and other minutes from the ATO to the Treasurer are a further source. A significant part of this advice has previously come into the public arena in a 'telephone book'¹ of documents tabled in the Senate on 22 September 1982. The appellation comes about not as a reference to names of people but as a reflection of the size of the group of documents it contains. These came to be tabled on the authority of the Treasurer as part of a government response to intense political questioning of his stewardship in responding to avoidance and evasion schemes.

Cabinet Submissions and Decisions have also been drawn on. As Cabinet papers going back 30 or more years are publicly available under Commonwealth archiving policy such documents are extensively referred to in this account. Relevant Cabinet papers within the 30-year closed period have been sighted but not referred to directly. In relation to events of 30 or more years ago, the account commonly refers to specific dates, not out of pedantry but because much of the political debate of the times had to do with timeliness issues.

As noted above, a variety of sources have been used in the preparation of this account. Specific references are provided in the text or in endnotes only where the documents relied on have already come into the public domain.

Contributors

The writing of the account has been greatly facilitated by a number of people who have kindly contributed their recollections of events and circumstances. They, of course, carry no responsibility for what is written in this account. They are:

Ken Allen, Mike Bannon, Ian Bartley, Keith Beddoe, Jan Brady, Jack Brandt, John Brodie, Peter Brooks, Rob Burr, Michael Canavan, Michael Carmody, Ray Conwell, Denis Cortese, John Crotty, Michael D'Ascenzo, Helen Duffy, Kevin Fitzpatrick, Brian Flynn, Kevin Goulder, Andrew Halkyard, Dave Hartnett, Bill Heaven, Lawrie Hill, Meredith Hill, Wayne Hodgins, Les Hutchinson, Jim Killaly, Des King, Pat McDonnell, Tony McInerney, Ron Mills, Michael Monaghan, Brian Nolan, Margaret Oates, Bill O'Reilly, Kevin Patchell, Warwick Perry, Ian Phillips, Charles Rennie, Barrie Russell, Colin Shawcross, Peter Simpson, Bob Stacey, John Thorburn, John Tiley, Rod Todman, Peter West, Terry Williamson, Peter Wynter, Eden Zanatta.

Preparation of the account could not have occurred without the cooperation and help of many others. Particular thanks are due to people in the Australian Public Service Commission; Australian Taxation Office - Document, Content and Records Management, Legal Services Branch, Library and Information Services; Melbourne Law School; National Archives of Australia; National Library of Australia; Office of Parliamentary Counsel; Prime Minister and Cabinet; Sydney Law School; Treasury.

Other ATO people have contributed much in final editing, design and publication services.

The account is very much about what happened in the period that John Howard was Treasurer. Accordingly, he has been consulted and has seen the manuscript of the account. He has confirmed some recollections specifically attributed to him.

Importantly, thanks and appreciation are due to Vicki Woolley, who has assisted throughout the two years of research for and writing of this account. Vicki established and productively pursued contacts with people and agencies, organised the retrieval of files and papers, ferreted out difficult-to-find material, typed up from rough manuscript successive drafts of the account and generally planned for its publication. Vicki has been a valuable sounding board and contributor on content and presentation issues. Without her cheerful assistance, the account would have been that much poorer.