Dunne Peter: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
Dunne Peter: Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill — Instruction to Committee In Committee 
[Volume:630;Page:2028] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I have a remarkable sense of déjà vu about this particular debate this evening because the original penalties provisions were brought in in legislation that I introduced 10 years ago when I was last Minister of Revenue. At that stage as the member quite rightly observes there was a very strong emphasis on voluntary compliance and on getting our system geared towards one whereby individuals and businesses would self-declare their liabilities and accept the consequences when they got it wrong. What I think has happened very clearly over the intervening decade is that the system by and large has worked well but there have been instances when good-faith errors—if there be such a thing—have occurred and people have ended up incurring significant penalties. In fact 20 percent is the penalty rate and that can accumulate into a massive sum very quickly. I think it was never intended originally that the law be interpreted in that way as broadly as perhaps it has been of late whereby people who are essentially making a judgment in good faith get it wrong then bear the penalty. 
Bearing in mind the agitation and the representations from a variety of people the amendments in Supplementary Order Paper 19 are designed to give the commissioner the flexibility to be taxpayer-friendly. When an unacceptable tax position has clearly occurred in an erroneous position the commissioner has the power to waive the penalties and impositions that might otherwise have occurred. That also means if I hear the member’s point correctly that in exercising that discretion it is not envisaged that the commissioner would exercise it negatively—in other words that he or she would look at a case and say: “Oh hang on you are not paying the 20 percent penalty at the moment. You ought to be.” There is not the intention that this provision be exercised in a way that is contrary to the interests of the taxpayer. It is to be taxpayer-friendly bearing in mind the range of circumstances. 
I have indicated that this is essentially an interim measure. I am keen to look at the wider range of application for penalties regime and see what changes we might want to make moving forward—bearing in mind that it is now 10 years old—and whether it is still working in exactly the way it was intended. I think that is a good principle to be establishing. Today’s proposals are essentially a short-term measure designed to deal with what is a very real problem. I think it is a constructive way through. I am simply giving notice that a wider review is to be undertaken around this point. Although I would not envisage that the outcome of that would in any way be contrary to the provisions I am proposing this evening I do see tonight’s move as but the first step. I think the member’s points are addressed by the discretion given to the commissioner here in all cases. I would not envisage and frankly would not expect to see a situation where that discretion was exercised against the interests of the taxpayer.