Chapter 13 - Financial legislation
Retrospectivity of tax legislation
The Customs Act
1901 (ss 226 and 273EA) and the Excise Act 1901 (ss 114 and 160B)
contain provisions which allow the collection of customs duties and excise
duties from the time of the announcement of proposals by the government, within
a period of 12 months before the passage of legislation to validate the duties.
The purpose of these provisions is to ensure that windfall profits may not be
made between the time of announcement of duties and the enactment of
legislation to levy the duties.
The Senate has not declined to pass a bill validating increases in
duties, and there has long been speculation about the remedial action which
might be taken in such a case. In June 2000 the Senate passed a resolution
expressing opposition to rates of excise contained in an excise tariff proposal
tabled in the House of Representatives (29/6/2000, J.2980). A compromise by the
government avoided rejection by the Senate of the measure.
On 12 August 2003 the Senate deferred
consideration of two customs and excise tariff bills to give effect to an
ethanol subsidy scheme until the government produced documents required by
various Senate orders relating to the scheme. The documents were not initially
produced and the bills were not passed until documents were subsequently
tabled. (12/8/2003, J.2089-90; 1/4/2004,
J.3324-5)
On 17 June 2008
the Senate passed a resolution declaring its opposition to excise increases on
certain alcoholic beverages in the absence of a more comprehensive plan to deal
with alcohol abuse, foreshadowing a possible rejection of excise increases
already being collected (17/6/2008, J.498). (See Supplement)
An amendment made by the Senate to the Taxation Laws Amendment (Budget
Measures) Bill 1995 required public notification of any intention of the
government to introduce changes to the sales tax law then in effect (29/6/1995,
J.3591-3).
In relation to other taxes, the Senate in 1988 passed a declaratory
resolution, as part of an amendment to the motion for the second reading of a
bill, to the effect that if more that six months elapses between a government
announcement of a taxation proposal and the introduction or publication of a
bill, the Senate will amend the bill to reduce the period of retrospectivity to
the time since the introduction or publication of the bill (8/11/1988, J.1104;
precedents for removal of retrospective provisions: 22/5/1990, J.121;
31/5/1990, J.195).
The Scrutiny of
Bills Committee draws the attention of the Senate to retrospective legislation,
particularly tax legislation, and has been critical of the practice of
backdating tax legislation to the date of a ministerial announcement (see
Report on the Operations of the Committee 1990-1993, October 1993, PP 208/1993,
pp 16-20).
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