For further information:
Gary Martin
National Tax Technical Director

• options to reduce the delay between the announcement of proposed changes to tax laws and the introduction into Parliament of associated tax legislation; and 
• how the quality of tax laws could be improved through enhanced community consultation, particularly in the development of tax policy changes prior to the announcement of the changes.

The Panel, which comprised public and private sector representatives, sought input from stakeholders and interested parties.

The Panel’s report has now been released by the Government. Entitled ‘Better Tax Design and Implementation’, the report makes 26 recommended changes to existing processes for tax design. The Government has accepted all of the recommendations in principle.

Key recommendations include:

• the Government should consult on tax changes at the initial policy design stage, prior to any Government announcement. This could include engaging private sector advisers. In the case of substantive tax changes, a tri-partite team led by Treasury and including ATO staff and private sector experts should be established to have carriage of the measure through the design stage; 
• the tri-partite team should monitor the early implementation of the measure, identifying any legislative refinements required and ensuring that the ATO has provided appropriate administrative products and guidance material; 
• the Government should publish a rolling forward work program setting out the consultation planned around announced tax measures and indicating the legislation planned for introduction in the next sittings; and 
• the Government should introduce tax changes within 12 months of announcement – 6 months in the case of retrospective measures.

The Government has asked Treasury to commence implementation of these recommendations.

BDO comment
The appointment of this Panel was an important initiative of the Government, as the delays between when the Government announces a change to tax law by press release and the change actually being legislated is an ongoing source of frustration for taxpayers. The delays also create substantial uncertainty for taxpayers and advisers, and impacts on business investment decision making.

While the previous Government did consult (either publicly or privately) on legislative changes, any improvements to the consultative process can only lead to more appropriate and commercially realistic tax laws being developed. However, the need for consultation must also be balanced with the need to get legislation implemented in a timely manner.

The Review Panel has also recommended that the Government announce an indicative work program for the implementation of any as yet unlegislated announcements of the previous Government which the present Government intends to proceed with.

The report also notes that in certain circumstances, such as Budget measures, the announcements would remain confidential and would not be subject to consultation prior to the announcement being made by the Government.