Suddenly, the traditional Australian symbol of justice – you are presumed innocent until proved guilty – has come to the fore in deciding the fate of the Australian Attorney-General Christian Porter.
There is no question that there are a lot of issues in Canberra and elsewhere in the way females have been treated on too many occasions.
But Scott Morrison and Porter took a stand on innocent until proved guilty, which I support. What I don’t think either the Prime Minister, Porter or other cabinet ministers fully understood was that the reverse principle “you are assumed to be guilty unless you prove yourself innocent” is the philosophy used by vast areas of the Australian Taxation Office.
In my view, Porter’s greatest mistake as Attorney-General was to be snowed by ATO and to allow an appeal to the High Court in a case that involved other issues but was designed to uphold the ATO view that tax collection starts with assumed guilt. More of that later.
Clearly, if we are to make a stand on this legal principle via the Attorney-General, we surely must apply that principle to the rest of the population in taxation.
The former Small Business Ombudsman Kate Carnell illustrated very clearly some of the dreadful “guilt” practices embraced by the ATO in the small and medium business sector. In particular ATO makes an assessment for tax and taxpayers are immediately liable and are often instantly bankrupted before they can appeal.
If they want to appeal interest and penalties start from day one in what can be a long process.
The methods of tax assessment are often very dubious to say the least. Carnell did not use the legal principle as a theme in her findings, but it bristled through the evidence she assembled.
But it was the gold case in Australia where people were declared guilty and then had to prove their innocence that the ATO guilt principle was applied in the most appalling way.
At the heart of the ATO actions was not the collection of money but rather the covering up of a horrendous ATO mistake.
In 2000 Australia embraced the UK system of handling GST taxing of gold transactions and it proved to be faulty. Every country that embraced that system quickly repaired it. Every country except Australia.
We did not repair the system until I had written five commentaries pointing out the situation in 2016. About $3bn was lost to the crooks.
The ATO decided that the guilty people were the gold refiners. They were declared guilty by the ATO without trial in the criminal courts.
Accordingly, as punishment, the ATO methodically decided to destroy every private sector gold refiner.
There was no criminal trial and the ATO passed the death sentence via enormous tax assessments and the freezing of GST money. Somehow the banks found out and refiners had to close and retrench their skilled staff.
At one stage, a number of ATO officers decided that they knew more about gold refining than anyone else in the world and devised refining systems to declare the gold refiners were not gold refiners at all.
When it came to the ATO internal appeal, the person who authored the declaration chaired the appeal and boldly declared how right the ATO was. The ATO always felt confident that, because they had virtually unlimited funds, they would win and the cover up would succeed.
We would never have discovered the horror of their actions except that one of the destroyed refiners had access to enough money to take the ATO to the courts. In desperation the AT0 spent $40m of tax payers money to prevent that refiner from proving innocence.
In the Administrative Appeals Tribunal, after a long delay, ATO case was upheld. But the full Federal court trashed the Administrative Appeals Tribunal judgment and showed just how desperate the ATO had become in trying to uphold the principle that a person is guilty and must prove their innocence.
The tax assessments were declared simply wrong and the gold refiner was declared innocent of any wrongdoing. and the refiner was awarded costs by the full Federal Court, which was fantastic.
The federal government, including Porter as Attorney-General, has allowed the ATO to take the case to the High Court on different grounds but the base case remains, so the High Court will be the ultimate judge of whether the principle that a person is guilty until they can prove innocence should be used in Australia by the ATO.
I know that well before the Porter case emerged a number of alarmed senior government people came to understand just how bad the elements in the ATO have become in declaring an entity or a person guilty and then demanding they prove their innocence.
Chris Merritt in The Australian earlier this week set out just how important this principle is.
In affairs such as the Porter case, nobody wins, but if it means that the ATO is forced to use the Australian justice system, then maybe it might be all worthwhile.
It will certainly add a great deal of certainty in running a small or medium enterprise, and if we make the tax act appeal changes properly, it will lift revenue.
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