FEDERAL ATTORNEY-General Phillip Ruddock spoke out last week against high income earners, including barristers, who use bankruptcy to avoid paying debts they can afford to pay.
“The Government remains committed to preventing high income earners, including barristers, from shielding their real assets from creditors by placing them in the name of their spouses or another party,” Ruddock said.
The A-G announced the release of a discussion paper on changes to bankruptcy laws that contains options and invites suggestions to strengthen the Bankruptcy Act to address the problem.
His comments come after a report in The Australian last week that quoted second commissioner of taxation Gregory Farr, who told a parliamentary inquiry that barristers were the worst tax avoiders compared with other professionals.
“Although we find some instances in each of those [other professions] where people have set out to avoid the payment of tax, there is not the same level of systemic issue that we have found with barristers,” Farr told the newspaper.
Amendments targeting this issue were released as an exposure draft in mid 2004, but were later withdrawn. Ruddock said the Government listened to concerns about the previous anti-avoidance proposals and now invites further comment from stakeholders on revision of the changes.