Imagine that you do something today which is perfectly legal. For instance, you might be a company law expert and you find a really good and perfectly legal way to structure your portfolio of businesses so that their tax liability is minimised, or with some luck, completely eliminated. You have read and understood all the laws and you know 100% that what are doing is completely within the law.
Then a few years later, the government finds out that you have organised yourself perfectly legally to minimise or eliminate your tax liability and thus your companies have paid little or no tax. The government takes great umbrage at the fact that you have found a legal way to do this, so it decides to close the loophole. Fair enough.
But then the government does something else that is so patently unfair that it beggars belief. It makes the law that closes that loophole retrospective to before the date that you structured your companies to minimise or eliminate their tax liability. The government then comes along and charges you with tax avoidance and prosecutes you to within an inch of your life. It sounds crazy, but this is what the Australian government has done.
The federal government has increasingly resorted to retrospective laws, as was the example with the passing of the Tax Laws Amendment (Cross-Border Transfer Pricing) Act No 1 2012, which was retrospective to 2004. The government sought to justify this on the claim that it reflected Parliament’s understanding since 2004 of what the law was. This was so, notwithstanding that it could not point to anything any parliamentarian said showing that it was their understanding. Furthermore, the federal government in the Tax Laws Amendment (2012 Measures No 2) Act has imposed retrospective personal liability on company directors.
In 2010, the Supreme Court of South Australia, exercising federal jurisdiction, ruled that contrary to the federal government's longstanding belief, failure to inform Centrelink of a relevant change in one's circumstances was not in itself an offence. That decision was upheld on appeal to the High Court in October 2011. But before the High Court handed down its decision, the federal parliament, obviously fearful of the number of convictions that might be overturned, the number of baseless prosecutions that might be terminated and the size of the compensation bill, passed an amendment to the Social Security (Administration) Act in order to validate the convictions by retrospectively creating the desired offence.
In other words, the government makes criminals out of the innocent by using retrospective legislation. What was legal when people did it suddenly became illegal without those people knowing it until the government and its stooges come along and charge people for crimes that did not exist at the time when people committed those legal acts.
People are not clairvoyant. People cannot possibly know that when they do something that is perfectly legal, that some time in the future, the government will make criminals of them with retrospective legislation. Sure, schemes to minimise or eliminate taxation liability may be considered to be immoral, but so what? The late media magnate Kerry Packer once said, "I am not evading tax in any way, shape or form. Now of course I am minimising my tax and if anybody in this country doesn't minimise their tax, they want their heads read".
If something like minimising tax is legal at the time and the government does not like it, the government can pass laws to stop this. However, it is obviously blatantly unfair to make criminals out of people who do things that are legal at the time. Therefore without any exception whatsoever, all retrospective legislation must be outlawed and no government should ever be allowed to pass such legislation. In fact this should become an amendment to the Australian Constitution to protect the people from such idiotic, unreasonable and and iniquitous laws.