http://www.abc.net.au/am/content/2003/s890373.htm
Sorry $53 million
- Saturday, 28 June , 2003 08:08:00
Reporter: Ben Knight
EDMOND ROY: Tax experts say they're stunned by a $53-million fine handed down in the Victorian Supreme Court yesterday.
The fine, the largest in Australian history, was awarded against two Victorian companies and their executives, for mixing diesel fuel with cheaper products to avoid paying excise duty.
The father and son behind the companies say they've done nothing wrong, but won't be appealing the decision.
Motoring groups say it sends a strong message to fuel distributors, but others warn that it puts the whole cash economy on notice.
Ben Knight reports.
BEN KNIGHT: The sheer size of the fine has taken even the experts by surprise.
JOHN GLOVER: I was aghast, simply aghast. It's a huge figure.
BEN KNIGHT: Associate Professor John Glover, from Monash University's Faculty of Law.
JOHN GLOVER: Well, normally fines have to bear a proportion to the scale of the offence. Now, I understand that the offence was limited to an evasion of in the order of $6-million worth of duty, and to impose a fine of $53-million in respect of that to me smacks of disproportion.
BEN KNIGHT: No doubt Ray and Kevin Sidebottom would agree. It was their company, Australian Petroleum Suppliers, the court found had systematically added solvents, kerosene, and heating oil to diesel fuel.
Yesterday, Ray Sidebottom was maintaining he'd done nothing wrong.
RAY SIDEBOTTOM: We don't concede to the charges, we just wanted to finish the case.
BEN KNIGHT: Mr Sidebottom says it was a commercial decision to agree to pay the fine, and claims the Tax Office was seeking total penalties of $500-million. His company is now in voluntary administration. Another of his companies, Goulburn Valley Liquid Tankers, may be about to go the same way.
The Sidebottoms are based in the northern Victorian town of Numurkah, and are among the biggest employers in the region. And Tony Greco, from Taxpayers Australia, believes that may be one of the reasons the Tax Office decided to pursue a civil, rather than a criminal case against them.
TONY GRECO: Rather than closing down the businesses which employ people in regional Australia, maybe they can send a clear message to the public, as well as recouping unpaid excise and penalties and still possibly having these businesses continue in the future.
BEN KNIGHT: The Sidebottoms won't be appealing against the figure; therefore, it stands at $53.2-million. So does that figure now set a precedent?
John Glover.
JOHN GLOVER: No, it doesn’t. It does the opposite of that because if it doesn't go any further it means that it doesn't have the standing of a higher court's imprimatur on the fine.
BEN KNIGHT: So this doesn’t necessarily set a benchmark?
JOHN GLOVER: Oh, well, to a degree it does because it's a decision by a court of record that 53 is an appropriate fine for an offence which sounds in the order of six.
BEN KNIGHT: Truck drivers who spoke to AM say adulterated fuel is still a problem, and does cause damage to trucks, particularly those of owner drivers, who seek out cheap diesel.
But claims against the suppliers are rare, and are unlikely to be made against the Sidebottoms.
But David Cumming from the RACV says the large fine provides the strong deterrent that was needed.
DAVID CUMMING: It's absolutely huge and it really gives a very strong message to not only those that make the product but those that sometimes may wish to blend on the forecourt of a service station that if you do this sort of thing and you get caught you will be hit very heavily because after all, the last thing you want is doctored fuel out there in the workplace, particularly in the area of diesel, where some blends can actually lower the flashpoint of that diesel and make it quite dangerous. So we've got to stamp this out and we've got to make sure people are aware that it's not good to doctor with our fuel, we want to run our cars on good quality product and quite frankly this sounds a very good signal to any in the industry who may wish to go on some sort of scam just to make a few dollars at the expense of the motorist.
BEN KNIGHT: This is a big win for the Australian Taxation Office, who have been gearing up for a new series of audits on indirect taxes and the cash economy.
And Tony Greco says it's not just fuel retailers who should take notice of this result.
TONY GRECO: I think the general community that are blatantly avoiding taxes are the ones that should be put on notice. I mean, whether it's excise or GST or any other of the federal taxes, I think there are more reasons to be afraid of the Tax Office, given the sophistication that is on the increase from the Tax Office they've got greater ability to uncover these types of situations.
EDMOND ROY: Tony Greco from Taxpayers Australia, ending Ben Knight's report.
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