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The Government proposes to extend the Commissioner’s administrative flexibility under the care and management provision so they can deal with:

  • minor legislative anomalies
  • transitory legislative anomalies
  • cases when the relevant legislation does not adequately deal with a particular situation because a statutory rule is difficult to formulate
  • a long-standing established practice of both the Commissioner and taxpayers
  • cases of unfairness at the margins.

The application of the care and management decision would be optional for taxpayers, as it would not rewrite the current law.  This would mean that taxpayers could apply the Commissioner’s decision made under the discretion if they wish.

Given the risk to the rule of law, the Government considers that some specific safeguards should apply, including the following:

  • the discretion would only be exercised consistently with the clear policy intent
  • the exercise of the discretion would be guided by the current obligations on the Commissioner in Section 6A
  • any exercise of the discretion would be time-limited and could not exceed three years
  • the Commissioner would be required to undertake consultation before exercising the discretion
  • the Commissioner would be required to publish any exercise of the discretion
  • the person authorised to exercise the discretion would have an appropriate level of expertise.



A drafting error exists in a specific provision which prevents taxpayers from using different calculation methods for determining their foreign investment fund (FIF) income when they have more than one investment in the same FIF.  This unintended restriction is contrary to the policy intent, which was to allow taxpayers to use different methods in certain circumstances.  The policy intent and desired outcome are clear.  A bill before Parliament provides for the drafting error to be remedied retrospectively.

The Commissioner would be able to deal pragmatically with the transitory legislative anomaly by allowing taxpayers to use different calculation methods, while the legislation was being enacted.

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