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Standing Committee on Tax and Revenue - 21/10/2015 - Tax expenditures statement

CLYDE, Mr Malcolm, Finance and Research Director, SMSF Owners' Alliance

FAIRWEATHER, Mr Duncan, Executive Director, SMSF Owners' Alliance


CHAIR: I would now like to welcome representatives from the SMSF Owners' Alliance. Although the committee does not require you to give evidence under oath, I advise you that these hearings are formal proceedings of the parliament and warrant the same respect as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. Do you wish to make an opening statement?

Mr Fairweather : We do. Thank you, Mr Chairman, for the opportunity to appear before the committee and to speak to the submission that we lodged earlier. The SMSF Owners' Alliance is a not-for-profit organisation. It was established three years ago to speak up for the interests of the owners of self-managed super funds. We deliberately used the word 'owners' to denote the sense of responsibility and independence that the people who set up self-managed funds take on. The criteria for membership of our organisation is that you must be either a trustee or a beneficiary—in most cases, these are the same people—of a self-managed fund. The reason why we are here today is that we have taken an active interest in the development of superannuation policy; in particular, the role of SMSFs within the superannuation system. As David Knox said—and I guess it is a pretty obvious statement—the Tax Expenditures Statement is clearly an important official statement. I guess that is recognised by the committee taking an interest in how it is developed. Its purpose as described in the 2014 statement is to help inform debate on the efficiency and equity of the tax system, and therefore it is influential in policy decisions by governments and, by extension, the policy positions adopted by political parties.

Our key interest is obviously superannuation, and we welcome an open and rational debate regarding the efficiency and equity of our superannuation system. We therefore believe it is in everyone's interest for the numbers reported in the TES to properly inform debate on the subject, in accordance with the stated objective of the TES. However, the tax expenditure figures in the TES are often aggregated to come up with the figure of about $32 billion, and higher, which is often referred to in public commentary, in the media, and in arguments put to government. The claim that the super tax concessions are costing the budget $32 billion and more is often taken up by those who are arguing that these concessions cost the budget too much, and that commensurate savings could be made if superannuation tax concessions were eliminated or wound back. We believe it has distorted debate on the subject and hindered progress towards community and political consensus as to any future changes to the system.

There are four reasons why the current reporting of superannuation tax concessions is misleading, and frequently so, and therefore unhelpful in assisting debate as to improvements to the efficiency and equity of the superannuation system. First, it is derived from adding together two components that really should not be added. Treasury cautions that they cannot be added together, yet has even done so itself in the TES statements until 2013 and in statement 5 in every budget until 2014-15. We think that adding them together is a bit like double accounting and means that the 32 billion number is clearly not the amount of tax the government would save if there were no super tax concessions.

Ms BUTLER: I am sorry, what did you just say? Just the end of your first point; the last sentence.

Mr Fairweather : Adding two components of superannuation tax concessions to come up with a 32 billion number, or going up to 50 or 55 in the future, is a bit like double accounting. Clearly, the 32 billion number is not the amount of tax the government would save if there were no super tax concessions.

The second problem is that we believe it uses a benchmark that was reported by Ken Henry in his landmark report back in 2009 which is inconsistent with an efficient savings taxation system. It is also now generally accepted internationally to be inappropriate. Superannuation tax expenditures would be substantially lower, if an expenditure tax benchmark was used. Treasury uses the income tax benchmark, which we believe has exaggerated the extent of the superannuation tax concessions.

Third, the TES does not refer to the additional cost in age pension payments, if the concessions on superannuation were reduced or eliminated—there was an earlier discussion on that point—nor does it acknowledge that superannuation tax concessions actually make economic and fiscal sense. Almost all of an individual's superannuation pension is funded by the money that they contributed or saved, rather than spent, during their working life and the investment returns on their savings. We have calculated that the tax concessions comprise less than 10 per cent of the funding base of such superannuation pensions. In contrast, the age pension is funded 100 per cent by the government. We are saying in simple terms that it makes more sense for the government to contribute a relatively small part of private retirement savings via tax concessions than to bear all the cost of the age pension.

Some tax expenditures lead to direct savings in the federal budget; others are for social reasons. We believe it would assist any open debate on these issues, if the TES more clearly identified which tax expenditures lead to direct savings and provided an order of magnitude estimate of such savings.

The fourth reason is that we believe the overall impact of the tax expenditure statement is distorted by what it does not report. An obvious example of that is the setting of income tax rates. The reason given for there being no reporting of changes to our progressive income tax scales is that this is a fundamental structural element of the tax system. By the same logic, one could argue that, since superannuation savings have always been concessionally taxed, it would be equally rational to remove such reporting from the TES. However, a preferable approach, which, as we know we have one of the most progressive income tax scales of the developed world, is to include some reporting of the impact of variations in income tax scales. This would assist in putting all tax expenditures in context and help a rational debate of the most efficient and equitable tax system overall.

For these reasons we submit, in particular, that first, Treasury should report superannuation tax expenditures using the expenditure tax benchmark. Second, Treasury should be clearer, and indeed stronger, in its warnings about the limitations of the tax expenditure statement—with regard to superannuation, in particular—and warn against aggregating the figures, which is a common thing that is done. Third, where the TES numbers for superannuation are misquoted or misused and clearly hindering a well-informed debate on reform of the superannuation tax system, we believe Treasury should point this out more promptly, loudly and directly, and be more proactive in taking responsibility for ensuring that the market is not being misled by misinterpretation of its report.

We believe that Mr Heferen, the head of Treasury's revenue group, is to be applauded for stating earlier this year that TES has no policy message, the estimates are unreliable and the TES does not indicate the revenue that would be recovered if the superannuation tax concessions were removed. His comments came in answer to a question at an industry conference back in March. Subsequently in his speech of 3 June, the then Assistant Treasurer also clearly spelled out what the TES does and, importantly, does not do. It was a clear statement about the limits of the TES in relation to superannuation. However, the $32 billion number is still being widely misused in public commentary.

As you know, directors and officers of public companies have a responsibility to promptly correct false or misleading statements attributed to their company. We think that that sort of standard should also apply when it comes to government departments when official figures are published, and if they are clearly seen to be misused then I think Treasury and other government departments should draw attention to that fact.

CHAIR: Thank you, Mr Fairweather.

Mr WILLIAMS: As a general question: how does your body differ from the Self Managed Super Fund Association in terms of your role and scope?

Mr Fairweather : The Self Managed Super Fund Association, which was previously known as SPAA, the SMSF Professionals' Association, represents the service providers to self-managed funds—that is, advisers, accountants, lawyers and so on. If you are a trustee or a member of a self-managed fund and you do not have those professional capacities, you cannot be a member of the SMSFA. That, by contrast, is the sole criterion for membership of our organisation. We represent the people who actually have the skin in the game rather than the professional advisers.

Mr Clyde : If I may add to that as well: it possibly highlights that we do not have any commercial motivation or connections. Whereas advisers to members of SMSF Association have a commercial reason for their roles, our members do not have any commercial connections.

Ms BUTLER: But your members have an interest in whether there are concessions on taxation.

Mr Clyde : Oh yes.

Mr Fairweather : We are unashamedly a lobby group, an advocacy group, for the million Australians who own self-managed funds.

Ms BUTLER: When you say that the expenditure benchmark should be used rather than the income tax benchmark, could you give me a bit more information about why the expenditure benchmark would be more appropriate—specifically when we are talking about the concessions on superannuation earnings? I would have thought that an income tax benchmark would be conceptually more appropriate when you are talking about tax on earnings.

Mr Clyde : I will try to answer that. I suppose to be clear on including tax expenditure to a different benchmark, we are actually suggesting that the TES would be most useful if it reported superannuation tax expenditures against the income tax benchmark and expenditure. If anything, I suppose that also serves to highlight the imprecise nature of the figures.

Ms BUTLER: So you would contend for both rather than instead of.

Mr Clyde : I will try to go through our explanation that the expenditure tax benchmark is a more appropriate one, but we recognise the history of reporting against income tax benchmarks. I suppose we are genuinely trying to give our comments on how the TES can be more useful, and I think it is better to have both in there.

Ms BUTLER: So you do not want to get rid of the income tax benchmarked figures; you just want to have a separate entry for expenditure tax benchmark?

Mr Clyde : And we are saying: equal if not more prominent reporting against the expenditure tax benchmark.

Ms BUTLER: My question is really: why? Why would an expenditure tax benchmark be more prominent than a benchmark that is all about taxation of income, when we are talking about earnings?

Mr Clyde : I think, firstly, we do understand that the current benchmark against income taxes has been used since the TES was established back in 1998. However, if, as was reported in the last TES, the objective is to help inform a debate about efficiency and equity in the tax system, then I think Treasury should be cognisant of the developing views internationally regarding the efficient taxation of savings. And I understand—

Ms BUTLER: I am talking about earnings.

Mr Clyde : Earnings on savings.

Ms BUTLER: I am not asking you about the concessions on contributions; I am asking you about the concessions on earnings.

Mr Clyde : Earnings on savings, yes.

Ms BUTLER: Yes, I understand.

Mr Clyde : We now generally, if not universally, recognise that the income tax system provides a bias against savings—and in fact a number of countries, most of the Nordic countries, now have a dual tax system where they treat earned income differently from unearned savings income. And the—

Ms BUTLER: Do you mean a return on—

Mr Clyde : Labour as opposed to savings income. We feel that, if the TES is to provide a helpful estimate—it should ideally provide an estimate of the deviation from an optimal taxation of savings; it is now widely argued that the optimal taxation of savings is not the income tax scale—then it should be compared with a zero or low rate of tax. In other words, the current figure, which compares it with taxation at progressive scales, provides a distorted view, so if it does not provide a figure that helps a debate towards an efficient tax system. The TES itself is actually a bit unclear about what it is doing, and we feel if there is another opportunity for the committee to ask a Treasury official the following question it might help.

A couple of years ago the TES said, 'We compare tax treatment against a standard', and then it says, 'But the standard does not indicate we think this is the best way to go'. Last year that qualification was removed, so it sort of implied to me that they believe it is a correct way to go. It would be very useful to know: is Treasury trying to compare the tax concessions with their view of an optimal treatment of that particular activity, or is it just comparing with another standard treatment? If it is the latter, that really is less helpful than comparing against an optimal one.

I suppose a lot of these arguments were presented in Dr Henry's report in 2009, where he seemed to lay out quite clearly the issues of the bias against savings. He stated then that exempt or close to exempt taxation, of savings would be consistent with a progressive expenditure tax benchmark which exempts the returns to savings. He then also said that a comprehensive income taxation under which all savings is taxed the same way as labour income is not an appropriate goal or benchmark.

CHAIR: So, you make the point in your submission that lower tax rates on retirement savings have always been the case in respect of super, and I believe prior to 1983 there was virtually no tax on super— is that correct?

Mr Clyde : Yes, it was 1988. The taxation in pension phase—there has never been taxation of super earnings despite some—

CHAIR: Given that—and the current tax rates of 15 per cent contributions tax and 15 per cent earnings tax, albeit that the realised CGT tax rate is now 10 not 15—effectively those tax rates have been in since superannuation was introduced. I do not think they have been changed since—

Mr Clyde : It came in, I think, at three per cent in 1988.

CHAIR: Given that both sides of politics have supported that framework, the question that it raises for me is: if that is seen as a normal policy setting, on either side of politics, why are we even treating that as a tax expenditure?

Mr Clyde : Good question. That is why I think, to keep the TES relatively simple and to inform the debate and not confuse it, reporting the two relatively simple numbers in a tax expenditure calculation—which they did two years ago: the expenditure tax benchmark and the income tax benchmark—gives a sort of range. I think otherwise there is a risk that the numbers are considered by a lot of commentators as being more reliable than they are, so it indicates a—

CHAIR: Yes. I apologise: I jumped in ahead of you, Clare.

Ms O'NEIL: Yes. I am sorry: I need to speak in the House in a few minutes, so I will just rudely excuse myself after this. Can you tell us a bit about your members. Who are the membership? How many members do you have? Do you have any information about their net worth and that sort of thing?

Mr Fairweather : We do not have any information about their net worth, simply because we do not ask them. It is their business.

Ms O'NEIL: How many members do you have?

Mr Fairweather : Our members, as I mentioned earlier, are the trustees and beneficiaries—always pretty much the same person. We see our membership or our constituency in terms of, I guess, concentric circles. We start with a core group of people who are paid-up members of the organisation and in effect are shareholders, because we are a public company.

Ms O'NEIL: How many of them are there?

Mr Fairweather : About 250 of those.

Ms O'NEIL: How much is the membership fee to get into that?

Mr Fairweather : There are two categories of membership. There are what we call principal members, who pay $110 a year and a joining fee, and we have what we call ordinary members, who are people who may not wish to participate actively in the affairs of the organisation but want to be supportive, and the fee for them is $55 a year, with no membership entry fee. Then, beyond that—

Ms BUTLER: What about the shareholders? Wouldn't you be limited by guarantee?

Mr Clyde : Yes, we are a public company limited by guarantee.

Mr Fairweather : Then, beyond that key shareholder group, we have people who have signed on as supporters and people who help us to get our message through, and we have about 1,000 of them. Then, beyond that, through other associations we access broader memberships, and those associations might be the Australian Shareholders Association and the Australian Investors Association.

Ms O'NEIL: How do you fund the organisation? Who pays the bills?

Mr Clyde : We are largely voluntary. We are retired, and this is where we are trying to put something back.

Ms O'NEIL: You have a passion for tax.

Mr Clyde : I suppose, although our role is meant to be—and is—to represent SMSF owners, a lot of the work we have been doing in the last three years is actually more general in terms of the structure of super. We have built a simulation model—quite a sophisticated one. My background is in financial analysis and modelling.

Ms O'NEIL: What I am really trying to understand here is: if the tax concessions were changed, do you think that anyone who is a member of your organisation is going to be on the age pension and live on $30,000 a year? Is that realistic for your members, do you think?

Mr Fairweather : I doubt it.

Mr Clyde : I do not know, really.

Ms O'NEIL: What savings would government make from scrapping the tax concessions that go to your members altogether?

Mr Clyde : It is one of these interesting issues, I think, about the TES debate earlier.

Ms O'NEIL: It is not really about the TES.

Mr Clyde : No.

Ms O'NEIL: Really what you are asking for, like the previous guy, is something to the TES. We do not model behavioural impacts in the TES. We do not do that for any other category, so I think what you are asking for is a separate statement which explains what you believe to be savings that come from the concessions.

Mr Clyde : I suppose the point I was going to make is that we have tended to focus on what is the most efficient, ideal system for pension and retirement systems in a steady state, in the long term. I understand moving from here to there has implications. If you talked to our members who have already saved their super and you asked what impact it would have on them, they do not have many choices if they have retired. What I would suggest is a better question is: in the longer term, what is the impact of superannuation concessions? Our modelling has shown that the savings in age pension are greater than tax concessions at every level of income—we have modelled by income—and the cost to the government of the age pension plus tax concessions shrinks with rising income. That is not to say that there aren't adjustments that can be made to the equity super and we are not saying that should not be looked at; we just think that the information should be as reliable as possible.

Ms BUTLER: You would have an actual membership of your organisation. If I got ASIC to give me a copy of your membership register, there would be what, around 1,000 actual members of the company under the guarantee?

Mr Fairweather : No, 250 of what we would call shareholders.

Ms BUTLER: We cannot really call them shareholders, if it is a company limited by guarantee, but analogous to shareholders.

Mr Fairweather : Yes—members.

Ms BUTLER: And of those 250, you don't really know what their net worth is, as you said before.

Mr Fairweather : No.

Ms BUTLER: But it is fair to say, isn't it, that if they are people who are prepared to shell out some money and be members of an organisation like yours that they would possibly stand to lose in the event that there was any reduction of the concessions that applied to the earnings on their superannuation.

Mr Fairweather : I think that is a fair assumption, yes.

CHAIR: That is not the point that is being argued though.

Mr Clyde : That is right. It is maybe worth making a point that we, if you look at the details of our company, have got a number of fairly distinguished lawyers on our board—

Ms BUTLER: You also have someone who was—not to be blunt—around at the time that compulsory superannuation was introduced, I think—

Mr Clyde : That is true.

Ms BUTLER: which would have been pretty fascinating, and I can understand why you would have a lifelong interest as a consequence. You clearly have very great expertise and history.

Mr Clyde : But the point I was going to make also is that, from the outset, we have set a benchmark for ourselves that, even though we are representing members of SMSF, we endeavour as much as we can to be totally objective about superannuation and the role of SMSF, so we are not biased in that sense.

Ms BUTLER: I suggest that I was obviously just commenting on Mr Fairweather's previous knowledge of this building and the long interest, I would expect, that you would have in superannuation—I would have been very interested had I been around at the time of superannuation.

Mr Fairweather : No more so than any other area, and I do not think that any of us would claim to be experts in superannuation. Our interest is driven by the fact that we all have self-managed funds, so we have a natural interest in the policy environment that surrounds them.

CHAIR: The importance of this discussion is about ensuring that the information that is presented in the tax expenditure statement is able to be used by whoever wants to use it in a manner that gives them proper, detailed information of actually what is occurring as a result of those concessions and takes into account—as Clare has pointed out and was discussed earlier, maybe there is a role for Treasury to do some longer-term modelling of the superannuation concessions and the savings that are accrued on the pension side as a result. However—and I made the comment to Mr Knox earlier—I am not aware of any allowance in the current calculations for the savings that accrue to the pension system presently. I do not believe there is any offset and the tax expenditure statement to those superannuation concessions that accrue. For example, that save will reduce the age pension liability this financial year—would that be—

Mr Clyde : That is correct. Our approach is different from Mr Knox's slightly: I suppose we take a simpler approach and, whilst one might be able to do some modelling, I understand the earlier comment about the difficulty of that. We feel that, at a relatively simple level, it would still help the debate if one said, 'If there were no concessions and no super system and everyone was on the age pension, this is the cost this year'—$72 billion or something like that, over and above the current cost of $45 billion. That would help. We generally think there are just four simple things that could be done to make the statement much more useful.

Mr Fairweather : Plus, as I mentioned earlier, some helpful warnings on the TES to say what it really is and what it is not.

Ms BUTLER: We were talking about the usefulness of the income tax benchmark versus the expenditure benchmark. I want to go back to the way the superannuation benchmark is described in the TES, which is as follows. On the bottom paragraph of page 134 it says:

The income tax benchmark treatment of superannuation is that contributions are taxed like any other income in the hands of the fund member, earnings are taxed like any other investments in the hands of the investor and benefits from superannuation are untaxed.

Could you help me with my understanding of how you say that ought to be—not different, because you say that there should be other information alongside or more prominent?

Mr Clyde : Dr Henry explained it much better than I can. I have his clauses here. It goes to the objective of the TES. If the objective of the TES is to do this paragraph, then this paragraph by circular logic is correct. But, according to Treasury itself, the objective is to be helpful to a debate about an efficient and equitable system. If the taxation of earnings on savings outside super and other concessional structures is not the most efficient, then comparing the treatment and super with that is, by Treasury's argument, I think, and it is certainly Dr Henry's argument, not as helpful as it could be.

Ms BUTLER: I understand. I take you to page 5. At the top of page 5 and at the very bottom of page 4 there is some discussion about revenue gain estimates. We were talking earlier about the fact that, with superannuation, you are given both the revenue forgone estimates over the forward estimates and the revenue gain estimates over the forward estimates, with the latter obviously being directed at taking into account behavioural change. One of the points that you have made is that there ought to be more caveats and warnings around the treatment and use of those estimates. Are there things not on page 5—particularly caveats, warnings and counselling around how to use the revenue gain estimates—that should be there? You can see that they talk about why you need to treat revenue gain estimates with particular caution and the difficulties with—

Mr Clyde : In terms of presentation, if that is your question, I suppose we feel quite strongly. I have examples, if you would like. The debate has been influenced by people who probably do not read page 134 or maybe even page 4. Our feeling is that the document should be clearer. In terms of caveats, the first point is that you cannot add the two superannuation concessions together, which they do say, but then they tend to still add them together. A number of people still do. The second is the two benchmarks. The third is that I think the caveat they have about behaviour should be in there, but it could almost be on one page with capital letters rather than—

CHAIR: Whilst they put that in there, it always requires the people who use that information to use it correctly—

Mr Clyde : I know.

CHAIR: which I think is the point you are making, in part.

Mr Clyde : It is.

Ms BUTLER: You compared the obligations of directors and officers in publicly listed companies—the quite appropriate obligations they have to make disclosures to the market. Those obligations arose because of their special relationship with shareholders and the obligations that they have in common law and under the Corporations Act in respect of those shareholders. But I cannot take it to suggest, can I, that ministers or heads of government departments owe the same obligations to the public at large? And, secondly, I do not think I can take it to mean, can I, that every time someone in Australia misunderstands something that has been published by government that there should be a special task force to go out and correct the record? People say wrong things on the internet all the time. If I tried to correct everything that is wrong on the internet I would never do anything else.

Mr Clyde : No, I am saying that there are those responsibilities on directors and officers of public companies who are looking after the funds of their shareholders. We feel it is difficult to justify senior public servants being held to any lesser standard, because we feel they are responsible for administering the funds on behalf of all Australians. It is very similar to a public company, though they are not listed. The impact of not doing that has been evident over the last couple of years.

Ms BUTLER: But don't you necessarily politicise the senior public servant's role if you are asking them to do something inherently political, which is to express a view about the effect of a tax expenditure statement?

Mr Clyde : I do not think we are asking anyone writing a TES to do anything political; we just hope that the TES will provide helpful information for the debate of super. It is not political.

Ms BUTLER: Duncan has talked about people being misquoted, and has said that Treasury should point out their views more loudly. Aren't you at risk of putting those senior public servants in a position where they are trying to make an assessment about the accuracy of assertions that are made about the possible consequences of the numbers in the TES, thereby politicising their roles? Isn't that putting them in a pretty difficult position?

Mr Clyde : It might be similar. As I say, people in public companies are in a similarly difficult position.

Ms BUTLER: But it is not equivalent, is it? We are talking about people with set obligations to their shareholders as directors; you are talking about public servants who have obligations of fidelity to their employer, the Crown, and you are trying to equate their obligation as being one to—

Mr Clyde : To the people of Australia. Yes, an obligation to the people of Australia.

Ms BUTLER: individual people.

Mr Clyde : I simply feel they should have an obligation to the people of Australia.

Ms BUTLER: Don't they have an obligation to serve the people of Australia by serving the Crown through the representative democracy? And aren't the ministers actually accountable?

Mr Fairweather : I think that is correct but, in the first instance, if the TES were much clearer in spelling out what it is and what it is not, that would be helpful. Then we would like to see Treasury officials being a bit more proactive, particularly in correcting commentary in the media. We initially raised this issue with Treasury at the beginning of 2013, and it was not until the beginning of this year—in March, I think—that a senior Treasury official said in a public forum that you cannot read certain things into the TES. We had been talking to them all through that period. We initially found a reluctance by Treasury officials to accept our questioning of the TES number and certainly a reluctance to do anything about correcting it. We have made a fairly strong statement there but, given the history of our involvement in this issue, we feel justified in making it.

I understand that it puts a senior public servant in a difficult position if he or she is obliged to come out and correct a minister or a member of parliament. I quite understand that that is not on.

CHAIR: Isn't it part of the problem that there are members of parliament using that figure incorrectly as well?

Ms BUTLER: If that is the case.

Mr Clyde : I was primarily thinking of correcting third parties outside of parliament, but it has been as widespread as parliament.

Ms BUTLER: Isn't your complaint then that actually the persons with whom you share a view are being just not very good at prosecuting their argument? Shouldn't this be a matter for ministers and MPs, not for public servants who are trying to just give depoliticised advice?

Mr Clyde : I am trying to keep it pretty simple and not political. If I, as a party, publish a document that is intended to be helpful—it is there for a reason—and it is being misused or misunderstood, we just feel there should be a culture of a greater sense of responsibility than there appears to be at the moment, to correct that misconception—not two years down the track. And, even two years down the track, Rob Heferen made a comment at a fairly small conference; there was no official announcement from Treasury, though the Assistant Treasurer did make a comment. I find it disappointing in terms of properly informing Australians so we can have a proper debate about superannuation.

Ms BUTLER: Just on this question of whether the TES should be clearer about what it is and is not, I did not understand you to be suggesting any more specific caveats that should be included; it was more about drawing people's attention to the caveats that are already there.

Mr Clyde : I think they are there. You can't add them together—the behavioural aspects which we do not go into particularly. We think they should be two benchmarks.

Ms BUTLER: I do not want to put words in your mouth but if, for example, you get to the revenue gain and revenue forgone measures at about page 125, if you had a signposting in 124-125 that said, 'Hey, if you're reading these pages, you probably should go back and have a look at pages 4 and 5,' would that serve to assist you, do you think?

Mr Clyde : I am not sure if you want our advice on how to write it! We would have to consider it.

Ms BUTLER: You have just said it needs to be clearer, and I asked you if there were any additional caveats that you think should be specifically included, and it sounds as though you think they are there; it is just a question of—

Mr Clyde : Making them clearer, yes. They obviously have not been clear, by the response, for everyone from independent think tanks to journalists and politicians. The caveats obviously have not been clear; I think we would all agree on that.

Ms BUTLER: I think they are pretty clear, and I have read them and I understand them.

Mr Clyde : Clear to you, but not clear to many other people who were influencing the debate.

Ms BUTLER: Do you have specific examples?

Mr Clyde : Yes.

CHAIR: I think there are a few in your submission.

Mr Clyde : In our first—in our redacted submission.

CHAIR: Are there any concluding remarks you wish to add to what we have covered today?

Mr Fairweather : No, I think we have covered it fairly well. I would just like to thank the members of the committee again for the opportunity to come and present to you today and air our views.

CHAIR: Thanks very much, Mr Fairweather and Mr Clyde. On behalf of the committee, I thank everyone for their evidence today. I would also like to thank Hansard and broadcasting for their assistance. I declare this public hearing closed.

Committee adjourned at 17:33