Mr ANDREW —My question is directed to the Treasurer. Is the Treasurer aware of reports which have recently come to light regarding rorting of the syndicated research and development program? What action is the government taking to address these concerns?

Mr McClelland —Mr Acting Speaker, on a point of order: the honourable member should be required to authenticate those so-called reports. It is quite unreasonable for anyone—

Mr ACTING SPEAKER —That is no point of order. Resume your seat.

Mr Crean —Mr Acting Speaker, on a point of order: questions shall not allude to matters of a hypothetical nature. If in fact it is being asserted that the rorts have occurred, let the government demonstrate those rorts occurring—and do it in a formal sense. They cannot do it by way of a question that asserts it. The question is out of order.

Mr ACTING SPEAKER —The question is not out of order, and the Treasurer will answer the question.

Mr McClelland —Mr Acting Speaker, on a point of order: I refer to the Browning edition of House of Representatives Practice and page 520 where it states:

It has been held that the questioner must vouch for the accuracy of any such report referred to, not simply for the accuracy of the reference to it.

That is reference footnote No. 127, House of Representatives debates, 7 September, 1977.

Mr ACTING SPEAKER —I think it is appropriate if we take the quote from Browning not out of context but in its full context:

As he was in no position to adjudicate on the matter the Speaker accepted the questioner's authentication at face value and suggested that if any misrepresentation was involved this could be corrected in a personal explanation after Question Time.

There is no point of order.

Mr COSTELLO —Thank you, Mr Acting Speaker. The government has been concerned for quite some time about tax avoidance.

Mr McClelland —A point of order!

Mr ACTING SPEAKER —Order! Treasurer, have another little rest.

Mr McClelland —With respect, Mr Acting Speaker, I accept your ruling. However, the honourable member has not authenticated the statement alleging rorts.

Mr ACTING SPEAKER —The only response on authentication is that it appears in the paper.

Mr McClelland —That has not come from the honourable member.

Mr COSTELLO —This government is concerned about tax avoidance and tax rorting. This is a government that is prepared to act against it.

Mr Acting Speaker, you would be aware that on television last night a number of serious allegations were made about R&D syndication. Let me make it entirely clear that this was a government that was aware of problems in relation to R&D syndication and this was a government prepared to act against it. This was a government prepared to act against tax avoidance, unlike the Australian Labor Party, as you have seen, which is extremely sensitive about its record on tax avoidance—a position which it maintains to this day.

On 23 July, the Minister for Industry, Science and Tourism and I announced the government's decision to close off new syndicates qualifying for R&D tax concessions. We had been concerned about the growing evidence that the program was being continually exploited by finance promoters for tax minimisation purposes. Typically, syndica tion arrangements provided significant taxation benefits for investors but limited direct assistance to researchers.

Syndicate arrangements approved by the IR&D board show that on average the government was paying in excess of $2 for every $1 of R&D expenditure. Examples were provided to us where researchers had sold core technology for $1,000, and then on-sold three days later for $14 million into syndicates where the full R&D tax concession was claimed. Other examples have been provided where $8.76 million of tax benefits were provided but ensuring only $4.16 million went on new R&D activities—a Commonwealth subsidy through the tax system of $2.10 for each new dollar on R&D.

The Labor Party was prepared to tax pensioners and to allow huge tax rorts to open up, and you were not prepared to take decisive action against it. Not only was that bad enough—

Mr Crean —Could I take a point of order, Mr Acting Speaker. I go to the issue of relevance. Will the Treasurer acknowledge that we introduced legislation to amend it and he opposed it?

Mr ACTING SPEAKER —There is no point of order.

Mr COSTELLO —I will tell you why he is going to the question of relevance. Because he, the punitive shadow Treasurer, on 8 September said—

Mr Crean —Why did you oppose it?

Mr COSTELLO —On 8 September he said, `We, on being returned to government, will reinstate these programs, and we will love you now for as much as we can get reversed.'

Mr Crean —We will support your legislation.

Mr ACTING SPEAKER —Order! The honourable member for Hotham.

Mr COSTELLO —This is a party that not only protected tax avoidance right throughout its period in government but wants to bring it back. You want to bring it back if you are ever elected. And, in relation to the expenditure issues, you name in the expenditure measures how you are opposed to the government if it is to close down this rort.

Mr Crean —You are a fraud.

Mr COSTELLO —What are the measures that you oppose? You oppose wiping out syndication, you oppose ending tax avoidance—

Mr Kelvin Thomson —Could I take a point of order, Mr Acting Speaker. I am sure that you are not guilty of the things that you are being accused of. I ask you to ask the Treasurer to direct his remarks through the chair pursuant to standing order 59.

Mr ACTING SPEAKER —As I frequently do, I do encourage all members of this House—as I think I said yesterday to the Prime Minister—to address their remarks through the chair.

Mr COSTELLO —Mr Acting Speaker, you are of course completely correct, and we will keep on going until we get every one of them up on a point of order to defend the tax avoidance industry—every single one of them. One of the reasons why this side of the House represents blue-collar voters—

Mrs Crosio —And bottom of the harbour too; tell us about that.

Mr ACTING SPEAKER —Order! The honourable member for Prospect! You have been so good!

Mr COSTELLO —One of the reasons why this side of the House represents blue-collar voters is that we had the courage to move against the tax avoidance industry. We had the courage to do it. This was a Labor Party that had the rorts going, that was making it optional to pay tax if you could get into an R&D syndicate; this was a Labor Party that was not prepared to put a surcharge on high income earners so they contributed to private health insurance; this was a Labor Party that was prepared to allow superannuation tax concessions to run wild because they did not have the courage to stand up to the tax avoidance industry. It is no surprise why it is this side of the House that represents blue-collar voters.

I must say, Mr Acting Speaker, that they have not learned. They are like the Bourbons: they have learned nothing and forgotten nothing. What they are promising, if they are ever re-elected, is that, `On being returned to government we will reinstate these programs.' The member for Hotham said, `We will reinstate these programs.' Well, I hope last night all Australians were proud to see the kinds of programs, and how they operated, that the Labor Party wants to restore.