Mr ROCHER —Has the Treasurer been asked by United States venture capital lobbyists to amend capital gains tax laws? Is capital gains tax treatment of exempt US pension funds wanting to invest in Australia inhibiting investments in our high technology com panies? If so, what is the government's response?

Mr COSTELLO (Treasurer) —I would not rule out my having been asked, although it has not come to the top of my attention in recent weeks. I receive numerous submissions and requests in relation to reducing taxes of various kinds, and I have no doubt that there would be lobbyists for venture capital funds who have made representations to me, my office or my department from time to time. You do hear the argument on quite a number of occasions—I have heard it—that a reduction in capital gains tax would help venture capital projects in Australia, but I point out that we already give considerable assistance to venture capital projects in Australia not only through pooled development funds but also through our business innovation funds and through a number of the measures which were actually outlined in the statement by the Minister for Industry, Science and Tourism at the end of last year.

I am not for a moment saying that everything about our tax system in the capital gains tax area is perfect; clearly there is a great deal of complexity. But the government has outlined the primary areas in which it believes tax reform would help the Australian public: the reform of indirect tax; a reform of personal income tax, particularly the impact of top marginal rates on average income earners; the interplay between the social security and income tax systems which penalise low income earners; and a reduction of complexity in relation to the business income tax system which is fraught with difficulty and complexity. As I have outlined, in accordance with the five principles that the Prime Minister laid down, they form the focus of the government's attention to tax reform.