Mr KELVIN THOMSON (4:56 PM) —In his response, the Minister for Financial Services and Regulation indicated that he was not aware of the Financial Review article. That may be one thing, but the government certainly needs to be aware of the statements made by the Commissioner of Taxation, Michael Carmody, and if it is not aware of his concerns it really ought to be. It is simply not good enough for it to say, `We don't know what is going on here.'

I draw the minister's attention to what Taxation Commissioner Carmody was saying in the area of what he described as `structured option arrangements' because I have a specific query about the impact of this legislation on what are being described as `structured option arrangements'. Commissioner Carmody said:

We are turning our attention to emerging financial products that appear to fall squarely under the description of aggressive tax planning. Perhaps the most aggressive of these are what are described as structured option arrangements. Essentially, these involve a series of put and call options entered into between a merchant bank and the taxpayer/investor.

He also said they understood the need in the market for products to risk manage asset portfolios but that their interest was aroused when the arrangements were structured to produce a loss irrespective of which way the market moves. He also said:

Our intelligence indicates they are marketed to people who have a capital gains tax liability they would like to avoid. In effect, what is offered is a $50,000 capital loss for a $4,000 outlay.

The commissioner talked about arrangements where, no matter which way the market moved, the put and call options were such that the person concerned would incur a $50,000 capital loss. This strikes me as extraordinary, as it seemed to strike the tax commissioner as extraordinary. I wonder, therefore, whether the first part of this legislation, which talked about artificially created capital losses, will deal with this particular problem. Any information that the minister can provide on this point would be most welcome.