Mr Edwards asked the Treasurer, in writing, on 6 December 2004:

(1) Is it the case that income earned by Australian resident taxpayers derived from service in the Joint Petroleum Development Area is taxed by the Government of East Timor and is also assessable under subsection 6-5(2) of the Income Tax Assessment Act 1997; if so, will he explain why this income is taxed by both governments.

(2) Will he review this unfair double impost with a view to ensuring that these residents are only taxed once on their earnings.

Mr Costello (Treasurer) —The answer to the honourable member's question is as follows:

(1) Income derived by an Australian resident from service in the Joint Petroleum Development Area is subject to Australian tax and may also be taxed by the Government of East Timor. However, no unfair double impost exists because in these circumstances Australian residents will receive a foreign tax credit for any East Timor tax paid up to the amount of the Australian tax payable in respect of that income.

(2) Refer to answer to question 1 above.