Senator MURRAY(5.26 p.m.) —It may be helpful if the Assistant Treasurer (Senator Kemp) had everybody's views and then responded appropriately. A character in Western Australia who is a prospector said that, if the government is determined to bury this scheme, at least it should give it a decent burial. The point that Senator Cook has made yet again is that that has not yet been done. Hopefully, this debate will finally do that.

I was a member of the Senate economics committee, along with Senator Cook, which originally examined this government proposal. We were, as Senator Cook rightly said, unanimously distressed at the retrospective and unfair consequences of the government's action as intended at that time. We are all aware that prospectors undertake the most difficult and the highest risk task in the mining industry and they are primarily a small business sector.

When the bill came before the Senate last December, it was at a time when there was a flurry of bills and it was the end of the session. The result was a fair bit of stress while these matters were being considered.

Senator Cook did put up his amendment and I put up an amendment. The government clearly understood that they did not have the numbers and they should accede to the general principles we were spelling out—that is, with respect to these conditions under paragraph 23PA of the Income Tax Assessment Act, prospective rights were necessary in order to prevent retrospectivity. That was because mining activity undertaken by prospectors was only realised in the future, and if you cut it off on 20 August 1996—which was the government's intention—it would result in a huge loss of income and benefits to those engaged in prospecting at that time.

We were persuaded by the industry advocates—although some of them wanted a lot longer—that five years was a reasonable period in which to resolve the issue of disposing of their interest in any particular claim. The government did accept that five years. Their legislation now, in terms of the amendment they accepted, states that you had to be a bona fide prospector prior to and at the date of 20 August 1996 and that you would have five years in which to dispose of your asset.

However, when I put up my amendment, which was somewhat narrower than that proposed by Senator Cook, the government came to me and said, `We understand where you're going. We're prepared to accede to your request. We would like to amend it,' and they presented me with an amendment which subsequently passed the Senate under my name. I took that on trust.

In fairness to the government, at that time they were under a great deal of pressure to produce the appropriate wording to get the result that was required. I recall a meeting with the Treasurer in his office at which we agreed the relevant terms of the amendment. That was on 12 December 1996. On 13 December the faxes started coming through from the prospectors saying that they were alarmed about certain aspects of it. That is to be expected but, nevertheless, some of the things that they raised did occasion me some concern. So on 24 December 1996, questions on notice went through to the Treasurer. On 22 April—119 days later—they finally replied to those questions on notice. I do not take kindly to a lack of cooperation and I will record that in my memory bank.

To the credit of government, they recognised that there have been some problems with the amendment and what had happened and they had, in March, introduced the amendments that we now see before us. On 2 May 1997, I wrote to the Treasurer with a rather fulsome amendment to see whether that would meet some of the concerns I still had. On 7 August—66 days later—we finally got a response. As the Democrats only have seven senators, I carry nine portfolios so I am pretty busy, but I think 119 days for a question on notice to be responded to and then 66 days for a letter to be responded to is not competent or efficient.

Fortunately, about a week or two ago the Parliamentary Secretary to the Treasurer, Senator Campbell, entered the scene. He has since proven efficient and competent and has been on my back about these amendments of Senator Cook's, which I welcome because the lack of interest, involvement or concern of the Treasurer and his department is regrettable.

What we have before us does go some way, but not all the way, to meeting the genuine concerns of the prospectors at losing a benefit which they had every right to believe should not be taken away from them retrospectively. I was persuaded by the government that my own amendment, which was rather fulsome, went too far, and I am not persuaded by the prospectors that we have to attend to the valuation issue. There is a ruling in FC of T v. Tully Cooperative Sugar Milling Association Ltd, 83 ATC 4495 (1983), 14 ATR 495 per Fox at ATC 4500, ATR 500 which says, `As a general rule, taxation provisions that provide a benefit are not to be defeated by an illiberal approach.' Basically speaking, that means that the valuations which prospectors bring forward should be treated on their merits and not illiberally by the ATO.

Turning to the amendments before us, my particular concern is that prospectors should be capable of getting rid of their asset in a manner which most suits their intention and their needs. That means that in many respects they may wish to sell that asset or that right to a mining house on a conditional sale basis. In other words, they receive the money for their asset after the sale—post facto. However, as I read the legislation, they would be restricted in doing so in terms of the withdrawal of the 23(pa) provision because that provision only applies at the time the income was derived. In other words, you only get the benefit at the time you receive the money. So if you sell something now and receive the money later, you are not going to get the benefit.

To my mind, the Labor amendment which meets that most important provision is the item at amendment 3. Amendments 1 and 2 on sheet 561—and we are just dealing with amendment 1 at this time—it is my belief, go a little too far and I think it is time to give this thing a decent burial. It will be my intention to recommend that the Australian Democrats do not support the opposition in amendments 1 and 2, but support them in amendment 3.