Senator COOK(1.04 p.m.) —I foreshadowed, firstly informally before we started and then in my speech during the second reading stage, that I had a question relating to Chile and the impact of this legislation which comes under schedule 2, foreign investment funds. For the information of the Parliamentary Secretary to the Treasurer (Senator Ian Campbell), I have a letter from a management fund, Genesis Management Australia Ltd, which, from the tone of it, although it does not say explicitly, would be in the possession of the government because it is a letter related to the information paper released in December last year by the Treasurer, Mr Peter Costello, on the subject of proposed changes to the taxation of foreign source income.

I do not propose to read the letter—it is quite a long letter and has attached to it a fairly thick submission—but I do think it raises a relevant point which gives rise to a series of appropriate questions. In this letter, the authors say that they submit that the FIF exemption of their fund, the Genesis Chile Fund Ltd, should not be withdrawn, but should be granted in an alternative form. They go on to say that:

The submission notes that in the case of Chile the proposed change would be revenue neutral in that existing investors in Chile via Genesis Chile Fund Limited would be obliged to withdraw their investments. The removal of the exemption would only close to Australian investors a currently legitimate commercial activity with no evident compensating benefits either to the commercial sector or the Government.

They go on in the letter to refer to a report by Langton Clarke y Cia Ltda, which, I understand, is a major Chilean chartered accountant firm based in Santiago and an associate of Coopers & Lybrand internationally. They say that the report demonstrates that there has been no investment liberalisation in Chile; and a series of points are made—I will read them but they are (a) to (f)—all of which point to what the lack of investment liberalisation in Chile is and what the requirements are of foreign investors. I have identified this letter and the accompanying submission because I believe it would be in the government's possession. Let me quote from the concluding paragraph of this letter where the author, Mr G.C. Harrison, who is the Director of Genesis, says:

We believe that we have demonstrated in this material that the investment conditions in Chile under which FIF exemption was granted to Genesis Chile Fund Limited have not changed, and that accordingly Section 513 and Schedule 11 of the Income Tax Regulations should not be repealed in respect of Genesis Chile Fund Limited.

I ask Senator Campbell: firstly, to his knowledge, has the trade minister or the Department of Foreign Affairs and Trade been alerted to the impact these measures would have on investment in Chile; secondly, what is the government's response to the submissions made by Genesis Management Australia Ltd in their submission; thirdly, do they concur with the conclusions that Genesis Management Australia Ltd draw on the impact of this legislation on their Chilean investments?