Senator COOK —My question is to Senator Kemp, the Assistant Treasurer. Is the minister aware of comments by Professor Krever, professor of tax law at Deakin University and one of the five independent consultants who advised John Ralph, that the Ralph review found two main groups of winners from changes in the capital gains tax, one being the very rich and the other being the wives or husbands of the very rich? Is this true? Will the government release the specific capital gains tax research which shows this to be a fact?

Senator KEMP (Assistant Treasurer) —If my memory serves me correctly—and maybe the Labor Party will correct me—I thought that in the first 24 hours after its release the shadow Treasurer, Simon Crean, broadly endorsed the Ralph committee report and also the capital gains measures. If that is not correct, I would appreciate it if Senator Cook would get up and clarify in his supplementary question the Labor Party's position. Are they for the capital gains tax measures which we have announced in the Ralph report, or are they opposed to the capital gains tax measures? I think it is a very big issue in the business community. The behaviour of the Labor Party in relation to the Ralph committee is causing some concern. The Labor Party are all over the place. I have received questions from people who have been worried about the very substantial concessions which have been given in relation to capital gains tax, where other Labor senators worry that the new measures are too harsh.

The PRESIDENT —Senator Kemp, I draw your attention to Senator Cook's particular worries today.

Senator KEMP —That is what I am saying. Madam President, my view is that the measures that were announced in the Ralph committee report on capital gains were developed after a very long period of consultation with the industry, with experts. They were designed to give Australia an internationally competitive tax system and to simplify our tax system. My understanding is that a fair summary of the newspaper reports indicate that the measures have been very widely welcomed.

There may be certain people who are unhappy about particular aspects of this. They are entitled to their views. But, in considering the Ralph committee report, the government was considering a report in respect of which an enormous amount of work had been done to consult with the community. Unlike the former Labor government, we are a consultative government. When this government brings about big reforms, we go out and talk to people, we listen to people, we release discussion papers and we consult. As a result we produced a report. The government has announced its response to the report, which I think has been extremely widely welcomed in the community—and, I might say, initially by the Labor Party.

Now I am going to sit down, Madam President. We on this side of the chamber and, even more importantly, the business community are waiting on Senator Cook to stand up and say whether the Labor Party supports the capital gains measures announced in the Ralph report or whether it does not. It is a very important question, Senator Cook. The community is waiting for you to stand up and give us a clear response.

Senator COOK —Madam President, I ask a supplementary question. Minister, the initial question that you dodged was: will you confirm that the Ralph review found two main groups of winners from changes in the capital gains tax, one being the very rich and the other being the wives or husbands of the very rich? That was the question.

Minister, while you are at it, are you further aware of statements by Professor Krever that he is sceptical of US studies suggesting that a cut in capital gains tax will lead to more tax being paid overall when other US studies suggest the opposite? Did the government consider alternative US studies that suggest the opposite to what the government has claimed, or was the government only interested in a predetermined outcome and just went looking for a study—any study—which supported its predetermined outcome?

Senator KEMP (Assistant Treasurer) —I have to say that I think everybody noticed that Senator Cook ducked the challenge. Senator Cook had the challenge—a few simple words, and all that confusion would be gone. As usual with hard public policy issues, the Labor party goes missing in action.

Senator Cook —Madam President, I raise a point of order. I have repeated the first question twice now. This is question time, in which questions are asked of the government; it is not an occasion on which the government asks questions of everyone else. I would be grateful if the government would actually attend to answering the question put. My point of order is that the minister is not answering the question. He is filling up the time with needless bravado, but he is not answering the question. Madam President, will you please direct him to answer the question put to him?

Senator KEMP —Madam President, on the point of order: I was asked about the capital gains tax. I explained in detail the government's response on the capital gains tax and why we supported the Ralph committee proposals in relation to capital gains tax. I simply asked whether the Labor Party could clarify its very confused position on it. I do not think that was a big task, and Senator Cook refused to do it. I submit to you that my answer was particularly relevant to the question. But, even more importantly, it was relevant to public debate. Everyone is just waiting to see where the Labor Party stands on this important issue.

The PRESIDENT —Senator Kemp, it is not appropriate for you to ask the opposition questions at this time. There is another time to do that. Do you have anything further to say on the answer?

Senator KEMP —Yes, Madam President. I think it is true that Senator Cook needs to be protected from these sorts of issues. Ralph estimates that, notwithstanding the reduction in the CGT rate, the CGT reforms will be revenue positive. Contrary to what Senator Cook just said, we believe that overseas experience supports the conclusion that a lower CGT rate increases realisations and reduces the lock-in effect—that is, people's reluctance to sell because of the tax. A strong short-term response effect of a lower CGT rate is expected. (Time expired)