Senator KEMP (Assistant Treasurer) (5:16 PM) —Senator, I did hear your remarks in the Senate. It was a rather interesting speech that you made, if I remember rightly, not so much for its content but for the way it was delivered. I have got a brief on the matters you have raised. That brief is coming down and as soon as it comes into my hands I will provide you with the answers. I had the remarks that you made to the Senate analysed by my advisers. You fooled me, Senator: I thought you were going to ask me a question on it in question time. I was ready to respond to you at 2 o'clock today, but the folder has now gone up.

Mr Temporary Chairman, I can now assist Senator West. Senator West was concerned about a variety of questions, but one of the principal ones was: will farmers have to distinguish between GST-free sales of wheat to the Australian Wheat Board? The short answer is no. In detail, all sales of wheat by farmers to the Australian Wheat Board will be taxable. It is only sales made by the AWB to overseas buyers that will be GST free. Sales by the farmer to the AWB are not export sales, even though the AWB will export some of the wheat. The Wheat Board is the exporter, not the farmer.

The Wheat Board will be entitled to claim input tax credits for the GST included in the amount paid to farmers. Farmers will be able to claim input tax credits for all their business inputs, regardless of whether their sales of wheat were taxable or GST free. If the Wheat Board loans money to farmers, there will be no GST payable by the farmer in respect of the loan payment. When payment for wheat is made by the Wheat Board, that is the time that the farmer who operates on a cash basis will account for the GST.

With regard to the farmers operating on an accruals basis, the Australian Taxation Office is working with the industry to determine a time at which the GST liability will arise. Just to round off your comments, sales of wheat that were delivered prior to 1 July 2000 but where payment is received after 1 July 2000 will not be subject to the GST. That probably covers the questions that you raised.