Senator MURPHY (2:39 PM) —My question is addressed to the Minister for Revenue and Assistant Treasurer. The minister will recall that, in September last year, the Senate Economics References Committee tabled a unanimous report on proposals for resolution and settlement of the mass marketed tax effective schemes debacle. Those recommendations were developed in consultation with the Australian Taxation Office. In particular, I draw the minister's attention to recommendations 1.25 to 1.29 of the report which deal with a commercial viability test. Despite agreeing with the committee that it could be done and despite the fact that the ATO has been conducting commercial viability tests when issuing tax product rulings, the ATO still rejected these recommendations in the report. I ask the minister: what is the government's position on this issue?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —Thank you, Senator Murphy. This question seems to have a very familiar ring to it, because the whole notion of commercial viability was addressed in a previous answer I gave to a question by Senator Murphy. Senator Murphy has taken a very close interest in this issue. It is an important issue for Australian families, as I think I said yesterday, and the government is concerned about it. Yesterday, I outlined in some considerable detail—and I do not think Senator Murphy was here—

Senator Abetz —No, he wasn't.

Senator COONAN —You have read the transcript—good. Yesterday, I outlined in some considerable detail an offer that has been made by the commissioner to the investors in mass marketed schemes. I will just repeat it because it is a very generous offer: a tax deduction for the actual amount of cash outlaid, a full remission of penalty and interest and a two-year interest-free period for the scheme debt. I also pointed out in fairly careful detail, I had thought, that if any investor was not able to make some decision within the time frame that has been offered by the commissioner—which is 29 May—and if they approach the commissioner or the case handlers on this, or even my office, we will arrange, if the circumstances are appropriate, for extensions of time. As to the commercial viability test, that is not something that has been considered in the offer. Senator Murphy, as I understand it, has received a briefing on this matter. It is not in fact an issue that relates to the settlement that is on the table, and it is not something that is currently in the commissioner's contemplation—and is unlikely to be.

Senator MURPHY —Madam President, I ask a supplementary question. I do not know whether I should thank the minister for her answer. I have never received a briefing, but I certainly have read, and am very aware of, the circumstances of commercial viability. You would also be aware that the primary reason used by the Commissioner of Taxation for rejecting the recommendations was the issue of law relating to financing techniques. Given that the Federal Court has upheld that financing techniques were not in breach of the law, will the government be now requiring the ATO to revisit the issue of commercial viability in the mass marketed schemes area?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Murphy for his supplementary question. It is not really open to the commissioner or the government, or indeed anyone else, to cherry pick through a judgment such as the Bud Plan case, which was delivered in favour of the commissioner, and say, `The judge accepted this argument but rejected that argument.' The fact is that the commissioner won the case. He won the Bud Plan decision, and he has not resiled from the offer that was on the table prior to the Bud Plan decision, notwithstanding the success of that case.

Senator Murphy —Madam President, on a point of order: I asked the minister a very specific question based upon two things. One related to a commercial viability test that the Taxation Office actually conducts and agreed could be conducted. The second related to the issue that the Federal Court had upheld, in the right of the taxpayer, that financing techniques were not in breach of the law. They are two very important points, and the minister is not actually answering the question that I asked her.

The PRESIDENT —There is no point of order.

Senator COONAN —There is very little in the time left available to me to add anything, other than to say that there is an offer on the table. There is a number of investors who have an opportunity to accept or reject that offer or to seek an extension of time, and to try to seek to add by a side wind a commercial viability test is really clutching at straws.