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Monday, 22 August 2011
Page: 5100

Senator CARR (Victoria—Minister for Innovation, Industry, Science and Research) (21:41): I indicate that the government does not support these arrangements. The use of the concept of aggregate turnover is applied throughout the Income Tax Assessment Act and is based on a 40 per cent threshold for deeming control of related entities and it would remain open for firms to demonstrate that a 50 per cent threshold is appropriate in their circumstances, so there is no justification for continuing with the obsolete broader 50 per cent threshold used in the 1936 act. So by reinstating the obsolete 50 per cent threshold, the amendment would facilitate tax planning entities which are not truly small and medium sized enterprises and could manipulate their structures to inappropriately access the 45 per cent refundable tax offset.

Question negatived.