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Tuesday, 9 October 1984
Page: 1466


Senator WALSH (Minister for Resources and Energy)(4.14) —I can respond partly to that right now because I have a note delivered to the Treasurer (Mr Keating) by the Commissioner of Taxation on this subject. Among other things, it says:

The existing law contains very complex provisions to guard against misuse of the concession now in the law, which allows a company to carry forward a loss for deduction in the succeeding year. Redeemable preference shares have a long history of use in tax avoidance arrangements. Other complex anti-avoidance provisions could also be necessary if anything less than a 100 per cent common ownership of all shares test is adopted. This would all add to the administrative complexity of the scheme.

The Opposition will also remember that a concession along the lines proposed was considered by both the Asprey Taxation Review Committee and the Campbell Committee of Inquiry into the Australian Financial System. Those committees recommended a 100 per cent common ownership test, although the latter suggested that consideration would be given to lowering the limit at some future date.

The principal reason why the Government is opposing the amendment proposed is the fears expressed by the Australian Taxation Office, with its long experience, that it opens up at least the possibility of avoidance or evasion, and that if the Government were ever to extend the concession in the way that the Opposition has proposed, it would need at the very least considerable time to comb carefully through the Act and other provisions of the Act in order to guard against the possibility of use for avoidance. For those who are interested, I also draw attention to the comments made by the Minister for Housing and Construction and Minister Assisting the Treasurer, Mr Hurford, on this matter in the House of Representatives on 2 October, as reported at page 1405 of Hansard.