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Monday, 22 October 1984
Page: 2097

Senator MESSNER —My question is addressed to the Leader of the Government in the Senate. It concerns the Prime Minister's announcement on what would or would not be included in a capital gains tax and seeks some further information on Mr Hawke's statement that losses incurred on dealings in assets could be offset against gains. Does the Minister envisage that there would be a limit on the time over which losses could be taken into account? For example, would it be fair to assume that only losses incurred during the current financial year would be taken into account?

Senator BUTTON —If as a result of a comprehensive review of the taxation system, which is much needed in this country and which the Government has promised, there is a recommendation to the Government about the inclusion of some additional form of capital tax in Australia over and above those capital taxes which already exist, the question of exemptions which would come up with that proposal would also come up for consideration by the Government. Not only would the question of exemptions in relation to matters asked of me by Senator Chaney come up for consideration but also those matters raised by Senator Messner. I make the point again that wherever taxes of this kind apply, as they do in every other Organisation for Economic Co-operation and Development country, as I understand it, there are, of course, exemptions provided for and they have to be considered in the context of the overall tax mix in a particular country.

In conducting a review the Government will be taking into account a wide range of views expressed by various community bodies. For example, the Business Council of Australia has views on the desirable taxation mix in Australia and what can be done in terms of business taxes. It also has views about so-called capital gains taxes. Of course the Business Council of Australia would advance a view to the Government that there ought to be particular exemptions which, if such a tax was proposed, would relate to business activity. Just as the Business Council of Australia has those views, so does a wide range of other bodies which will have input into the comprehensive review to be conducted by the Government. Those views will have to be taken into account by the Government at the time.

Senator MESSNER —Mr President, I ask a supplementary question. In the light of the Minister's reply, am I right in assuming that the Prime Minister's assurances about the exemption of capital losses are therefore not in force and that everything is open until the tax review is actually held and a report is received?

Senator BUTTON —I do not know what Senator Messner means by 'being in force'. In the context of the current election, if everything that was said by politicians, and particularly the Opposition, were in force this country would be in for a diabolical time economically. As I indicated earlier in answer to the honourable senator's previous question, if any such tax or increase in such tax were recommended the question of exemptions would have to be considered at the time. The Prime Minister has indicated what matters he would regard as relevant if those circumstances arose. They are matters which, of course, are widely regarded as appropriate exemptions in all other countries.