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Tuesday, 25 November 1986
Page: 2709

Senator SIDDONS(8.40) —I do not wish to delay the Committee either but Senator Chaney introduced a new factor which I think requires an answer. He said that until the Government introduces tax incentives for employee share ownership we are wasting our time. That is not true.

Senator Chaney —It is not what I said either. I said that there are disincentives.

Senator SIDDONS —Senator Chaney said there were very serious tax disincentives to employee share ownership, if I heard him correctly.

Senator Chaney —That is correct.

Senator SIDDONS —The facts of the matter are that there are companies-I am chairman of one-which offer shares to their employees. The last offer of my company was taken up by over 90 per cent of the employees. So the tax disincentives are not very considerable. I agree that there could be substantial tax incentives but with the latest changes to employee share taxation, under which there is no tax on the appreciation of the shares during the time they are being purchased, it is a reasonable proposal under the existing tax legislation to offer shares to employees. As I said, employees have welcomed them in the case of the company I am chairman of and it is--

Senator Kilgariff —What was the mechanism for offering the shares?

Senator SIDDONS —We simply offered shares to a trust and that trust sold the shares to the employees over a period of five years by weekly deductions from their salaries. There was no problem. The shares were issued at the market price to the share trust and the employees then bought the shares. The appreciation on those shares in the five year period is tax free under the amended tax legislation. So it is a perfectly straightforward procedure, one which could be and which is adopted by many more enlightened companies in the community today. So, I am sorry, but the excuses the Opposition is giving do not gel as far as I am concerned.

Question put:

That the amendments (Senator Siddons's) be agreed to.