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Wednesday, 26 November 1986
Page: 2778

Senator MESSNER —Is the Minister for Finance aware of an article that appeared on Monday, 24 November in the Australian Financial Review indicating that some of Australia's largest companies are considering the extensive restructuring of their overseas interests as a direct result of the foreign tax credits system introduced by the Government in June this year? Will the Minister explain whether the desired effect of the legislation was to discourage Australian businesses from repatriating their dividends to Australia and for these same businesses to float their off-shore operations? Can the Minister assure Australian businesses that the Government will not introduce complementary legislation to the foreign tax credit system which would tax the earnings of off-shore subsidiaries, regardless of whether or not those earnings were repatriated?

Senator WALSH —I have not seen the article in question; so I am, therefore, at somewhat of a disadvantage. In general, the objective of the foreign tax credit system component of the tax reform package is consistent with that of the whole package, that is, to make the tax system more neutral than it previously was. Not having seen the original article, I will have to take the rest of the question on notice and seek a response from the Treasurer.