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Tuesday, 5 May 1987
Page: 2356
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Senator Walsh —On 19 February 1987 (Hansard, page 267) Senator Powell asked me, as Minister representing the Treasurer, a question without notice concerning overseas debt. The Treasurer has provided the following information in answer to the honourable senator's question:

There are no statistics available which provide a breakdown of the corporate sector's external debt according to the purpose for which it is used.

The method of financing takeovers and the sourcing of loans, whether in Australia or overseas, are essentially commercial decisions and beyond effective direct Government control. Insofar as loans for takeovers are genuine business expenses, the associated interest charges are legitimately deductible for taxation purposes. Any measures designed to restrict the tax deductibility of interest expenses associated with takeovers, whether limited to interest on loans sourced overseas or on loans for takeovers generally, in an effort to curb takeover activity would have no sound basis in taxation principle. Moreover, it is likely that they would often be easily circumvented in practice and that they could do serious damage to the operation of equity markets.

To the extent that the present taxation system provides an incentive for companies to use debt in preference to equity financing generally (and not just for takeovers), any such bias should be substantially reduced by the introduction of a full imputation system of company taxation in July 1987. This system will ensure that company income, net of associated deductions, distributed to the individual resident shareholders of companies will bear one layer of tax, generally at the shareholder's rate of tax, irrespective of the deductions claimed at the company level.

Some illustrations of the tax revenue implications of share acquisition are presented in Attachment A of Treasury Economic Paper Number 12, `Some Economic Implications of Takeovers'. I have arranged for a copy of this Paper to be sent to the honourable senator.

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Senator Walsh —On 20 February 1987 (Hansard, page 383), Senator Sanders asked me a question without notice in my capacity as Minister representing the Minister for Primary Industry. His question concerned a number of issues regarding the orange roughy fishery. I have received further advice concerning both the questions on fish quality, and the reasons for setting the initial catch limit at 20,000 tonnes per annum. The Minister for Primary Industry has supplied me with the following additional information:

Initially, when large aggregations of this fish were discovered, there were problems of spoilage due to the large quantity of fish being taken. At that stage neither the fishermen nor processors had adequate systems for storing and processing of the volumes involved. However, processors quickly informed fishermen that they could not handle the catch and this resulted in a more rational approach with a resultant reduction in spoilage.

To date in 1987, up to 25 containers of orange roughy fillets have been exported to the USA from Tasmania, Victoria and New South Wales. The greater proportion being exported through the port of Sydney. Each container carries between 10 and 20 tonnes and this gives the total export of around 300 tonnes.

As indicated by Senator Walsh the Department of Primary Industry has not, in investigations to date, found substance in reports that United States authorities have rejected shipments of Australian orange roughy as unfit for human consumption. Investigations are, however, continuing.

Prior to setting the catch limit at 20,000 tonnes per annum I considered a report from the South Eastern Trawl Management Advisory Committee and its scientific committee. The scientific committee is composed of representatives from the four States involved as well as scientists from the CSIRO and the Department of Primary Industry. They considered a preliminary report from the Chief of the CSIRO Division of Fisheries Research who had personally assessed the fishing grounds adjacent to Sandy Cape off the north west of Tasmania. They also considered information available from New Zealand where a very valuable orange roughy fishery has been developed over the last 6 to 7 years.

The scientists concluded that there are no biological reasons for a closure of the Sandy Cape or other fishing grounds. They also pointed out that although there appears to be a very large biomass of orange roughy in the area off Sandy Cape, the long term sustainable yield may be no more than 5,000 to 10,000 tonnes per annum for this particular area of the fishery.

The Management Committee accepted the scientific advice but considered it prudent to immediately evaluate the longer term management options. Although there was no agreement on the need for action at this time, many considered that industry required advice as to the maximum claim current licence holders would have on the orange roughy resource. This would allow industry to undertake investment in plant and equipment in a more secure environment and it would also discourage speculation that unlimited supplies of orange roughy are available to current licence holders.

Taking into account the advice from the scientists and the fact that a number of other areas besides the area off Sandy Cape, contain aggregations of orange roughy, the Government decided that a safe catch level at this time is 20,000 tonnes per annum for the whole south eastern trawl fishery.

If the resource can sustain higher annual catches, the Government will need to decide how to allocate the surplus. New Zealand has established annual catch quotas for orange roughy at about 55,000 tonnes and is auctioning the surplus of this and other fish resources for the benefit of the wider community.

The CSIRO and the State scientists will be conducting further research and Senator Sanders may be assured that management arrangements will be adjusted from time to time on the basis of the best scientific advice available.

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Senator Walsh —On 24 February 1987 (Hansard, page 493), Senator Watson asked me a question without notice in my capacity as Minister representing the Minister for Primary Industry. His question concerned the orange roughy fishing quota. The Minister for Primary Industry has supplied me with the following additional information:

Prior to setting the catch limit at 20,000 tonnes per annum I considered a report from the South Eastern Trawl Management Advisory Committee and its scientific committee. The scientific committee is composed of representatives from the four States involved as well as scientists from the CSIRO and the Department of Primary Industry. They considered a preliminary report from the Chief of the CSIRO Division of Fisheries Research who had personally assessed the fishing grounds adjacent to Sandy Cape off the north west of Tasmania. They also considered information available from New Zealand where a very valuable orange roughy fishery has been developed over the last 6 to 7 years.

The scientists concluded that there are no biological reasons for a closure of the Sandy Cape or other fishing grounds. They also pointed out that although there appears to be a very large biomass of orange roughy in the area off Sandy Cape, the long term sustainable yield may be no more than 5,000 to 10,000 tonnes per annum for this particular area of the fishery.

The Management Committee accepted the scientific advice but considered it prudent to immediately evaluate the longer term management options. Although there was no agreement on the need for action at this time, many considered that industry required advice as to the maximum claim current licence holders would have on the orange roughy resource. This would allow industry to undertake investment in plant and equipment in a more secure environment and it would also discourage speculation that unlimited supplies of orange roughy are available to current licence holders.

Taking into account the advice from the scientists and the fact that a number of other areas besides the area off Sandy Cape, contain aggregations of orange roughy, the Government decided that a safe catch level at this time is 20,000 tonnes per annum for the whole south eastern trawl fishery.

If the resource can sustain higher annual catches, the Government will need to decide how to allocate the surplus. New Zealand has established annual catch quotas for orange roughy at about 55,000 tonnes and is auctioning the surplus of this and other fish resources for the benefit of the wider community.

The CSIRO and the State scientists will be conducting further research and Senator Watson may be assured that management arrangements will be adjusted from time to time on the basis of the best scientific advice available.

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