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Thursday, 11 March 1999
Page: 2755

Senator HOGG —My question is addressed to the Assistant Treasurer, Senator Kemp. I refer the minister to the remarks made by Mr Ken Crooke of the Queensland National Party and his statement that there seemed to be a lack of understanding within government about the importance of the trust system in rural Australia. Does the minister agree with Mr Crooke's observation? Given that farmers insist that they commonly use the trust system to ensure the transfer of the family farm to their children rather than for tax avoidance, will the government be exempting farm family trusts from the entity taxation proposals as it has with cash management and other forms of trusts?

Senator KEMP (Assistant Treasurer) —Thank you, Madam President.

Senator Conroy —You should have asked that, Bill.

The PRESIDENT —Senator Conroy, stop shouting. You have been doing it throughout question time.

Senator KEMP —One of the issues that the coalition went to the election on was concerned with the taxation of trusts and equally my understanding was that it was a policy that was picked up by the Labor Party. I understand that that is probably still the Labor Party's problem. We announced that this issue would be examined within the context of the Ralph review. The Ralph report was issued on 22 February. At the time of the release, the Treasurer announced that cash management trusts would be subject to flow through taxation under the new business tax entity regime. This would ensure there were no adverse cash flow benefits for individuals receiving distributions of assessable income from cash management trusts.

The PRESIDENT —It is almost impossible for me to hear what Senator Kemp is saying because of the level of noise on my left. I would ask senators who are speaking to do so more quietly, if they must.

Senator KEMP —If Mr Crooke wants to put any views to the Ralph committee, he is perfectly entitled to do so.

Senator HOGG —Madam President, I ask a supplementary question. In attempting to answer my question you failed to answer it. I asked: will the government be exempting farm family trusts from the entity taxation proposals, as they have for cash management and other forms of trusts? You failed to answer that part of the question. Is the minister further aware that Queensland National Party officials have branded proposals to change the way family trusts are treated under the taxation system as unacceptable? Does the minister believe that the taxation of farm family trusts is unacceptable and the Queensland National Party officials have simply got it wrong and that they should support the taxation of farm family trusts?

Senator Conroy interjecting

The PRESIDENT —Senator Conroy, I have spoken to you before during this question time.

Senator KEMP (Assistant Treasurer) —The National Party people you have purportedly quoted—and I do not know whether you have quoted them correctly or not; it would surprise me if you read out a correct quotation, Senator—are entitled to put their views. As I said, the issue of trusts is one of the issues which is before the Ralph committee. If people wish to put views to that committee, they certainly can.