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Tuesday, 10 December 2002
Page: 7570

Senator KIRK (4:24 PM) —On behalf of the Joint Standing Committee on Treaties, I present the 50th report entitled Treaties tabled 15 October 2002, together with the Hansard record of proceedings and minutes of proceedings and seek leave to move a motion in relation to the report.

Leave granted.

Senator KIRK —I move:

That the Senate take note of the report.

I seek leave to incorporate my tabling statement in Hansard.

Leave granted.

The statement read as follows

The report contains the results of an inquiry conducted by the Joint Standing Committee on Treaties into three treaty actions tabled in the Parliament on 15 October, concerning double taxation, medical treatment for temporary visitors, and research, development and training relating to nuclear science and technology.

The first treaty considered by the Committee was:

· An Amendment to the double taxation agreement between Australia and Vietnam:

Mr President

This treaty proposal, in the form of an Exchange of Letters, arose because of changes Vietnam has made to its domestic laws regarding foreign investment. Vietnam has sought Australia's agreement that the relevant tax incentives will remain substantively the same as those previously agreed between the two countries. In effect, the treaty ensures that tax sparing arrangements previously agreed to in the double taxation agreement continue until 30 June 2003, when they will expire permanently.

Tax sparing is an arrangement where tax foregone by a foreign country on the income of an Australian resident is deemed to have been paid. Thus the tax foregone is credited as if it were actually paid. The Committee has considered such arrangements in past reports, most recently in Report 48, where tax sparing arrangements with Malaysia were considered and the Committee agreed that they be extended to 30 June 2003.

Tax sparing arrangements are targeted to foster genuine economic development and relate to active business income, for example, the construction of power production infrastructure, the development of ports to facilitate export processing, the expansion of heavy industry and the plantation of new forests for commercial exploitation.

The Committee has had ongoing concerns about the manner in which information on double taxation agreements, including tax sparing arrangements, is provided by the Department of the Treasury, and has sought to ensure that such agreements are in fact in the national interest. The Committee was concerned that the OECD has reservations about tax sparing policies in general. The Committee was also advised that these arrangements are no longer preferred government policy, however, the Committee agrees with Treasury that the Australian Government ought to honour its commitments to tax sparing arrangements with Vietnam until the previously agreed date. The proposed Exchange of Letters accomplishes this objective by recognising changes in Vietnamese domestic law, thus providing security for Australian investors in Vietnam. The Committee also accepts that this is conducive to continuing the strong bilateral relations between the two countries.

The Committee acknowledges Treasury's continuing efforts to provide specific details in National Interest Analyses relating to double taxation agreements and is looking forward to receiving information from the Department on the historical costs and benefits of such treaties when similar amendments or extensions are considered.

Mr President

The second treaty action considered in this report is:

· An amendment to the agreement between Australia and Ireland on medical treatment for temporary visitors.

This bilateral Reciprocal Health Care Agreement enables visiting residents of one country to access the public health system of the other, to obtain any treatment that is immediately necessary prior to travelling home. This particular agreement covers public hospital and pharmaceutical care.

Reciprocal Health Care Agreements are of particular assistance to persons who are fit to travel overseas, but are unable to obtain insurance. This could be because, for example, they are over 70 years of age, or have a pre-existing medical condition. Australia has RHCAs with New Zealand, Italy, Malta, Sweden, the Netherlands, Finland, the United Kingdom and the Republic of Ireland. These countries have health systems of an equivalent standard to Australia.

Until the introduction of the National Health Amendment (Improved Monitoring of Entitlements to Pharmaceutical Benefits) Act, access to PBS benefits was automatic upon presentation of a valid prescription. The Act now requires people to produce evidence of their entitlement to PBS benefits. For Australians, this would be a Medicare card. The amendment to this agreement introduces a requirement that Irish visitors requesting access to the PBS produce a passport to access the PBS entitlements, thus bringing the treaty into line with Australian law.

The third and final agreement considered in this report is:

· An extension to the Regional Cooperative Agreement for research, development and training related to nuclear science and technology

Mr President

The Committee understands that the Regional Cooperative Agreement, the RCA, is an important mechanism in fulfilling the technical co-operation provisions of the Nuclear Non-Proliferation Treaty. Continued membership of the 1987 RCA is therefore one way for Australia to meet its obligations to co-operate with other parties in the peaceful uses of nuclear energy under that treaty.

The Committee was advised that the non-proliferation treaty is the centrepiece of the non-proliferation regime which, for over a quarter of a century, has helped maintain Australia's immediate strategic environment free from nuclear weapons.

As a party to the NPT, Australia has made a commitment to facilitate the exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy.

The 1987 RCA also allows Australia to participate in international collaborative projects and to maintain and extend a national capacity in cutting-edge nuclear technologies. The Committee understands that the cooperation program covers six broad thematic sectors: health, environment, industry, radiation protection, agriculture and energy.

The Committee was advised that Australia is leading half of the projects in the health care sector, especially for the training of medical technicians, medical graduates in oncology and in medical physics. The Committee was advised that there is a critical shortage in the Asia-Pacific region of medical physicists, who are essential to ensure that optimum performance is obtained from equipment that represents considerable investment by the countries involved.

The RCA program has matured over the years since its inception, from capacity building into applications that assist in addressing and providing solutions to environmentally sustainable development programs and challenges of collective importance.

The Committee concurs with evidence it received that Australia has been playing a lead role in developing management strategies to enable RCA Member States to take on more responsibility for the development and implementation of the program. Also, the Committee agrees that the extensive networking that occurs between the counterpart agencies engenders a cooperative atmosphere that assists mutual understanding and facilitates regional contact across a wide range of science and technologies.

Mr President

It is the view of the Committee that it is in the interest of Australia for the treaties considered in Report 50 to be ratified and the Committee has made its recommendations accordingly.

I commend the report to the Senate.

Question agreed to.