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Monday, 24 May 1965

Senator WRIGHT (Tasmania) .- The way now being cleared for an orderly debate, I want to bring the Committee's mind back to what the Minister has told us. He said that 5 per cent, of voting rights is one of the criteria for a prescribed interest. Let me relate that to proposed section 92. If anyone has a prescribed interest in three or more licences he is guilty of an offence punishable by a penalty of £1,000 and a daily continuing penalty of £100. Let us consider the 5 per cent, limit. Is this the Parliament's indication of a monopoly control or, if you like, a control against the public interest, in a third company? What of it? That may be quite valid in respect of metropolitan and some country companies, but I believe that before ten years have passed 80 per cent, of the country television companies will be seeking capital and the great patriarch of the district, who will endow a university and who will be appealed to in the spirit of our erstwhile colleague, Senator Vincent, to induce a little drama, a little history, a little literature and a little education into television programmes, will then want the Goulburn station, the Ballarat station and other provincial stations to make his business pay. Of course he will. When we get proper licensees - it is the job of the Australian Broadcasting Control Board to sort out proper licensees - we will want them to take interests in ten television companies and maintain a network which will show programmes of a proper standard.

What rabid nonsense is this talk of 5 per cent, control. To whom did the idea occur? On this Tuesday morning I appeal, perhaps in vain, to the clarity of the income tax legislation to remove the thicket surrounding the Bill now before us relating to television. It will be remembered that in the income tax legislation the legislature put forward a criterion for the continuity of a company whose losses entitle it to inclusion in the seven year bracket of losses for income tax deduction purposes. In the past, it was deemed fit to say that if you maintained a beneficial interest in shares carrying 15 per cent, of voting rights, that was all right. But this Government increased its information, if not its wisdom, last November and wrote in other criteria. Those were, first, the right to exercise not less than 40 per cent, of voting power; secondly, the right to at least 40 per cent, of the dividends of the company; thirdly, in the event of the company being wound up, a right to 40 per cent, of any distributions of capital; and fourthly, in the event of a reduction of capital of the company, a right to 40 per cent, of any distributions by way of capital.

When that legislation was harrowed through the Parliament no-one bothered to consider it. But that was the thinking of the Government of the day as to the proper criteria for the continuity of companies for the purposes of entitling them to deduct losses from income tax. What is wrong with that point of view when we are considering control? That is what we are considering when we have in mind the validity of deduction of losses for income tax purposes. Why do we not do that instead of spinning this cobweb of what we call prescribed interest, for which there is no precedent in any statute of any English speaking Parliament?

If we are not to go through the company structure with some pretence of trying to ascertain the rights, the voting power, the dividends, the distributions on winding up and the distributions of capital on the reduction of capital, why do we not prescribe the form of articles which must be adopted by every applicant company? The articles would set out the rights of any shareholder in the company. Who will say that any shareholder who has more than a 5 per cent, interest in any company, especially a metropolitan company, is the big bad wolf whose monopoly control should be excised after he has taken a larger interest than that in two companies?

I realise that the matter is most difficult for the Minister as well as for ourselves. I speak in this vein only because I think that the Parliament is a place where, at least at the present time, we should not abandon our right to criticism, because our criticism will develop opinion here and elsewhere. When the High Court finally decides that the whole of this apparatus is unconstitutional, which I think is probable, the legislation will come back to us again and these submissions might then be borne in mind. That is all I wish to say about this clause.

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