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Monday, 14 March 2005
Page: 30

Senator CARR (2:34 PM) —My question without notice is to Senator Minchin as Minister for Finance and Administration and Minister representing the Treasurer. I refer the minister to his press release of 18 February this year in relation to the taxation liabilities of the Beaudesert Rail Association, which stated:

There were discussions between the Railway, the liquidator and the Tax Office about whether that grant was taxable. Once it was explained that the recipient was a not-for-profit organisation, it was clear that there was no tax liability at all.

Is the minister aware of the correspondence from Beaudesert Rail’s accountants, Gillow and Teese, which states that the Australian Taxation Office has determined that Beaudesert Rail is not an exempt organisation for the purposes of income and capital gains tax? Minister, why did you misrepresent the facts associated with the taxation status of Beaudesert Rail?

Senator MINCHIN (Minister for Finance and Administration) —There was no misrepresentation involved. The advice to me was that there was no tax liability incurred. Therefore, to the extent that I or my parliamentary secretary get involved in these things, in relation to act of grace payments there was no involvement whatsoever, because the act of grace payment mechanism only comes into play if indeed there is a liability for which a waiver is sought. There was no liability incurred and no waiver sought, so my statement was absolutely correct and there was no misrepresentation.

Senator CARR —Mr President, I ask a supplementary question. Again I would refer the minister to the correspondence from the chartered accountants Gillow and Teese which states that the ATO had decided that the grant to Beaudesert would not be assessable for taxation purposes since operations had not commenced when the grant was received. Can the minister confirm that any organisation that has not commenced operations is not liable to pay tax on any grant received? If not, can the minister explain why it is that Beaudesert received special treatment?

Senator MINCHIN (Minister for Finance and Administration) —I am not going to make a general statement. All I will do is repeat the fact that in the case of the grant to Beaudesert Rail there was no tax liability incurred and therefore no question of a waiver for tax liability arose.