Notice given 11 July 2002

450  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—

(1) Is it a fact that loans to investors in the Active Cattle project were found by the Federal Court never to have been made.

(2) Is the Australian Taxation Office (ATO) now a shareholder in Active Cattle on the basis that tax has nevertheless been levied on the loan amounts as income in the hands of the project manager, and could not be paid.

(3) Is the ATO still the largest creditor of the Australian Tea Tree Oil Research Institute, even though the Federal Court found in the Phai See case that the Australian Research and Development Board had wrongly decided that the institute did not qualify as a research institute, and hence it was actually entitled to tax exempt status.

451  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—

(1) Is it the case that it was possible up until 30 June 2002 to invest in an existing infrastructure bond, relinquished by another investor, through the Commonwealth Bank of Australia (CBA) or Westpac.

(2) Did that investment, by offering a large loan, potentially allow an upfront tax deduction such that the cash amount contributed was exceeded by the tax refund and hence would confer a tax benefit.

(3) Was that loan non-recourse, and for a term of as little as one year.

(4) Did the loan which could be taken out actually include an amount to be paid tax free to the investor as interest on the loan at the end of 12 months.

(5) Is it the case that the Economics References Committee inquiry into mass-marketed tax effective schemes was told by First Assistant Commissioner, Mr Peter Smith, that some of these infrastructure borrowings could fall under Part IVA of the Income Tax Assessment Act.

(6) Has any action been taken by the Australian Taxation Office to investigate whether Part IVA applies to the infrastructure bonds offered in 2002 to investors by the CBA and Westpac.