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Wednesday, 13 May 1981
Page: 2320

Mr SPENDER(5.13) —Let me say, since I have been invited to do so, that from this side of the Committee I do not think we would say that one forecloses the question of the introduction of provisions concerning trading trusts. As I understand the position, the matter is under examination. Some very complex questions are raised by the disclosure provisions originally included, and I will put one of those to the Committee. We can have a trust company whose task it is simply to administer trusts. That is a perfectly legitimate exercise. Let us assume in favour of the trust company I am talking about that there is no tax avoidance, no tax evasion, and that it is a perfectly straightforward exercise. One of the problems it then faces when it deals in the open market, for example when buying shares on behalf of a number of different trusts, is the complexity of saying on each occasion: 'We will buy 200 shares for Trust Y, 200 shares for Trust Z, 200 shares for the next trust', and so on. The imposition of the disclosure requirements could be highly technical and not easy to comply with, and I speak of the requirements as they appeared in the April exposure.

Honourable members have referred to the use of trusts for tax avoidance purposes. Certainly that takes place, there is no doubt about that, and there is no doubt that companies acting as trustees are sometimes used for the purposes of tax avoidance. But that does not say that we should introduce legislation which may pose many more problems than it cures. I put it to the honourable member for Hawker (Mr Jacobi) that, after all, he is not looking at a novel situation. Trusts have been around for a long time, and if we move companies to one side, as it were, and provide that there shall be, as he has said, the lifting of the corporate veil in all cases, then the true tax avoiders will simply find another means of going about it, which I assume would be to have an ordinary trust without a company holding the position of trustee. I certainly agree that it is a matter that is worthwhile looking at, and it should be looked at further, but I have reservations about the provisions as they originally existed in the April exposure draft.