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Tuesday, 8 October 1985
Page: 774

Senator MICHAEL BAUME —My question is directed to the Minister representing the Treasurer. Is he aware that a tax seminar, at which participants are being provided with papers, lunch and refreshments and at which the Treasurer is to be keynote speaker, is being advertised as tax deductible? Is it correct that if a person attends this seminar and has lunch, that expense will be tax deductible, but if he has lunch, say to discuss business with clients, that expenditure, which is incurred in the earning of income, will not be deductible under the Government's new taxation regime?

Senator WALSH —I am aware of that. Indeed, Mr Keating answered a similar question in the Caucus meeting this very day. He has also made some statements-I am not sure whether they were public statements-about this before. There are obvious, quite severe administrative difficulties in separating the lunch component of a seminar for educational purposes from another. While conceptually Senator Michael Baume may have a point-that is, that the lunch should be treated the same as any other lunch would be-in all taxation matters a balance must be struck between what might be conceptually perfect and what is administratively enforceable at an acceptable administrative cost. We know that the Opposition, when in government, did not believe in enforcing the taxation Act at all. Senator Durack, as I mentioned earlier, stuck a tax dodger's file in the bottom drawer and left it there gathering dust for five years. It is not this Government's intention to do that. The Government believes the taxation laws which it has put in place are enforceable and it will make every effort to enforce them.

On the broader question of the business lunch, I think the recent Press reports regarding the devious means which assorted tax avoidance consultants are suggesting can be used to get round the spirit and letter of the proposed law is an indication of just how phoney the typical business lunch was, that it was not a venue for the conduct of business at all, as Senator Baume naively or cynically suggests, but was a device through which the people who took their lunches to work in brown paper bags, as the Treasurer put it, were forced to pay for the self- indulgences of the sort of people that Senator Baume represents and whose interests he tried to protect.

Senator MICHAEL BAUME —Mr President, I have a supplementary question. Would the Minister now like to answer: Where will the line be drawn in deciding which functions involving meals are deductible and which are not? For example, would a lunch attended by Mr Mick Young, as invited by a member of a public relations organisation, be an acceptable deduction? Would a two-person seminar be accept- able? Would a lunch such as that addressed by the Minister, organised-

Ther PRESIDENT-Order! The honourable senator is entitled to ask a supplementary question, not four or five.

Senator MICHAEL BAUME —They relate to the drawing of a dividing line. It is, with respect, Mr President, really one question asking where the dividing line would be. Would it encompass these various possibilities? The last one I want to raise as a possibility is whether a lunch such as that addressed by the Minister, organised by the Australian Labor Party in Perth earlier this year-

The PRESIDENT —Order! The honourable senator is clearly out of order. I call the Minister for Finance to answer the first supplementary question.

Senator WALSH —I can only endorse your comments about his being out of order, Mr President. He is out of order-

The PRESIDENT —Order! The Chair does not ask for the Minister's endorsement; I ask for an answer to the question.

Senator WALSH —As out of order as he was anxious to be out of Patrick Partners when he reapplied for his dealer's licence on the Sydney Stock Exchange, although he claimed he was not a member of Patrick Partners at the time.

The PRESIDENT —Order! Will the Minister answer the supplementary question?

Senator WALSH —Certainly, Mr President. I will refer this to the Treasurer for confirmation, but such matters as Senator Baume has referred to, as is customary for many provisions of the Taxation Act, will I expect be left to the discretion of the Commissioner of Taxation to determine.