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Wednesday, 13 November 1985
Page: 2065

Senator REID —I draw the attention of the Minister representing the Treasurer to an anomaly flowing from the Treasurer's statement of 17 July concerning the Government's intention to abolish negative gearing of rental properties and introduce depreciation. Is the Minister aware that while negative gearing will be allowed on properties purchased before 17 July and the new depreciation allowance will apply to properties constructed after that date, neither advantage will be available for properties which were under construction at that date but had not been sold? Was it the intention of the Government to deliberately exclude builders or other developers in that situation? If so, how can the Government justify penalising people who, through no fault of their own, happened to be in the construction phase at the time of the announcement? If not, will the Government remove the anomaly by allowing one or other of the concessions to apply to these cases?

Senator WALSH —I cannot recall at this distance in time all the details of the Cabinet consideration on that question. Therefore, I am not sure whether Senator Reid's interpretation of or belief about the facts is correct. I am afraid that I really cannot do anything at this stage other than refer it to the Treasurer for a definitive reply.