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Wednesday, 4 December 1985
Page: 2958

Senator WALSH (Minister for Finance)(9.41) —The first proposal would free from stamp duty liability a collateral security executed after the commencement of the amendments, even though it is collateral to a primary security that was executed before the commencement date and so has not borne duty. It is true that the legislation provides that collateral securities are not ordinarily liable to duty but that is on the basis that duty would ordinarily have been paid on the primary security. The aim is to avoid the imposition of double duty, not to free collateral securities from duty regardless of the circumstances. Subjecting collateral securities to duty where the primary security has not been so subject is consistent with the treatment of collateral securities in New South Wales and is the right, proper and intended outcome. In all these Australian Capital Territory charges the intended outcome was to apply either the identical or comparable tax laws of New South Wales in the Territory. Therefore, the Government opposes that amendment.

Amendments (2) to (6) apparently reflect the Law Council of Australia's suggestion that the option to pay duty by a monthly return procedure in the case of corporate debenture issues should provide for a more effective territorial connection and make it clear that a credit is available for duty paid in other jurisdictions. The proposition is of a complex technical nature and the Government has not yet had sufficient time to have the points examined in detail, the Law Council's submission having been made available to officials only last week. In the circumstances, the Government is clearly unable to accept the amendments now under consideration merely on the basis that the Law Council thinks they are a good idea, and the issues raised are not of such significance that the Government could consider not proceeding with the legislation in its present form. Nevertheless, the issues will be examined further and any appropriate action taken.

The purpose of foreshadowed amendment (7) appears to be twofold: First, to ensure that a loan security executed before the legislation comes into operation does not have to be lodged for assessment of stamp duty; second, to ensure that a loan security executed before that date does not attract duty. The Government's view is that the amendment is not necessary. It is only those securities on which stamp duty is imposed that have to be lodged for assessment and the application provision for the Australian Capital Territory Stamp Duty Amendment Bill makes it clear that the only securities on which stamp duty is imposed are those executed on or after the date the Bill becomes law. Therefore, the Government opposes that amendment. In short, the Government is opposed to amendments (1) and (7) and, if I can draw this subtle distinction, it will not support amendments (2) to (6) but gives an undertaking to examine the technical points raised to see whether any subsequent review is justified.