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Thursday, 1 June 1989
Page: 3284

Senator HAINES (Leader of the Australian Democrats)(10.10) —by leave-In light of the comments made by the Minister for Finance (Senator Walsh) with regard to an alleged deficiency within the Opposition's amendment and not wanting to take the risk that one of the types of superannuation providers that we are concerned about slips through the exemption net, I now move:

(5) Page 18, clause 9, proposed subsection 296 (1), line 7, leave out ``The trustee'', insert ``Subject to subsection (4), the trustee''.

(6) Page 18, clause 9, after proposed subsection 296 (3), add the following new subsections:

``(4) Subsection (1) does not apply to income of a fund where 90% of the assets of the fund are in interest earning investments.

``(5) Subsection (4) ceases to have effect on 30 June 1999.''.

We have moved three pairs of amendments relating to our exemption attempt. They would have exempted from the earnings tax for a period of 10 years three groups of funds: complying superannuation funds whose assets are 90 per cent invested in interest earning investments; complying approved deposit funds which are 90 per cent invested in interest earning investments; and predominantly interest earning pooled superannuation trusts. We were defeated in a combined vote of the Government and the Liberal and National parties in the first of those amendments. I understand that approved deposit funds are picked up under the Liberal Party amendment which was supposed to be a general exemption. However, I also understand that there is at least a strong belief on the part of the Minister and his advisers that pooled superannuation trusts will not be gathered up under the Liberal Party's amendment to exempt funds from the earnings tax. I would not like the legislation to leave this place and go back to the House of Representatives for consideration without absolutely ensuring that all of the groups of superannuation trusts were covered. It would be better for the Opposition's amendment and our amendment to pass this place, rather than for the Opposition's amendment to go through and our third pair of amendments to be defeated and a significant group of fixed interest funds to be left outside the earnings tax exemption and forced to pay 15 per cent tax with no capacity for a significant imputation offset.

Given that the leading financial lights in the Liberal Party are currently having a discussion and given that I have talked this out for as long as is possible, even for me, to go on repeating the same thing over and over again, I would like to get some indication from the Opposition as to whether it is prepared to support these amendments at least pro tem. We should not kid ourselves; this Bill will come back from the House of Representatives, which is waiting breathlessly to get it tonight. We will probably receive it again on Monday, at which stage we can sort it out. I do not want to risk having the Bill leave this place with over half the Senate concerned about the earnings tax and its effect on a range of people but not covering one significant group. I do not know whether the Opposition wants to report progress so that it can consult its spokesperson in the other place or whether it is prepared to take a punt on this one and see what happens after it has been to the House of Representatives. If the Opposition is serious about removing the earnings tax, I urge it not to leave, however inadvertently, a loophole with regard to pooled superannuation trusts. In order that the Opposition not do that, I ask it to support our amendments 5 and 6 relating to those groups of superannuation trusts.