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Friday, 28 June 1996
Page: 2574

Senator KERNOT (Leader of the Australian Democrats)(2.52 p.m.) —It is so interesting how letters addressed to me always end up, something like two minutes later, in the hands of this government. We saw that in the case of British Telecom. There is never a `cc' on the bottom: `PS I'm sending this to my friends in government'—never. It is just so interesting the way some members of the business community in this country operate—so ethically, I must say. What this letter says, Senator Short—through you, Mr Chairman, is `under the Act as it currently stands.' I am happy to table this letter if it assists.

Senator Cook —Incorporate it.

Senator KERNOT —I am happy to incorporate this letter. I seek leave to incorporate this letter. I think it is instructive.

Leave granted.

The letter read as follows—

Business Council of Australia

28 June 1996

Senator C. Kernot

Leader of the Australian Democrats

The Senate

Parliament House


Dear Senator Kernot

Re: Amendments to the Transfer of Benefits Provisions of the Development Allowance Authority Act

I wish to bring to your attention the Business Council's concerns that quite a number of important projects would loose their entitlements to the Development Allowance under the Act as it currently stands.

The Business Council understands that potential investment of $2.5 billion over the period from now to 2002 is at risk. We also understand that the revenue effect of removing the restriction on transfer benefits so as to allow these projects to remain eligible for the allowance is approximately $90 million to the period 2002.

It is important to recognise that the development allowance is not a concession in any real sense as it was enacted in recognition of tax biases which discriminate against major investments. In the absence of comprehensive tax reform which gave proper recognition to flow-through of deductions and losses and right-off periods for capital expenditure, it would be both inequitable and detrimental to the economy to curtail or limit the benefits of the development allowance.

The Business Council respectfully requests that you do not oppose the amendments to the Transfer of Benefits Provisions of the Development Allowance Authority Act.

Yours sincerely

Robert K.H. Lim

Director, Policy Analysis and Research

Signed in his absence

Senator KERNOT —I would like to take the opportunity to ask the minister a question, because he avoided answering us last time we had this debate. It is all about whether it is appropriate to take this action or not. Minister, when you were in opposition—

Senator Calvert —You didn't support us then, either.

Senator KERNOT —Yes, we did. I am about to tell you. You cannot rewrite this little piece of history, Senator Calvert. Minister, would you please answer this question: when you were sitting over here in opposition, isn't it true that your party amended the airports privatisation bill to include the reopening of the east-west runway? Is that true?