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Tuesday, 16 February 1971

Senator GEORGES asked the Minister representing the Treasurer, upon notice:

(1)   What has been the number of (a) petroleum and (b) mining companies whose shareholders have been entitled to the benefits provided in the Income Tax Assessment Act designed to induce investment in companies formed with the intention of undertaking petroleum and mining exploration and development for (i) 1969-70 and (ii) the period since provisions of this type first came into operation.

(2)   How many of the companies in the above categories and during the said periods had their initial share issue oversubscribed.

(3)   How many of the above companies had the opening stock market price exceed the share issue price and by what maximum and average percentage.

(4)   If the information sought in (2) and (3) above is not available will the Treasurer please obtain it as part of a study to assess whether such tax deductions are necessary to induce the necessary investment.

Senator Sir KENNETH ANDERSON - The Treasurer has provided the following answer to the honourable senior's question:

(1)   Special taxation concessions have been available in respect of moneys paid on shares in petroleum exploration and mining companies since 1959 and in respect of general mining companies since 1962. The Commissioner of Taxation advises that the number of companies whose shareholders have been entitled to these taxation concessions Is as follows:

These figures do not include those companies whose shareholders have been entitled to a deduction in respect of one-third of the calls paid on shares in mining companies, as details are not available in these cases.

For the 1969/70 income year, information is not yet available, lt should be noted that, as from 1 July 1969. the concession in respect of moneys paid on shares does not. distinguish between petroleum mining and general mining companies; as a result, separate statistics for petroleum and general mining companies will not become available.

(2)   and (3) This information is not available.

(4)   The lengthy inquiries needed to obtain the information sought would, in my view, not be justified. The taxation concessions have undoubtedly encouraged investment in mining companies but there are a number of other factors which influence the market price nf particular shares and the success or otherwise of particular share issues.

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