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Tuesday, 11 October 1983
Page: 1536

Mr HOWARD —My question, which is directed to the Minister for Finance, is supplementary to that asked by the honourable member for O'Connor. Is it a fact that the company called Coomel Pty Ltd, in which the honourable gentleman had a beneficial interest, was a shareholder in Metro Industries Ltd at the time of the sale by Metro of a subsidiary called Treamog Pty Ltd? Does this mean that Coomel and, consequent upon its liquidation, its shareholders, which include the Minister, are subject to the provisions of the Taxation (Unpaid Company Tax) Assessment Act, commonly known as the bottom of the harbour legislation passed by this Parliament last year? Will the honourable gentleman's liability under that Act be limited only by the extent of the shareholding of Coomel in Metro Industries and the discretion of the Commissioner of Taxation? Is it not also a fact that the Minister may be in a similar position under the so-called recoupment legislation now before this Parliament? Did he as a Minister declare his potential liability under that legislation to the Prime Minister or the Parliament before voting on it? Finally, do the descriptions used by the Minister and some of his colleagues regarding people affected by the 1982 legislation apply to him and his conduct? If not, why not?

Mr DAWKINS —I am delighted that the Deputy Leader of the Opposition has raised the question of Metro Industries. He will recall that the Chairman of Metro Industries was Denis Byrne Horgan, the chairman of the Liberal Party of Australia's finance committee in Western Australia. It was Denis Byrne Horgan who, whilst he was Chairman of Metro Industries, arranged for the sale of a number of Metro subsidiaries to the well known tax avoidance representatives Brian Maher and John Patrick Donnelly. One does not have to look any further than the McCabe-Lafranchi report to find the evidence for this. Last year the then Liberal Government became particularly concerned about this matter and, as I indicated earlier, appointed Mr von Doussa to report on it. Mr von Doussa, in his report, stated:

In those transactions where there was a taxation advantage Horgan's intention was to avoid paying tax.

The only advantage that Mr Horgan had over every other--

Mr Spender —You are very shaky; you are avoiding the question.

Mr DAWKINS —The honourable member should bide his time. The only advantage that Mr Horgan had over every other shareholder in Metro Industries was that he got rid of his shares when they reached their peak market price. The McCabe- Lafranchi report revealed that six Metro subsidiaries were sold with untaxed current year profits. Treamog Ltd had untaxed profits exceeding $5m. Of course, Mr Horgan did quite well out of those. Having masterminded the sale of the Metro subsidiaries, hundreds of other Metro shareholders were left facing a $4m tax bill as a result of the legislation which was introduced into the Parliament last year by the then Treasurer and now Deputy Leader of the Opposition. The shareholders of that company-those people who hold shares in Metro Industries- are currently receiving assessments because the current controllers of Metro Industries have indicated that they are not prepared to pay the tax assessment that they have received from the Commissioner of Taxation. Hundreds and hundreds of Western Australian shareholders-I think some 1,800 on the last count-have now received tax assessments, yet they do not have the advantage that Mr Horgan had. Mr Horgan, having sold his shares at the time when they were at a peak, managed to cream off a huge profit in respect of his own holdings in that company. That opportunity did not exist for other shareholders. The remaining shareholders in Metro Industries, who now find that their shares have been more than halved in value from the peak at which they were when Mr Horgan bailed out, are now receiving tax assessments under the legislation which was passed by the former Government. As to any prior holdings which the company of which I was a shareholder may have had, I have no idea whether there was at any time-I can certainly say that there is not now--

Mr Howard —Will you let the Taxation Commissioner certify to that as you demanded of John Reid?

Mr SPEAKER —Order! The Deputy Leader of the Opposition will cease interjecting.

Mr DAWKINS —I wish the Deputy Leader of the Opposition would calm down. He had an opportunity last week to get involved in this matter but he declined to do so , as did his leader. As to the question of fact about whether there was ever a holding of shares by that particular company at any particular time, of course I will be happy to find out and let the honourable member know.