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Thursday, 25 February 1988
Page: 778


Mr BRAITHWAITE(10.33) —I wish to raise matters concerning the attempt of the former Minister for Trade to rig the Spigelman inquiry into pricing arrangements for the export of bauxite and alumina from Gove. When the Minister announced this inquiry in April 1986 he suggested that a transfer pricing arrangement existed between Austraswiss and its Swiss parent. The special investigator appointed was Mr Jim Spigelman, a former Sydney University Labor Club President and a former private secretary to former Prime Minister Gough Whitlam, who was appointed by the Whitlam Government in 1975 to head its infamous Department of the Media.

Mr Spigelman's career provides ample proof that, far from being an independent investigator, he is another of the former Trade Minister's cronies with a demonstrable bias in his area of inquiry. In 1972 he wrote a book entitled Secrecy-Political Censorship in Australia. This book provides undeniable evidence of Mr Spigelman's prejudice about transfer pricing. Chapter 6, entitled `A Farrago of Secrecy and Deception', has a subsection entitled `Foreign Investment'. Spigelman began:

Under Section 136 of the Income Tax Assessment Act the Commissioner of Taxation is empowered to impose special taxation on a foreign-controlled business if he believes that it is earning less taxable income than could be expected. The techniques by which international companies can shift earnings from one jurisdiction to another, such as through intra corporate pricing, are well known. Section 136 is designed to counter such techniques . . .

Section 136 is, of course, the section under which the current Labor Government, in an attempt to recoup revenue allegedly lost by transfer pricing in June 1984, issued tax assessments to Austraswiss for the years 1976 to 1979. The Spigelman inquiry was announced in April 1986 after what Trade Minister Dawkins described as `the Government's frustration, dissatisfaction and lack of confidence in the principal parties involved' in the Gove project. In fact, it followed a vendetta the Minister was waging against Austraswiss in the media at that time. Mr Spigelman's report was intended to be part and parcel of the Government's attempt to press its section 136 vendetta against Austraswiss. Again in 1972, in his book, Spigelman continued:

The Commissioner does not include any information on Section 136 in his annual report to Parliament. When asked for general information he relies on secrecy provisions. The High Court has held that the section imposing an obligation to report to Parliament is in no way qualified by, or subject to, the secrecy provisions. This decision has been ignored. In any case the suspicion that Section 136 is hardly used at all suggests that the failure to give even general aggregate information is designed to hide a vital gap in Australian surveillance of foreign investment in this country.

That appears at pages 109 and 110. That is irrefutable evidence of Mr Spigelman's prejudice about transfer pricing and the use of section 136. Spigelman's appointment as special investigator into exports from Gove must be viewed as a corollary of his and the Whitlam Government's vendetta against multinational mining companies through the use of section 136. In 1975, Spigelman was appointed by Gough Whitlam to the task force to review the continuing expenditure policies of the previous Government. I now quote from Alan Reid's The Whitlam Venture:

On March 28, 1973, Whitlam set up a task force to `apply a close scrutiny to the continuing policies of the previous government so that room may be found for our own higher priority programmes' . . . Rural interests was not represented either through an individual or departmentally. Spigelman, one of Whitlam's secretaries, was, like Whitlam, a lawyer . . .

In 1981, Mr J. J. Spigelman co-authored The Nuclear Barons-the inside story of how they created our nuclear nightmare, a rabid tract which takes a jaundiced view of the nuclear mining industry. I was told of Mr Spigelman's imminent elevation to the ranks of Queens Counsellors prior to this occurring in November last year. In legal circles it was seen as a pay-off for Mr Spigelman's submission of a satisfactory report on transfer pricing with regard to exports from Gove, also due in November, but extended to 1987. Interestingly, a Press release from the then Trade Minister dated 20 January 1987, announcing receipt of the Spigelman report, acknowledges the fact that Mr Spigelman had been made a QC. In short, the former Trade Minister should never have appointed Mr Spigelman and he should be condemned for doing so. I note from Senator Cook's ministerial statement to the Senate last Thursday that the dispute between the Government and Austraswiss has been resolved.


Mr DEPUTY SPEAKER (Mr Ronald Edwards) —Order! The honourable member's time has expired.