Patrick Secker (Barker, Liberal Party) Share this | Hansard source

I rise to speak on the report of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into aspects of agribusiness managed investment schemes. This is something I am quite interested in. Some of the comments I make might not be liked by the member for Newcastle, who is a member of the committee, but I believe the committee really squibbed on this whole issue of MISs. I say that because they made no real decision on whether they think MISs should be there or not and whether they should be just for non-forestry or whether they should be over the whole agricultural area. It has been accepted that MISs are okay in forestry on the basis that it is often 15 years or even longer before you get a harvest, and that sort of long-term investment needs some sort of encouragement. I have seen various schemes over the years. I remember South Australian Perpetual Forests had one that you invested in and you did not pay tax on the income. That changed many, many years ago.

When it comes to MISs there is a lot of controversy on the different industries that they apply to, although probably less so with regard to the forestry industry. In my electorate, many people in the olive industry have actually welcomed MISs, on the basis that they needed to get a critical mass to make it a viable industry. Some might say that they do not need it anymore. How then does a government decide whether it is time to turn off MISs for one particular industry? It is very hard for a government to say that one industry should get MISs and another industry should not. Both the previous coalition government and this government have made the distinction between non-forestry and forestry.

Another industry which has welcomed MISs is the almond industry, again to get that critical mass. But of course the grape industry absolutely hates them. About eight per cent of the industry is MISs. Some MISs actually run a good operation where they have the latest irrigation technologies. Others have just bought run-down set-ups and really have not put the money into fixing them up. Others have gone out there and planted a whole lot more vines. In a new part of the Barossa, a big vineyard has been put in right at the death knell of MISs. When we were in government, we said that they should have ended on 30 June last year. Of course, the problem is that we have had a court case in the meantime that overturned our government’s decision and made it less certain where we are.

I will very quickly talk about recommendation 1, which I have a real problem with. If you brought in recommendation 1, you would not get any investment in MISs. No-one is going to invest in something now and wait 15 years before they are able to write off those costs. It just would not work. I note that the committee said that the government should only look at it but, frankly, it just would not work. If you wanted to get rid of MISs, that would be a perfect way of doing it: saying that you could not take a deduction before there was any income from that particular MIS.

I do not have a real problem with the second one. I cannot say I am an expert on the Corporations Act. It probably seems reasonable they have made that recommendation. I would fully support the third recommendation. I think that, any way that we can ensure that we have as close to perfect information for the consumer or the investor, the better off we are. I am very disappointed that there are only three recommendations. No. 1 will not work, No. 2 probably will and No. 3 is a recommendation I support. I just wonder why they did not come out with a strong message of whether they believe that MISs should be part of our taxation system or not.

See this speech in context