Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I cannot respond—indeed, I legally cannot respond—on behalf of the tax commissioner. The tax commissioner is totally independent. As you know, Senator Milne, the question that you have posed is one that is appropriately directed to the tax commissioner himself. I can in no way direct or get involved in the decisions of the tax commissioner and the exercise of his discretions with respect to MIS projects.

I will make a couple of quick points. It is not correct to say that all MIS schemes have failed in forestry. Perhaps with some irony I could highlight that Gunns managed investment schemes in forestry plantations have not failed. You may wish it somewhat differently, but that is an example of one that has not failed, and it is with some irony that I make that point. There is no doubt that there have been a number of failures. Managed investment schemes are supervised by ASIC, and I think you are aware of that, Senator Milne.

The other point I would make is: I certainly have some concerns about the operation of some of these managed investment schemes. From what I have seen I do have concerns about the supervisory aspects, the auditing and the oversight of these schemes—not by ASIC or the ATO but by the responsible entities which, in law, are required to oversight the schemes they are operating. I do have some concerns, and indeed ASIC has indicated concerns and it has put out a discussion paper around improving the supervision of these entities. I accept there are some valid concerns.

However, there are a range of financial and economic circumstances which, to be fair to at least some of these schemes, were not anticipated. Those circumstances include: the financial crisis, the increase in borrowing costs, the increase in the value of the Australian dollar, the world recession—which thankfully we did not have in Australia, but the markets into which many of these products are going have been hit hard by the world recession. There are a range of other financial and economic issues that have contributed to at least some of the failures, but, as I said earlier, there are valid concerns. Each concern that has been raised is under very close examination by a number of government ministers. But in terms of the commissioner’s discretion, it is an answer I am not able to provide, because I am legally not allowed to do so. The tax commissioner is arms-length; he is independent. You will have the opportunity—I am not giving this a flick; this is the legal situation I am in—to challenge and question the tax commissioner at estimates, for example, on this issue.

Question put:

That the amendment (Senator Milne’s) be agreed to.