Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I am rising to respond to the issues that were raised by Senator Muir. The government will not support the amendments proposed by Senator Muir on behalf of the Australian Motoring Enthusiast Party in relation to either the reporting of information about corporate tax entities or the so-called grandfathering arrangements. The government is committed to tax transparency, but it does not believe these proposed amendments contribute to a fairer or more transparent tax system beyond what the government already supports.

The existing measures which the government has in place, in addition to the action being taken by the government currently around disclosure, achieve the right balance for disclosure and transparency. The proposed amendments from the Australian Motoring Enthusiast Party in relation to reporting of information about corporate tax entities inserts a definition of 'private companies' based on a definition of large proprietary companies in the Corporations Act. This adds further complexity to the rules around disclosure that do not further the purpose of the transparency rules. As such, the government does not believe these proposed amendments are necessary and therefore shall not be supporting that particular set of amendments.

The government also does not support the amendments proposed in relation to the so-called grandfathering arrangements. This government does not support the removing of grandfathering of proprietary companies, which has been in place for decades. The grandfathering of these entities was a policy that had bipartisan support for decades because without it the new disclosure rules at the time could potentially disrupt commercial activities. The grandfathering of exempted proprietary companies was done to avoid disrupting businesses which would have established themselves under other business forms if they had known they would have additional compliance and reporting requirements which might be subsequently introduced.

The removal of the exemption for large exempt proprietary companies was considered in 2001 by the Parliamentary Joint Statutory Committee on Corporations and Securities and again in 2006 by the Parliamentary Secretary to the Treasurer. The government does not support amending these rules on the fly as part of this critical piece of tax integrity legislation. This issue has been extensively considered in the past and decisions made to keep the current arrangements in place. The government therefore does not support this amendment either.