Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the minister representing the Treasurer. Minister, I draw your attention to the UK government’s recent announcement of an inquiry into the loss of tax revenue caused by high-debt private equity buyouts. Minister, given that Australian taxpayers will lose more than $1 billion in revenue as a result of the Qantas takeover, will the Australian government also investigate the massive tax losses from such deals?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I will seek further information from the Treasurer specifically on that subject, but my recollection is that I observed in the media that inquiry by the British government and our Treasurer responding in the media by noting that he had also observed that inquiry and asking Australian Treasury officials to monitor the conduct and outcome of the British investigation of the matter. As I said in the last Senate session, obviously the phenomenon of private equity deals of this kind, while not new, has certainly grown in volume and does present certain challenges for policymakers around the country in getting the balance right in terms of observing the proprieties of a free market and minimal intervention but at the same time ensuring that we do understand the consequences of the potential for growth in such activity and its effects on the commercial and financial marketplace. I think I acknowledged in the previous Senate session that the tax implications are something that policymakers around the world will have to increasingly take account of when considering this matter. In that sense, we welcome the British initiative. As I said, my understanding is that the Australian Treasurer has directed our officials to monitor that and report to him on the outcome of the British inquiry. I will endeavour to find further information for Senator Fielding from the Treasurer on the matter.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I thank the minister for his answer to the first part of my question. Minister, with private equity sharks encircling major Australian companies like the Coles group and Qantas, and given the importance of tax revenue to Australia, why has the government agreed to tax treaties which limit our tax take on money going overseas to just 10 per cent?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I will take the latter part of that question on notice because I do not have that information to hand. I say to Senator Fielding that to describe the many and varied professional people involved in private equity as ‘sharks’ is wrong and is not appropriate language for a senator or for this place. No doubt in any field of endeavour there are those with good and bad motives or good and bad behaviour, but to describe a whole field of professional endeavour in that way is wrong. Private equity does have its place in the commercial market. There are many instances where the knowledge by management and shareholders of the existence of the opportunity for private equity businesses to purchase shares is a force for good. It must always be the case prima facie that shareholders are free to sell their shares, which are their property, to whomsoever they like, subject to reasonable regulation of that matter. I am happy to follow up on the latter part of the question but I would ask Senator Fielding to be more reasonable and balanced in his language. (Time expired)