Chapter 3
Schedule 1 - Australia as a regional financial centre
Schedule 4 - Franking credit, franking debits and the inter-corporate
dividend rate
Schedule 1 – Australia as a Regional Finance Centre
3.1 Senator Watson raised the issue of trading in gold by Offshore Banking
Units (OBU's) where trading is permitted with a resident but limited to
non-Australian dollars under the amendments.
Government Response
3.2 Mr Walker, Acting Assistant Commissioner, Australian Taxation Office
stated, the purpose of the proposed amendments is to expand the trade
in gold.
—It is, of course, a matter of government policy how far the concessional
OBU regime goes. The trade in gold bullion is to be expanded under this
amendment. Presently, trade in gold bullion is permitted only with offshore
persons where any money payable is not in Australian dollars. After these
amendments, trading in gold bullion with offshore persons will be allowed
in any currency, and trading in gold with those who might be called `onshore'
persons will be restricted to where money is payable in non-Australian
dollars.increase the to the Sales Tax Act was to overcome a deficiency
in the sales tax law that allowed the private sector to buy goods exempt
of sales tax and at substantial cost to government revenue. [1]
3.3 The Committee's attention was drawn to the Citibank's handling of
its global gold trading being transferred out of Australia, and the amendments'
to Schedule 1 creating a possible linkage to this decision
Schedule 4 - Franking credit, franking debits and the inter-corporate
dividend rate
3.4 Mallesons Stephen Jaques in a submission dated 12 March 1999 raised
three broad areas of objection to these provisions of the bill. They note
[2]:
- the amendments are designed to implement a 1997 budget Press Release;
- the amendments were not released until 3 July 1998 - almost 14 months
after the May 1997 Press Release;
- a significant component of the provisions are to apply from 13 May
1997; and
- some of the draft legislation goes well beyond what the 13 May 1997
Press Release had indicated or what any adviser could reasonably foreseen
from the wide terms of the announcement.
Mallisons further suggested the commencement date should be moved to
3 July 1998 from 13 May 1997.
Footnotes
[1] Evidence p. E 16
[2] Submission No. 3, p. 1.