Footnotes

Chapter 2 - Demutualisation of private health insurers

[1]        Better known examples include Colonial Mutual, AMP and St George. See 'Demutualisation in Australia', Reserve Bank of Australia Bulletin, January 1999, pp 1-10.

[2]        Explanatory Memorandum, p. 5.

[3]        The Hon. Chris Bowen, Minister, Competition Policy and Consumer Affairs, Second Reading Speech, 26 June 2008.

[4]        Australian Taxation Office, 'Demutualisation of MBF', http://www.ato.gov.au/individuals/content.asp?doc=/Content/00147168.htm.

[5]        Explanatory Memorandum, p. 5.

 

Chapter 3 - Family trusts

[1]        A family trust is generally established for the benefit of members of a 'family group'. It provides a mechanism to pass family assets to future generations and can ensure that all family members use their income tax 'tax-free thresholds'. The family trust can be the subject of a family trust election which provides it with certain tax advantages, provided that the trust passes the family control test and makes distributions of trust income only to beneficiaries of the trust who are within the 'family group'. Family trusts are typically used by farming families and those running small businesses. One witness described them as 'a legitimate vehicle in which to run business and to hold family assets for all the reasons of asset protection, business succession, family protection of assets in the instance of marriage breakdown and the like. Tax is very much an incidental.'; Mr John Brazzale, Taxation Institute of Australia, Proof Committee Hansard, 12 August 2008, p. 16.

There are over 400 000 family trusts in Australia; Mr Ali Noroozi, Institute of Chartered Accountants in Australia, Proof Committee Hansard, 12 August 2008, p. 9. They may have over $200 billion in assets; Senator Barnaby Joyce, Proof Committee Hansard, 12 August 2008, p. 14. Around 185 000 to 200 000 of these trusts have made family trust elections over the past decade; Mr Raphael Cicchini, Treasury, Proof Committee Hansard, 12 August 2008, p. 2.

[2]        The Hon. Chris Bowen, Minister, Competition Policy and Consumer Affairs, 'Family Trusts—Savings Measure', Media Release, 13 May 2008.

[3]        Mr Raphael Cicchini, Proof Committee Hansard, 12 August 2008, p. 2.

[4]        Submission 1, p. 2. FTDT stands for Family Trust Distribution Tax

[5]        Submission 2, p. 1.

[6]        Submission 2, p. 3. FTE stands for family trust election.

[7]        Submission 1, p. 2.

[8]        CPA Australia notes that the test individual cannot be a deceased person. Submission 2, p. 3.

[9]        Explanatory Memorandum, p. 4.

[10]      Mr Colin Brown, Treasury, Proof Committee Hansard, 12 August 2008, p. 7.

[11]      Mr Mark Leibler, Submission 4, p. 1.

[12]      Mr Mark Leiber, Proof Committee Hansard, 12 August 2008, p. 12.

[13]      Mr Mark Leiber, Proof Committee Hansard, 12 August 2008, p. 14.

[14]      Mr Ali Noroozi, Institute of Chartered Accountants in Australia, Proof Committee Hansard, 12 August 2008, p. 8.

[15]      Mr John Brazzale, Taxation Institute of Australia, Proof Committee Hansard, 12 August 2008, p. 16.

[16]      Mr John Brazzale, Taxation Institute of Australia, Proof Committee Hansard, 12 August 2008, p. 16.

[17]      Mr Donald O'Brien, Family Business Australia, Proof Committee Hansard, 12 August 2008, p. 19.

[18]      Mr Mark Leiber, Proof Committee Hansard, 12 August 2008, p. 12.

[19]      Mr Colin Brown, Treasury, Proof Committee Hansard, 12 August 2008, p. 5.

[20]      Mr Colin Brown, Treasury, Proof Committee Hansard, 12 August 2008, p. 6.

[21]      Explanatory Memorandum, p. 4.

[22]      Submission 3, p. 1.

[23]      Submission 2, p. 1.

[24]      Senator Barnaby Joyce, Proof Committee Hansard, 12 August 2008, pp 14 and 20.

 

Dissenting Report from Coalition Senators

[1]        Mr Julian Cheng, Institute of Chartered Accountants, Proof Committee Hansard, 12 August 2008, p. 8.

[2]        Mr Raphael Cicchini, Treasury, Proof Committee Hansard, 12 August 2008, p. 3.

[3]        Explanatory Memorandum, p. 33.

[4]        Mr Raphael Cicchini, Treasury, Proof Committee Hansard, 12 August 2008, p. 4.

[5]        Mr Colin Brown, Treasury, Proof Committee Hansard, 12 August 2008, p. 5.

[6]        Mr Ali Noroozi, Institute of Chartered Accountants, Proof Committee Hansard, 12 August 2008, p. 8.

[7]        Mrs Genevieve Power, Family Business Australia, Proof Committee Hansard, 12 August 2008, p. 21.