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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
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Stamp Duties (Foreign Ownership Surcharge) Amendment Bill

Committee Stage

In committee (resumed on motion).

Clause 3.

The Hon. R.I. LUCAS: Before the luncheon break we were exploring provisions in relation to interpretation of clause 4, residential land. The question I had been putting to the minister and his advisers was trying to get an answer as to whether the tax lawyer's advice that I have sought is correct; that is, if land is not zoned as residential but the buildings on it are decided by the government (I presume the Commissioner of Taxation) to be of residential character, then they will be subject to the provisions of the surcharge.

A clear example has been raised. The suggestion is that, even though land might not be zoned residential—it might be zoned commercial or whatever it might happen to be—if the tax commissioner decides that, in his or her judgement, the building on this commercial land is of a residential character, then the surcharge will apply. The tax lawyer is suggesting that that would be the case. I am seeking confirmation or otherwise from the government.

The Hon. K.J. MAHER: My advice is that what the honourable member has outlined is correct.

The Hon. R.I. LUCAS: Following on from that and in relation to a point I raised earlier on behalf of the tax lawyer relating to the fact that a letter or an option, the contract for sale, the subsequent deed, varying the contract and conveyance may well all end up being caught by these particular provisions, the tax lawyer has suggested that, rather than being caught up with all these potential grey areas in the legislation, it should simply be the date of the conveyance consistent with section 60A(1) of the Stamp Duties Act. Rather than the various options provided in this drafting, would it not be as simple, as the tax lawyer has suggested, that the action point, to use a non-expert phrase, should be the date of the conveyance consistent with section 60A(1)?

The Hon. K.J. MAHER: Just so we are clear, are we referring to section 72(1)? Is that the area the tax lawyer is suggesting should be amended?

The Hon. R.I. LUCAS: I think my office has now provided a copy of the tax lawyer's advice to the government's advisers to expedite matters. The points being raised here are on pages 4 and 5 of the tax lawyer's advice, regarding clause 4 in relation to residential land. It commences at point 20 and the questions I have just put are under point 24. Rather than repeating all the advice there, it is all going through various subsections of section 72.

What the tax lawyer is suggesting is that, rather than having all those grey areas—to use my phrase, not his—the date of the conveyance consistent with section 60A(1) of the Stamp Duties Act would be a simpler way of drafting this particular provision of the legislation. I am assuming that the government has considered that and rejected it for some reason. If that is the case, what is the reason for that rejection, or has the government just not contemplated the simpler position as put by the tax lawyer?

The Hon. K.J. MAHER: The advice is that we think it is clear. When 72(9) is read in conjunction with 72(1), it makes it clear that the date is the date that the instrument is executed.

The Hon. R.I. Lucas: The date is the date of what?

The Hon. K.J. MAHER: That the instrument is executed. This section applies to a dutiable instrument taken to have been executed, or taken to be executed. That is the relevant date and we think that works perfectly well under that section.

The Hon. R.I. LUCAS: I will not revisit the past arguments earlier in the tax advice. The government's advisers can consider that and reflect on it, but he is certainly arguing the difference between the point in time when something actually occurs here and when it is dutiable, and he has contrasted the issue of when the instrument is actioned and when the transaction has occurred. That is a previous discussion; I will leave that to the side for the moment.

Moving on to point 25 of the tax adviser's advice, he raises questions in relation to the government's previous response in the Budget Measures Bill, which was again used this morning. The minister used, based on advice, the fact that the predominant use test is the test that should be applied. What the tax lawyer is saying is that the predominant use test is only one of three tests that are applied. He instanced one of the other two tests as being the character of unused improvements on the land. I firstly seek whether or not there is agreement with the government's advisers. Do the government's advisers accept that the predominant use test is only one of three tests that are applied, and one of the other tests is the character of unused improvements?

The Hon. K.J. MAHER: My advice is, as I outlined, that's correct.

The Hon. R.I. LUCAS: The tax lawyer then raises an example where a developer acquires a number of properties that have derelict unoccupied dwellings on them for a commercial development. The proposed section 72(8)(b), being much more specific than section 72(8)(a), will require the commissioner to treat the land as residential land for the surcharge purposes. The subsequent procuring of a rezoning of that land, or carrying out of the development as a commercial development, will not lead to a refund of the surcharge.

What the tax lawyer is saying is that someone may well buy land with the clear intention to have a commercial development on it. There might be derelict unoccupied dwellings on it, but the way that this legislation is drafted, the commissioner's intention, the government's intention, is to actually apply the levy surcharge on that particular development as residential even though the clear intention is commercial.

The tax lawyer goes on in point 26 to acknowledge that the introduction of an intention test can create problems. He has not come down in the last shower; he is aware of the problems. What he is suggesting is that much like the proposed refund provisions in sections 72(5) and 72(6), if within, say, three years, the purchaser obtains a rezoning of the land—that is, for commercial properties—and/or constructs commercial premises on the land, then the purchaser is entitled to a refund.

What the lawyer is saying is these people have bought derelict land for a commercial development. That is their intention. The government is going to levy them an additional stamp duty surcharge at 7 per cent, on the basis that, 'We don't know what you're actually going to do.' What he is saying is that if you go ahead and do a commercial development, it has not actually driven up residential land prices at all. It is a commercial development. Should there not be provision, as exists under sections 72(5) and 72(6) in other circumstances, where they are entitled to a refund of the surcharge?

The Hon. K.J. MAHER: I thank the honourable member for his question. I think in the first part he is right: a solely future-intention test would be extraordinarily difficult and unworkable, and it would presumably lead to a motivation for people to have all sorts of intentions that they never intended to carry out. In terms of the follow-on then, what if it is not only an intention but an actuality that happens at some stage in the future—applying for refund? That is one thing that a future government could change, but it is the intention of this bill that it is what the land is at the time of the transaction, not what the intention is in the future or what happens in the future. It is at the time of the transaction.

The Hon. R.I. LUCAS: Yes, but that is the question the tax lawyer is raising. At the time of the transaction, you are not actually buying residential property in competition with Australian or non-Asian buyers, which is the Treasurer's concern about all of this. What you have are derelict, unoccupied buildings on a site that the tax commissioner has deemed to be essentially residential in nature even though they are derelict and unoccupied and are going to be knocked down and there is going to be commercial development there. So at the time of the transaction, again they are not competing with anyone in terms of purchasing residential property and driving up prices. They are actually going through a process of building a commercial development. They then go ahead and do it.

I understand the government are saying they are not going to do anything about it and that is the lay of the land. That is the government's response; I understand that. My question is: is there a provision under the ex gratia payments arrangements where the Treasurer, who I know has the capacity ex gratia to reimburse? Has there ever been an example where the Treasurer has ex gratia reimbursed somebody a stamp duty payment, or would that be potentially available to the Treasurer under these circumstances?

The Hon. K.J. MAHER: My advice is that by the very nature of what ex gratia is, it is theoretically possible that a Treasurer could make an ex gratia payment that would in effect reimburse a taxation measure, but the officer advising cannot think of a circumstance that is the exact one that has been outlined where that has occurred.

The Hon. R.I. LUCAS: I will move on to the foreign persons definition, which was the subject of some debate in the Budget Measures Bill. The tax lawyer has looked at the government's response and has come back with some further questions in relation to it. My first question is: having listened to the advice from the government in response to the debate on the Budget Measures Bill, the tax lawyer has raised the question as to why the government rejected the notion of the simple control test as proposed to be adopted for determining the status of an Australian corporation; why was that not used in the drafting of these particular provisions?

The Hon. K.J. MAHER: I suspect this may be a similar answer to some of the ground we have already covered and that is quite reasonably being reagitated given the answers the government has given previously, but we are comfortable with the way it is drafted and the way it operates. I am sure there will be argument not just from the tax lawyer but from others about a preferred way for this to operate, but this was what was intended, and we are comfortable with the way that it is drafted and will operate in this respect, in terms of the company provisions.

The Hon. R.I. LUCAS: The problem with the government being comfortable with the way it is drafted is that the tax lawyer has highlighted that this raises a significant loophole from the government's viewpoint in terms of avoidance of the measure; that is, the government has determined this should apply.

The tax lawyer is saying that, given the way the government has gone about this particular definition, the government has raised a significant prospective loophole in terms of tax lawyers, accountants and others to construct their affairs to avoid the payment of the surcharge. So, in points 30, 31 and 32, the essential point that the tax lawyer is making in his advice to me is, in point 31:

As the emphasis is on voting power rather than economic consequences this provision will be relatively simple to circumvent with foreign persons establishing companies in which they hold the shares entitled to the whole of the economic benefits and sufficient voting control (that is less than 50% but sufficient to block any special resolutions) to prevent the change of such rights. The [Stamp Duties Act] already looks beyond such control in other provisions in the SDA and to dividend and capital rights.

I will not agitate that particular issue again. It has been highlighted before that there is this loophole. He has raised a question as to why you did not consider the simple control test, which is a question I raised earlier, and the government says, 'We're just comfortable with the way we have drafted it.' The lawyer is saying that the drafting raises a very simple mechanism for people with the capacity to structure their affairs—that is, corporations in particular—to circumvent the payment of this particular provision.

He then goes on, and I highlight point 32, to give a detailed example of how a simple structure can be set up where a foreign person who owns only 40 per cent of the votes which have been cast but is entitled to 100 per cent of the dividends and 100 per cent of the capital on the winding-up of the company can structure their affairs so that zero surcharge is payable in the circumstances. Given that I have provided that to the government advisers, can they confirm that, if someone structures their affairs in that way, they agree with the tax lawyer's advice that zero surcharge will be payable?

The Hon. K.J. MAHER: My advice is that we do not think it is a significant loophole in the way it is drafted. It is significant with other jurisdictions, and we do not see it as being a potential significant problem.

The Hon. R.I. LUCAS: That was not actually my question. If the minister wants me to go through the detail of the example, I will. In point 32 of the tax adviser's advice, he outlines where a corporation can be established with a foreign person with 40 per cent of the votes, entitlement to 100 per cent of the dividends and 100 per cent of the capital on the winding-up of the company, there is an Australian resident adviser of the foreign person who holds shares, entitling him to vote the other 60 per cent of the votes that may be cast.

In those circumstances, as outlined in point 32, the tax adviser is saying that no surcharge would be payable. The government might be comfortable with that, but my question is, simply: is that correct? If you structure yourself that way, is no surcharge payable?

The Hon. K.J. MAHER: My advice is that it is possible, as outlined by the honourable member, that those circumstances could exist. My further advice is that we think it is unlikely that this would be something that is significantly employed to structure your affairs to give you the result under this particular legislation, given all the other consequences that would flow from structuring your affairs in that exact manner.

The Hon. R.I. LUCAS: I thank the minister for that advice. The reason for placing it on the record during this particular debate is that if at some stage in the future, in the event that the government is re-elected, this particular loophole, as advised by the tax adviser, is used and used significantly, we want to make it quite clear that the government has been given this warning. The government's adviser is aware of the name of the prominent tax lawyer and if this is a loophole that is widely used then the government certainly will not be in a position to say they were not warned.

They have been warned on two separate occasions now in relation to this. They have said, and with the greatest respect, the government does not want to be in the position of acknowledging that the tax lawyer knows more about the drafting of the tax law than the government themselves. The Treasurer is obviously reluctant to give another example where legislation has been amended in the Legislative Council, but I think putting the Treasurer's ego aside, the issue here is the nature of the bill that we are being asked to support. It has clearly been highlighted that there is a potential significant loophole. The government acknowledges that that is potentially the case but does not believe that it will be significant. The warning has been given and there is not much else that we can do at this stage other than noting the government's response.

Further on, there was a debate in the Budget Measures Bill about other definitional issues in relation to foreign trusts. In the case of a discretionary trust, the legislation provides that a trust is a foreign trust if one or more of the following is a foreign person:

a trustee;

a person who has the power to appoint under the trust;

an identified object under the trust; or

a person who takes capital of the trust in default.

Without going through all of the responses, the government's response to the Budget Measures Bill in essence was saying that they believe this nexus provision was suitable. The government's response was that a simple way of avoiding the problem identified by the tax lawyer was to ensure that the person who has the power to appoint is not a foreign person.

Essentially, the government's response was: 'Well, look, there are potentially problems but the way around this is these are all voluntary decisions; just make sure that an identified object under a trust is not a foreign person or a person who has the power to appoint under the trust is not a foreign person, or a person who can take the capital of the trust in default is not a foreign person, then you won't have a problem.' The tax lawyer is saying that in some cases it is not as simple as that because it is not a matter of choice of the individuals, and he gives the following examples:

…in some cases the persons who have such control or entitlement accrue such right by death, divorce, bankruptcy or possibly such a person becoming a foreign person. If any of those events occur within three years of the acquisition of the residential property by the trustee then it appears that the proposed section 72(7) will apply to render the acquisition by the trustee of the trust the acquisition of the residential land by a foreign trust. This will be triggered by involuntary events not simply matters of choice.

My question to the minister's advisers are: do they agree with the tax lawyer's advice that in some cases it is not voluntary and that in some cases, such as death, divorce or bankruptcy, these are examples where, beyond the control of individual choices, persons might find themselves in one of these positions and then, ultimately, a particular transaction might become a transaction involving a foreign person?

The Hon. K.J. MAHER: I can confirm the advice, that yes, in those circumstances that is correct.

The Hon. R.I. LUCAS: Again, I think the tax lawyer is saying that in those circumstances, if that is the case, the points he was making originally that were originally rebutted by the government still carry weight. That is, if these things can happen involuntarily, in the tax lawyer's view—and I concur—it would appear to be unfair to those individuals that certain transactions might then become subject to the surcharge, which is now 7 per cent, not the original 4 per cent.

In relation to the trust nexus provision that refers to an identified object under the trust, the government responded to that at the Budget Measures Bill. The tax lawyer is now saying (and I quote point 38 from his advice):

It is still unclear how the provision will work if say three brothers are by name stated to be the identified objects of the trust and one of them is [a] foreign person (as defined). Is it sufficient that one person is a foreign person or does it need to be a majority or all of them? The current drafting appears to assume there will only be one such person. This issue is likely to arise more by way of inadvertence.

So, the question is: in the circumstances of the three brothers being stated to be the identified objects, is it sufficient that only one person is a foreign person for it to become a transaction subject to tax?

The Hon. K.J. MAHER: My advice is that that is correct.

The Hon. R.I. LUCAS: Further on in the tax lawyer's advice he refers to a Victorian decision in Lygon Nominees Pty Ltd v Commissioner of State Revenue. He highlights the point that such persons often cannot be determined until the actual vesting day. This refers to the third nexus provision of the discretionary trust area, which is a person who takes capital of the trust in default. Quoting from that court decision in Lygon Nominees Pty Ltd v Commissioner of State Revenue, in the middle of that, he quotes:

Her Honour held that it was not possible to identify the persons who will have an interest in the fund at the Vesting Day, because all members of that class were not yet in existence or were not yet ascertained. The terms of the trust provide for the possibility of new primary beneficiaries to be born, and existing primary beneficiaries to die prior to the Vesting Day.

He then goes on to say in point 41:

As previously indicated, if the class of such persons can be identified now and is say the relatives (i.e. brothers, sisters, aunties, uncles and their linear descendants and the spouses of such persons (as is common now living, or otherwise a closed class that is identifiable)) there is a real possibility of one such person being a foreign person in a country of migrants.

My first question is: do the government's advisers agree with Her Honour's decision in Lygon Nominees Pty Ltd v Commissioner of State Revenue, the bit I quoted? Does that have application in relation to the current drafting of this legislation?

The Hon. K.J. MAHER: The advisers are not disagreeing with a judgement that a judge has handed down in relation to the operation of the Stamp Duties Act in Victoria.

The Hon. R.I. LUCAS: My question was: does the government agree, as the tax lawyer argues, that that also, therefore, has application to the government's proposed drafting of the Stamp Duties Act in South Australia? I acknowledge that we are not asking the government's advisers to advise on Victorian tax law. What I am saying is that the tax lawyer is saying that that particular judgement has application in the drafting of this bill because the government is proposing to use similar definitions in South Australia.

The Hon. K.J. MAHER: I am not going to be able to give very specific advice. I might be able to do that at a future time, but it might take some time. Certainly, court cases and judgements will, of course, potentially have application as they unfold and as the law develops in all areas right around Australia.

The Hon. R.I. LUCAS: I am happy to leave that as a request for the Commissioner of Taxation, via the Treasurer, if he is able to provide an answer to that on notice after the passage of the legislation. Finally, wrapping up this point, similar issues were raised in relation to this discretionary trust issue in the Budget Measures Bill. I am now referring to point 42 of the current advice. Let me read it:

The response to the Budget Bill provision, on that aspect, was that it is a reference to a specified person in the trust deed. That is, the person must be identified in the trust deed by name.

That was the government's response to the questions I asked on behalf of the tax lawyer in the Budget Measures Bill. You had to specify a name in the trust deed. Further:

The term is not a blanket reference to a person who may potentially take capital of the trust property in default under a discretionary trust deed. It is submitted [that] most discretionary trust deeds do not specify such a person by name. In most cases the takers of the capital in default are a broad class. So, if what is intended is simply limited to a named individual, which is most unusual, then the provision should be redrafted to expressly state that. Otherwise it has the potential to embrace a much broader group of persons, namely all of the persons who may take under this broad type provisions.

My question is: are the government's advisers still sticking to the advice they gave during the Budget Measures Bill, which is that the person must be identified in the trust deed by name? If that is the case, do they agree with the tax lawyer's advice that: if that is the case, why do you not draft the provisions expressly to require that, because if you do not it can be read more broadly than that?

The Hon. K.J. MAHER: We agree with the tax lawyer that the person needs to be named. It is my advice that we are comfortable that that is what this legislation does in fact require.

The Hon. R.I. LUCAS: I think that is where the tax lawyer is disagreeing. If that is what the government intends, he is saying the current drafting does not achieve that. He is saying that the current drafting does not require the person by name, it actually refers to a class of persons and a broad class of persons, and if that is the government's intention, what you should do is redraft the amendment to actually say that you require a person by name. He is disagreeing with that particular position.

The Hon. K.J. MAHER: I suspect there are going to be a couple of points where we just do not agree with the view the tax lawyer has about how this operates and his preferred methodology of drafting.

The Hon. R.I. LUCAS: I move on to the tax lawyer's questions in relation to the adjustment provisions of the foreign owner surcharge. In particular, I am referring to points 46 and 47 of his recent tax advice to me. He raises the issue about the operation of proposed section 72(7)(c). He goes on to say:

The three year adjustment provision appears to be unduly harsh where there are changes in the control of a company or a trust for good family reasons (i.e. death or divorce etc), particularly as the proposed legislation does not provide any power for the Commissioner to provide relief from the operation of the provision in such situations.

He then gives an example in point 47 of his advice:

A simple example is a resident taxpayer's wholly owned company acquires residential land. The resident taxpayer dies shortly after that acquisition. The shares in the company are transferred to his non resident foreign citizen nephew pursuant to the terms of his will. The proposed section 72(7) will require the payment of the surcharge in this situation. Various other similar common situations can be described.

Do the government's advisers agree that, in the circumstances outlined, the Commissioner for Taxation and the government would levy the surcharge on the non-resident foreign citizen nephew of someone who is deceased?

The Hon. K.J. MAHER: My advice is that a transfer pursuant to a will is not liable to duty and therefore would not be liable to the foreign ownership surcharge.

The Hon. R.I. LUCAS: I think the tax lawyer has challenged this issue about transfers and wills in another part of his advice. I thought that the tax lawyer had challenged the particular interpretation that the minister has just given; however, I cannot immediately find it. I may well be able to find clarification of that particular issue before the conclusion of the committee stage.

The Hon. K.J. MAHER: If you want us to take things on notice—

The Hon. R.I. LUCAS: I am happy for you to provide answers on notice for some of the ones where you have said you need to take it on notice. I think the dilemma at this stage is, given that we may well only be sitting these three days, anything that you provide on notice will not be part of the Hansard record for tax advisers, courts and others to educate themselves.

The Hon. K.J. MAHER: For a couple of months.

The Hon. R.I. LUCAS: For the next issue, again coming under the broad heading of adjustment provisions, I refer to point 52 of the tax lawyer's advice. I will read that in order to explain:

The response to a like comment in respect of the Budget Bill was that developments that may benefit the State where it would be appropriate to grant ex gratia relief from the foreign owner surcharge, for example, Australian based, foreign-owned developers who contribute significantly to the South Australian housing supply. Accordingly, it is proposed to publish a ruling setting out factors that will be considered in determining whether ex gratia relief from the surcharge will apply to certain land. All other jurisdictions with a foreign owner surcharge exclude significant residential developments either by way of Treasurer's discretion or ex gratia relief. As already described relief should be available where there is a change of status within a limited time. Outside of that the adoption of ex gratia relief or other tools of government to encourage development is a matter for government. However, as the decision of the South Australian Supreme Court in Chubb Electronic Security Australia Pty Ltd v Commissioner of State Taxation taxpayers disgruntled with an ex gratia relief decision have little recourse to have the decision reviewed, if any.

My question is: given that this issue was raised in the budget bill debate, is that still the case; that is, is the government still proposing to publish a ruling setting out the factors that might determine ex gratia relief? If that is the case, what progress, if any, has been made in terms of drafting that ruling?

The Hon. K.J. MAHER: Yes, that is still the intention, I am advised. The drafting to then publish a ruling is already well progressed.

The Hon. R.I. LUCAS: Is it the government's intention to have that ruling concluded and published prior to the commencement of the surcharge on 1 January?

The Hon. K.J. MAHER: My advice is similar to the last answer: yes, but if not by that time then very shortly thereafter.

The Hon. R.I. LUCAS: Submissions made by the Property Council and a number of other stakeholder groups have traversed this same general area; that is, other jurisdictions, in particular New South Wales and Queensland, do try to distinguish, either by legislation or by this ex gratia relief arrangement, the circumstances where developers who are developing foreign companies, or investors who are developing large tracts of land and are not contributing to the housing price boom, as the Treasurer is concerned about, and are in fact increasing housing supply and housing stock, are catered for by legislation or by the ex gratia arrangement. Can the government outline why they chose to go down the ex gratia path rather than a legislative provision in the drafting?

The Hon. K.J. MAHER: My advice is that we have gone down the path that I think another jurisdiction has gone down in order to provide greater flexibility, and we do not think the application is going to be great, which is why we have gone down this path rather than a legislative intervention.

The Hon. R.I. LUCAS: The tax lawyer provides, by way of explanation on point 64/65 of his advice:

Nothing in clause 5 extends the operation of section 102A(4) to provide a rebate for that surcharge. The rebate in section 102A(4) is limited to the ad valorem duty paid on the acquisition of the land. It is possible that the situation is now even more complicated. An example may better highlight the problem.

Then, he gives the example:

A company Z Pty Ltd is wholly owned by X an individual who is a foreign person. Z Pty Ltd acquires residential land to the value of $2 million. The transfer of the land to Z Pty Ltd will require the payment of the usual ad valorem duty. On the basis that the transfer is the relevant instrument under the proposed section 72 it will also attract the foreign surcharge.

Under the landholder provisions the acquisition of the land also triggers landholder duty as recognised by section 102A(4) and will trigger the landholder foreign surcharge under the proposed section 102AB. So both landholder duty and a foreign ownership surcharge under the proposed section 102AB are triggered. Section 102A(4) then provides for a rebate of the ad valorem duty insofar as the landholder provisions are triggered. Nothing provides for relief from the double imposition of the foreign surcharge (i.e., under section 72 and section 102AB). This suggests that section 102A(4) needs to be extended to avoid the double imposition of the foreign surcharge in this situation, if for no other reason to be consistent.

Do the government's advisers agree with the tax lawyer's explanation there? Is that in fact an accurate description of how those particular provisions operate?

The Hon. K.J. MAHER: My advice is that this is another one. Four or five questions ago, I gave a similar answer: we do not agree, my advice is, with the tax lawyer's view, and we are comfortable that the way it is drafted operates so that the rebate will mean that the surcharge is not imposed twice, in effect.

The Hon. R.I. LUCAS: To clarify, the government is saying that the government's advisers do not agree that section 102A(4) needs to be extended to avoid the double imposition of the foreign surcharge in the situation that was outlined?

The Hon. K.J. MAHER: My advice is that we are comfortable that the section works fine with that provision that provides for the rebate.

The Hon. R.I. LUCAS: The government might be happy that it works fine. I am trying to work out how the government sees this provision working. They may well think it is fine or not; that is up to them. My question is: do the government's advisers agree that section 102A(4) needs to be extended to avoid the double imposition of the foreign surcharge? The government is saying that they do not want to redraft it. Is the government saying that there is no double imposition of the foreign surcharge in the circumstances outlined by the tax lawyer?

The Hon. K.J. MAHER: My advice is that 102A(4) does not need to be extended because it works as we think it should work. We do not agree that it needs to be extended as the tax lawyer has outlined.

The Hon. R.I. LUCAS: I accept that the government says that they do not want to change the drafting, but my question is: is the government's advice that there will not be double imposition of the foreign surcharge in the circumstances outlined, or is the government saying that there will be double imposition of the surcharge and that that is what we want?

The Hon. K.J. MAHER: My advice is that it is not that we think that there will be double charging and that that is a good thing. The way it is drafted, we believe, takes care of that circumstance where, on the second transaction, the rebate does apply, so it is only applied once. The rebate works once and it works sufficiently to avoid the scenario.

The Hon. R.I. LUCAS: I will conclude my questioning, but for the sake of the record, did the minister's advisers come from Treasury or from RevenueSA?

The Hon. K.J. MAHER: I can advise the honourable shadow treasurer that the officers are from RevenueSA. For the sake of completeness, the two who are with me on the floor now are from RevenueSA. Our good friend who has been helping during the course of this and the debate on the Budget Measures Bill is a very fine Treasury official.

Clause passed.

Remaining clauses (4 and 5) and title passed.

Bill reported without amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (16:49): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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