Queensland Nationals Senator Barnaby Joyce today applauded the Government for withdrawing a bill from the Senate which would have exempted overseas companies from paying Capital Gains Tax in Australia.

After expressing serious concerns with the Tax Laws Amendment (2006 Measures No 4) Bill 2006, Senator Joyce asked for and was granted a deferral of consideration of the legislation.

“I believe the National Party in Queensland would have serious issues with the fact that tax paid by an Australian resident on the sale of shares is subjected to Capital Gains Tax but a US resident on the sale of the same shares would not pay tax CGT in Australia.

“Likewise there are serious concerns of the loss of tax revenue from Australia. For example the profit of the sale of Coles which if we imagine a $3 billion profit on its potential sale would yield a $900 million CGT liability to our Australian coffers.

“Under this bill, this money would be pocketed by the overseas investor and lost to building roads and hospitals in Australia.

“The most surprising issue of this bill was that it was going to be supported, almost without dissent, by Labor.

“I don’t know how Labor would have gone telling people in the pubs of Western Sydney that they supported a bill where investors from the US or Denmark don’t pay CGT but if you are an Australian selling shares in Australia you do.

“The only balancing of this equation is the supposed reciprocal arrangements but it is well known that smart companies will ensure the money is divested to areas where no CGT tax is payable, such as New Zealand or the Bahamas.”