The Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, the Hon Chris Bowen MP, today announced that the Government will be moving to allay concerns in industry regarding the previous Government's announced changes to the consolidation tax cost setting rules when an entity joins a consolidated group or multiple entry consolidated group (MEC group) following a CGT roll‑over affecting the membership interests of the joining entity.
"The previous Government's announcement has caused significant disruption to the operation of Australia's capital markets and has effectively prevented any new scrip for scrip transactions", Mr Bowen said.
"It is quite clear that there was insufficient consultation with the private sector by the previous Government in relation to this decision.
"I have asked the Treasury to consult with the private sector about how this situation will be resolved.
"This situation is quite urgent, it is necessary that this consultation be conducted expeditiously, and be completed by mid-February.
"It is necessary to ensure that the changes protect public revenue while not having the unintended consequence of hindering the operation of scrip for scrip transactions.
"Accordingly, I have asked that the consultation focus on ensuring non-contrived commercial takeovers involving an exchange of scrip are not affected by the changes."
11 January 2008
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