Fed: Coalition showdown on trusts likely

AAP General News (Australia)
12-06-2000
Fed: Coalition showdown on trusts likely

CANBERRA, Dec 6 AAP - The federal coalition is facing internal turmoil as the National
Party hardens its stance against the taxation of family trusts.

A key plank to the government's revamp of business taxation, the Nationals have rejected
any moves that will hit family trusts which are largely used by farmers and small business.

It puts the government, particularly Treasurer Peter Costello, in a difficult position
since the reforms are supported by the Liberal Party.

Opposition treasury spokesman Simon Crean said Mr Costello would have to resign if
forced to abandon the trusts crackdown.

"If he doesn't honour the agreement that he signed, underpinning business tax reform
and out in writing on behalf of the government, he must resign," Mr Crean told parliament.

"It's as simple as that. It's not just a question of trusts, it's a question of trust."

Mr Costello said the government would take on board any comments made on its draft legislation.

"After we have fully consulted in relation to these measures, we will proceed with
our business taxation reform," he told parliament.

Mr Costello denied the abandonment of the trusts changes would leave a $2 billion hole
in the budget, saying it was closer to $350 million.

National Party leader John Anderson said his party was committed on the issue.

"We are strongly committed to eliminating any tax avoidance or misuse of trusts.

"But by the same token, we will not penalise legitimate use of trusts for family and
small business usage."

AAP sw/gmw/de s

KEYWORD: TRUSTS DAYLEAD

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