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Senator SIEWERT: But the ideasorry, I am not being clearis that they are not being implemented until 2013. Mr Jacobs: There are lots of different dates. The statutory definition of 'charity' is the key change, and it will not apply until 1 July 2013. The process is to try to have legislation for that passed through parliament in time for the Australian Charities and Not-For-Profits Commission to develop guidance materials on the application of that new statutory definition so that new charities seeking endorsement from 1 July 2013 are in a position to understand how that new law applies. Senator SIEWERT: I beg your pardon. The time frame is actually shorter than I was thinking because you need to have it through so you can develop the guidelines to implement it in 2013. Mr Jacobs: That is right. Senator SIEWERT: I have a couple of other questions that I will put on notice. Senator CAMERON: Mr D'Ascenzio, did you get the pay increase you were after? Mr D'Ascenzio: That is a matter for the independent Remuneration Tribunal. Senator CAMERON: So it is with the Remuneration Tribunal. Let us know how you go. You probably deserve it. Mr D'Ascenzio, I have written to you. Did you get a copy of that correspondence? Mr D'Ascenzio: I did. Senator CAMERON: I will go to another issue first. That is the issue of your procurement policies. Who can help me on procurement policies? Ms Granger: I can try. Senator CAMERON: Do you have procurement policies? Ms Granger: Yes, we do. Senator CAMERON: Do they include specifications for local content? Ms Granger: I cannot tell you the terms for them precisely, so if you ask the questions we will get you the answers. Senator CAMERON: That is a question. Ms Granger: Yes, I am sorry. I do not have the detail of that. Senator CAMERON: You do not know about local content? Ms Granger: Not off the top of my head, no. Senator CAMERON: Have you outsourced your procurement function? Ms Granger: No. Senator CAMERON: So you have a department within Ms Granger: Yes, we do. It is under the chief financial officer. Senator CAMERON: You do not use a company called UGL at all for procurement? Ms Granger: I do not know. I am not aware of it. Senator CAMERON: Are you in the process of procuring new office chairs? Ms Granger: We could be. It is a big organisation, so there could be office chairs being procured at particular times. We will have to check on the detail. Senator CAMERON: I have received some advice, and I am not sure how authentic it is, that you are doing a significant procurement of office chairs. Given the number, I am sure somebody would know. Nobody here knows whether you are doing a procurement? Ms Granger: Not the detail, but we are in the process of opening a number of significant new buildings this yearone in the Melbourne area and one in the Adelaide areaand so it could be associated with that. Senator CAMERON: Do you have some advice on it now? Ms Granger: It says we do use UGL. Senator CAMERON: Oh, you do use UGL. Ms Granger: It says we do use UGL. Senator CAMERON: You said you did not a minute ago. Ms Granger: I said not as far as I was aware. ECONOMICS LEGISLATION COMMITTEE

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Senator CAMERON: So I will have to be careful with you, will I? Ms Granger: I am not trying to be tricky. Senator CAMERON: You are not? Ms Granger: I simply do not have the knowledge myself. Senator CAMERON: Okay. Tell me what UGL does for you. Is there anyone who can tell me? This is a big issue. Ms Granger: I am happy to take the details and get you the answer. I just do not have it here. Senator CAMERON: I will have to write to you the same as I did to Mr D'Ascenzio, I think, to get some answers. Ms Granger: Certainly, or put it on notice. We would be happy to answer. Senator HEFFERNAN: Could I raise a procedural matter? CHAIR: You may. Senator HEFFERNAN: Do the witnesses have an objection to the camera? That is part of the procedural processes of a Senate committee. You cannot just wander in and film without asking people if they have an objection. Senator CAMERON: That is an issue for us. CHAIR: Senator Heffernan, I have never asked a witness that in my life. It has been 16 years. Senator HEFFERNAN: There you go; you have been a bit off the pace. It is part of the practice. CHAIR: I have never been in a committee where witnesses have been asked. Senator HEFFERNAN: You ought to come to my committee. CHAIR: What I advised the cameraman is that he is able to film the heads of people but not the paperwork on the desk. Senator HEFFERNAN: I think it is required, to give you some advice. CHAIR: Does anyone object? No? Thank you. Senator CAMERON: Ms Granger, would it be in the realm of possibility that you are about to order 20,000 chairs? The information I had about UGL was correct, and I am told the number is around 20,000. I think that is a lot of chairs. Ms Granger: Indeed it is. I will need to check. Senator CAMERON: You do not know? Ms Granger: I am not aware of it. As I said, that could be a contract over time, for example. I simply do not have the details for you here tonight. Senator CAMERON: So it is within the realm of possibility. The advice I have is that you are ordering 20,000 chairs from Korea. Ms Granger: I am sorry, I do not have the information here tonight. Senator CAMERON: Could you find out for me whether you are ordering any number of chairs from Korea through the company UGL. Ms Granger: Certainly. Senator CAMERON: Could you find out whether the chairs that you are ordering are called Aeron chairs. Could you also advise me if these are the same chairs that were designed in 1994, and which have been rejected by the Auckland Savings Bank as not ergonomically acceptable. What checks and balances would you have within the ATO in relation to UGL? I suppose you do not know that either, seeing as you did not know they were there. Ms Granger: Just because I do not have knowledge of it does not mean that there is not a proper process. Senator CAMERON: So nobody here can tell me about it? Ms Granger: Not in this level of detail, and I would prefer to get you a proper answer. CHAIR: Is this the united group? Senator CAMERON: Yes, United Group Limited, in Western Australia, I think. Senator HEFFERNAN: Are these those chairs you can go back to sleep on?

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CHAIR: Do not interrupt, Senator Heffernan. Senator CAMERON: While I am asking about local content and procurement policies, I understand that Seibels have a chair that is ergonomically superior to this old style chair and is a competitive price. If this is correct, did UGL or the ATO have a look at the capacity to procure locally and maintain jobs within Australia at Seibels, who employ Australian workers? Could you give me copies of your procurement policiesI do not want contractsthat UGL have to meet, as the ATO is now contracting out procurement. There are other issues that I want to raise, but obviously you do not have the answers tonight, and I accept that. Ms Granger: I would be very happy to take those on notice and get you the answers. Senator CAMERON: Thank you. Let us hope we have more luck with Mr D'Ascenzo on the issue of TPG Capital. I wrote to you on 8 February, Mr D'Ascenzo, about my concerns in relation to TPG Capital. There has been legal action in the Federal Court. I think that the case is TPG Newbridge Myer Ltd v The Deputy Commissioner of Taxation. To set the scene, TPG acquired a $300 million stakeand 84 per cent stakein Myer. TPG sold its stake through a public listing and they realised $1.8 billion. Under tax law, as this was designed to attract foreign investment they were exempt from capital gains tax. The ATO took the viewand I think correctlythat the return to TPG was trading profit not capital gain and the ATO attempted to freeze TPG's bank accounts. But the accounts had already been emptied. The ATO was looking to recover $678 million in tax for the Australian public. TPG had emptied their accounts and shifted money through a number of related entities through tax havens in the Cayman Islands and Luxembourg to the Netherlands and then to the United States. TPG Capital is a company with $48 billion in assets. While we have tax treaties with both the US and the Netherlands, it seems to me that we cannot enforce our claim on TPG because of the channelling of funds initially through related entities domiciled in tax havens with which we do not have tax treaties. Is that a proper summary of where we are up to? It is not all the detail, but are the broad terms correct? Mr D'Ascenzo: I will preface my answer by saying that normally we try not to talk about individual taxpayers. But there has been a lot of information put on the public record in relation to this matter. Senator CAMERON: Mr D'Ascenzo, these are not taxpayers. It seems to me that you cannot in any way claim that they are taxpayers. Mr D'Ascenzo: I was using the generic term. Senator CAMERON: I agree with your proposition for normal taxpayers, but there are not. Mr D'Ascenzo: The point that I am making is that there is quite a lot of public record and reading from that public record your summation is in broad terms a reasonable one. The flows went from Australia to the Netherlands to Luxembourg to Cayman Islands rather than the way that you described, but other than that your statement was reasonable. Senator CAMERON: Good. In this very murky little situation that we have here, we have a thing called the protocol to the double taxation agreement with the US. Is that correct? Mr D'Ascenzo: Yes. Senator CAMERON: This was a treaty signed by the Howard government in June 2002, correct? Mr D'Ascenzo: The Joint Standing Committee on Treaties met in May, and so it was subsequent to that. Senator CAMERON: I want to come to that joint standing committee. Are you aware that the joint standing committee expressed significant concerns about signing off on this protocol? Mr D'Ascenzo: Yes, I am aware of that. Senator CAMERON: In fact, they raised the fact that there would be significant costs to the Australian taxpayer as a result of this protocol, costs estimated at around $190 million per annum. Is that correct? Mr D'Ascenzo: That is right. In fact, I think that the figure of $190 million was provided to the committee by Treasury and the ATO. Senator CAMERON: The joint treaties committee report that was tabled on 12 March 2002 raised the concern that the revenue gains to Australia could not be quantified. Is that correct? Mr D'Ascenzo: I am not fully aware of that but I am happy to accept that as a reasonable proposition. Senator CAMERON: The committee made a number of recommendations. They said that they would decline to support the binding treaty on the protocol. They said that the ATO, in consultation with the Treasury, should develop a methodology to quantify the economic benefits of the double tax agreement. Given that you were aware that I was going to ask these questions, have the concerns of that treaties committee been fulfilled? Where these

ECONOMICS LEGISLATION COMMITTEE