As westerners, we place a high value on rational and logical debate. "Let's not get emotional" is a standard put- down to those who feel strongly about an issue. It seems that any emotional displays are signals that whoever displays emotion in a discussion isn't being entirely rational. Whatever!
So let's look at Islamic banking and please, no emotion!
So, you thought that Sharia Law was only about religion?
It seems that interest free banking is also about Sharia.
Source: http://www.abc.net.au/pm/content/2010/s3055290.htm
MARK COLVIN: The chairman of the Federal Government's independent advisor on tax laws Dick Warburton has weighed into the debate on Islamic banking. He's urged people to consider the matter on its face value rather than responding emotionally.
The Board of Taxation recently released a discussion paper on the tax treatment of Islamic finance. Liberal Senator Cory Bernardi responded by saying he feared permitting Sharia finance products would lead to fundamental changes in the finance sector. He said the laws shouldn't be changed to accommodate a system he regarded as incompatible with Western values.
Mr Warburton, a former member of the Reserve Bank board told Alexandra Kirk that Senator Bernardi had overreacted.
DICK WARBURTON: I think it's jumping the gun on what we on the Board of Taxation have been asked to do by the current Government. It's made statements, rather emotional statements that we should keep out and stop any moves to expand Islamic banking. Well we're not aiming to do that anyway. We're aiming just to see if there are any impediments to this.
ALEXANDRA KIRK: And what have you found so far about there being any impediments?
DICK WARBURTON: Well there are differences because of the Islamic or Sharia law. But, and we wouldn't be looking to introduce any new laws at all to either give incentive to or to enable these financial products to come in. We wouldn't be doing that at all.
What we'd be recommending is if there is some let me call it tweaking that can be done to our existing laws to meet the substance of the Sharia law then we would probably be looking to recommend that to the Government that we do that. But certainly no incentives or no new laws.
ALEXANDRA KIRK: You think it's worthwhile trying to accommodate Islamic banking?
DICK WARBURTON: Well it is if you're trying to be a centre for finance in this part of the world because after all a number of countries are already looking into this, or sorry not are looking into it, are actually utilising these laws, countries such as Korea and Singapore and Malaysia. And so we would only be going along with some of these others.
Although once again I might say that some of those others have brought in new law. We would not be recommending bringing in new law.
ALEXANDRA KIRK: But you are talking about the possibility of tweaking. That doesn't require new laws?
DICK WARBURTON: No. No it doesn't.
ALEXANDRA KIRK: Or amending existing ones?
DICK WARBURTON: It utilises existing ones and just makes sure that some tweaking is done to eliminate any impediments to Sharia law or financial products.
And Alex this is nothing really dissimilar to what we've been doing over the years because over the years banks and different bodies have come up with new products all the time.
And when they do come up generally some new ruling is perhaps either sought or given by the tax office to accommodate the substance of these products. Well this is exactly the same that we're looking at.
ALEXANDRA KIRK: And in researching your discussion paper what sort of reaction have you encountered to Islamic banking, to the idea of accommodating Islamic banking?
DICK WARBURTON: Well those who have been working with us in preparing the discussion paper are banks and groups who are actually already offering some Islamic finance products into the community. And these include one or two of our major banks, let alone the Qatar Islamic Bank and the Muslim Community Cooperative Australia. So you know it's just fitting in with something that's already going along now.
ALEXANDRA KIRK: And have you encountered any resistance to the idea?
DICK WARBURTON: Not at all. Until this press release came out I hadn't seen any comment along that line. And it just bothers me that it possibly is just playing on emotion rather than fact.
ALEXANDRA KIRK: You don't think there is any resistance in the community at large?
DICK WARBURTON: Not to this. There's clearly some resistance in the community to anything Islamic at the moment. And I think you've got to look at every one of those things on their face value, not on some emotional feel.
MARK COLVIN: Dick Warburton who chairs the Board of Taxation, the Government's independent adviser on tax laws, speaking to Alexandra Kirk.
Thursday, November 18, 2010
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