KEY POINTS:
The private equity phenomenon is not depriving the Australian government of tax revenue, an industry representative there says.
Instead, overall growth in employment and investment was more likely because owners had to build a company's value to realise profit at the end of the process, Australian Private Equity and Venture Capital Association chairman David Jones said.
Private equity takeovers generally involve substantial debt being transferred onto a company's balance sheet, reducing profitability in the short term and thereby creating tax benefits.
A recent failed bid for Qantas by a Macquarie Bank-led consortium would have increased the airline's debt from about A$5 billion ($5.7 billion) to between A$8 billion and 9 billion.
- AAP
