Document Index Budget Related Paper "Promises Kept for a Stronger Australia"

Economic Growth and Job Creation -Contents

• Economic Growth and Job Creation
  • The Communications, Information Technology and the Arts Portfolio
    • Establish Cooma Call and Technology Centre
    • Support for 1999 as Online Australia Year
    • Australian Broadcasting Authority -- funding for planning requirements related to digital broadcasting
    • Regional telecommunications infrastructure fund
    • Commonwealth Technology Park -- Melbourne Docklands
  • The Education, Training and Youth Affairs Portfolio
    • Extension of Young Offender Pilot Programme
    • Improvement of School Students' Literacy and Numeracy Skills
    • Literacy and Numeracy in the Middle Years of Schooling
    • Extension of Commonwealth Funding for the National Asian Languages and Studies in Australian Schools Strategy
    • Quality Teacher Programme
    • Increased Assistance for Isolated Children Scheme Boarding Allowances
    • Maintenance of Higher Education Research Infrastructure Funding
    • Funding Science Lectureships
    • Developing an enterprise culture - women in small business
    • Additional funding to Catholic Education Systems
    • Extra Student places for James Cook University
    • Short-term Emergency Assistance for School-term Hostels
    • Strategic Partnerships -- Industry Research and Training Scheme
  • The Employment, Workplace Relations and Small Business Portfolio
    • Improve job opportunities by establishing a Return to Work programme
    • Extension of Work for the Dole programme to Year 12 school leavers
    • Workplace Reform - Secret Ballots
    • Workplace Reform - Plain English Legislation
    • Workplace Reform -- improvement to the operations of the Affirmative Action (Equal Employment Opportunity for Women) Act 1986
    • Developing an enterprise culture
  • The Industry, Science and Resources Portfolio
    • Extension of Country of Origin Awareness Campaign
    • Support domestic tourism campaign
    • Competition Reform in Energy Markets
    • Extension of the Shipbuilding Production Bounty
    • Introduce Shipbuilding Innovation Scheme
    • Reallocation in R&D START funding
    • Establish Printing Industry Competitiveness Scheme
    • Boosting Australia's Innovation and Science Culture
    • Continuation of funding for the Pooled Development Funds Programme
    • Revenue
    • Establish a National Strategy for Biotechnology
    • Investment Ready Program
    • Venture Awareness
    • Institute of Molecular Bioscience
    • Marine Science Centre
    • Greenhouse Challenge
  • The Treasury Portfolio
    • Corporate Law Economic Reform Programme
    • A New Tax System
  • The Family and Community Services Portfolio
    • Tax Reform Package
    • Tax Reform Package
  • The Treasury Portfolio
    • Equity injection for A New Tax System initiatives
    • Additional funding for taxation reform
    • Business taxation reform
    • Capital
    • Fringe Benefits Tax reform
    • Savings Bonus for Older Australians
    • Binding Oral Advice by the Australian Taxation Office
    • Pay As You Go and New Witholding Arrangements
    • Tax Reform price exploitation
    • Australian Business Number
  • The Veterans' Affairs Portfolio
    • Implementation of Tax Reform Package

The Communications, Information Technology and the Arts Portfolio

Establish Cooma Call and Technology Centre

Explanation

The Government will support the establishment of a Call and Technology Centre in Cooma, NSW to improve information technology and telecommunications infrastructure and services in the Cooma region.

This measure delivers on the Government's election commitment.

Further Information

The proposed grant is a one-off payment to set up the facility and fund its initial running. It is expected that income flows and community contributions would cover all ongoing recurrent costs of the Centre. Implementation is scheduled for July 1999.

Support for 1999 as Online Australia Year

Explanation

The Government will support 1999 as Online Australia Year. This initiative will build on the momentum and interest generated in the lead-up to Online Australia Day -- a national day of awareness raising coordinated by the National Office for the Information Economy on 27 November 1998. A programme of events, developed through consultation with industry, business, community and government stakeholders, will be conducted from March to November 1999.

Funding for this measure of $1.1 million in 1999-2000 will be offset from savings in departmental expenses of the Department of Communications, Information Technology and the Arts.

This measure delivers on the Government's election commitment in Securing Our Information Future.

Australian Broadcasting Authority -- funding for planning requirements related to digital broadcasting

NOTE: The 1998-99 MYEFO provided estimates of the impact of measures on the underlying cash balance.

Explanation

The Government committed $0.5 million in 1998-99 on a cash outlays basis in the MYEFO.

This measure was reported in the MYEFO as follows:

"The Government has provided additional funding to the Australian Broadcasting Authority in 1998-99 to facilitate forward planning for the introduction of digital television broadcasting on 1 January 2001."

This measure delivers on the Government's election commitment in Securing Our Information Future.

Regional telecommunications infrastructure fund

Explanation

Recognising the significant gaps in the quality and cost of Telecommunications services between metropolitan and non-metropolitan Australia, the Government has previously introduced a five-year (from 1996-97) $250 million Regional Telecommunications Infrastructure Fund called Networking the Nation. This provides funding for regional, rural and remote communities to identify their communications needs, and develop and implement projects that meet those needs.

From the Telstra Social Bonus a further $81 million will be allocated over three years to extend the scheme. This will be used for increased Internet Points of Presence; improved mobile phone coverage on major highways; and assistance to isolated island communities and the Australian Antarctic Territory.

This measure delivers on the Government's election commitment in Communications: Making Australia Stronger, and Regional Australia Internet Access.

Explanation

The Government will provide $22.5 million over 4 years ($2 million in 1999-00) to help fund the development of a world class science and technology park in the Melbourne Docklands.

The park will focus on industrial research and is likely to generate $400 million in new investment over the next 10 years.

The Government's contribution is to be funded from the Federation Fund.

This measure delivers on the Government's election commitment in A Vision for Excellence.

The Education, Training and Youth Affairs Portfolio

Extension of Young Offender Pilot Programme

Explanation

The Government will provide funding to extend the Young Offender Pilot Programme to assist young offenders in rural and remote locations in Western Australia and the Northern Territory. This meets the election commitment to deliver additional funding to the programme.

The programme provides intensive support (job search training, career counselling and the development of literacy and numeracy skills) for juvenile offenders about to return to the community. It uses a range of strategies to assist in their integration into mainstream

community life, education, training and employment. Intensive support is given to offenders while they are in custody and continues post-release.

This measure delivers on the Government's election commitment in A Safer and Stronger Australia.

Improvement of School Students' Literacy and Numeracy Skills

Explanation

The Government will continue funding for the existing National Literacy and Numeracy Strategy. The Strategy, which was due to end in 1999, will now continue until 2002. Funding for the Literacy and Numeracy Programme will provide support to schools to measurably improve the literacy and numeracy skills of students in the early years of school who are not meeting the national benchmarks, including support for Indigenous students as a priority area. This will ensure students do not leave school without the literacy and numeracy skills to enable them to enter work or further training.

For further information see the related expense measure below titled Literacy and Numeracy in the Middle Years of Schooling.

This measure delivers on the Government's election commitment in Raising Standards to provide additional funding to further improve literacy and numeracy in schools.

Literacy and Numeracy in the Middle Years of Schooling

Explanation

The Government will extend the Literacy and Numeracy Programme to the middle years of schooling to ensure that students have the basic literacy and numeracy skills to cope with the demands of the secondary school curriculum.

This funding will support the implementation of the National Literacy and Numeracy Plan into the middle years of schooling and meets the Government's 1998 election commitment. The funding, which will commence on 1 January 2000, will support innovative and nationally significant initiatives to assist students who have progressed to

later primary and early secondary school without achieving a minimum acceptable standard of literacy and numeracy.

See also the related expense measure above titled Improvement of School Students' Literacy and Numeracy Skills.

This measure delivers on the Government's election commitment in Raising Standards.

Extension of Commonwealth Funding for the National Asian Languages and Studies in Australian Schools Strategy

Explanation

The Government announced in its 1998 election policy statement for schools, that it would provide support for the continued development of Asian languages and an understanding of Asian cultures in our schools. By providing funding for another three years for the National Asian Languages and Studies in Australian Schools Strategy, the Government has honoured that commitment.

The Strategy is a collaborative initiative of Commonwealth, State and Territory governments. It supports Asian languages and studies in all school systems in order to improve Australia's capacity and preparedness to interact internationally, in particular with key Asian economies. In the short to medium term the Strategy targets the languages of our four most significant trading partners -- Chinese (Mandarin), Japanese, Korean and Indonesian.

This measure delivers on the Government's commitment in Raising Standards.

Quality Teacher Programme

Explanation

The Government will provide funding to update and improve the skills and professionalism of teachers in both government and non-government schools. This measure meets the Government's 1998 election commitment to strengthen the skills of the teaching profession.

The programme will provide professional development to renew teacher skills and understanding of literacy, numeracy, mathematics, science, information technology and vocational education. The initiative will specifically target teachers who have completed formal training ten or more years ago, casual teachers and teachers who are re-entering the teaching force. Consultations about the initiative will take place from June to December 1999. Programme activities will be initiated in February 2000.

The professional development programme can be provided by government and non-government education authorities, professional associations or suitably qualified consortiums of education providers (including schools or clusters of schools) in identified Commonwealth priority areas.

This measure delivers on the Government's election commitment in Raising Standards.

Increased Assistance for Isolated Children Scheme Boarding Allowances

Explanation

The Government has increased the Assistance for Isolated Children (AIC) Scheme basic and additional boarding allowances from 1999. The Government is committed to providing all Australians access to quality education.

The AIC Scheme helps families of students who are unable to attend an appropriate government school on a daily basis -- primarily due to geographic isolation. This increase in allowances recognises the barriers to education faced by many isolated families and the extra costs associated with the schooling of their children. It will affect approximately 7,800 students.

This measure delivers on the Government's election commitment in Raising Standards.

Further Information

The increase in allowances took effect from 1 January 1999. It increases the basic boarding allowance from $2,900 to $3,500, restoring the rate to 55 per cent of the average boarding fee. It also increases the upper limit that can be received under a combination of the basic and additional boarding allowances, bringing it in line with ABSTUDY's school fees allowance for boarders. The increase means that the maximum amount that can be received under both the AIC boarding allowances is now $4,377. The increased amounts will apply to both primary and secondary students where previously they received different levels of assistance.

Maintenance of Higher Education Research Infrastructure Funding

Explanation

The Government has increased the funding for higher education research infrastructure by $93.3 million over the period 1999-2000 to 2001-02. It provides funding to support university facilities such as libraries, computing centres, animal houses, herbaria and experimental farms, salaries of research staff and equipment expenses.

This initiative ensures that funding does not fall below 1996 levels and honours the Government's election commitment in its Higher Education Policy Statement. The measure takes effect from 1 January 2000.

Funding Science Lectureships

Explanation

The Government will provide funding of $25 million from 1999-2000 to 2001-02, commencing 1 January 2000, to fund university science lectureships. The measure will enable universities to respond quickly and effectively to demand for new undergraduate and post-graduate science courses, which give students the new knowledge and skills necessary to meet the needs of emerging industries and technologies.

The design and delivery of courses will be developed cooperatively by industry and universities. This additional funding honours the election commitment to provide new funding to support Australia becoming a knowledge-based economy and to improve the effectiveness of our institutions in developing, transferring and applying knowledge.

This measure delivers on the Government's election commitment in A Vision for Excellence.

Developing an enterprise culture - women in small business

Explanation

The Government will provide funding in 1999-2000 for the development of nationally recognised training materials and a training programme to enhance management skills for women in small business. These will be made available through Vocational Education and Training providers in a self-paced learning format.

Information on the products will be disseminated through on-line technology, seminars and printed material, linked to broader information initiatives by the Department of Employment, Workplace Relations and Small Business.

This funding will meet the Government's 1998 election commitment to support women participating effectively in small business, which is vital to generating and maintaining employment, growth and prosperity.

This measure delivers on the Government's election commitment in Opportunity and Choice.

Additional funding to Catholic Education Systems

Note: The 1998-99 MYEFO provided estimates of the impact of measures on the underlying cash balance.

Explanation

The Government committed $135.3 million in 1998-99 on a cash outlays basis in the MYEFO.

This measure was reported in the MYEFO as follows:

"The Government will provide increased funding to the Catholic school systems in New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory. This decision follows an independent assessment of the needs of these systems conducted by the Non-government Schools Funding Review Committee. The committee was appointed by the Minister for Education, Training and Youth Affairs to advise on any significant changes in financial need which warrant increased Commonwealth

funding to non-government school systems. The measure takes effect from 1 January 1998."

This measure delivers on the Government's election commitment in Raising Standards.

Extra Student places for James Cook University

Note: The 1998-99 MYEFO provided estimates of the impact of measures on the underlying cash balance.

Explanation

The Government committed $2.1 million in 1998-99 on a cash outlays basis in the MYEFO.

This measure was reported in the MYEFO as follows:

"To support access to higher education, particularly for potential students from Far North Queensland, the Government will provide funding to support an additional 450 student places in 1999 at James Cook University. This initiative is consistent with the Government's commitment to support access to higher education for students from rural and isolated areas."

This measure delivers on the Government's election commitment in its Higher Education Policy statement.

Short-term Emergency Assistance for School-term Hostels

Note: The 1998-99 MYEFO provided estimates of the impact of measures on the underlying cash balance.

Explanation

The Government committed $0.3 million in 1998-99 on a cash outlays basis in the MYEFO (refer page 47 of the MYEFO).

Short-term emergency funding totalling $0.3 million has been provided in 1998-99 to assist school term hostels in significant financial difficulty, and to ensure that the hostels would be available in 1999 for children living in rural and remote areas.

This measure delivers on the Government's election commitment in Raising Standards.

Strategic Partnerships -- Industry Research and Training Scheme

Note: The 1998-99 MYEFO provided estimates of the impact of measures on the underlying cash balance.

Explanation

This measure was reported in the MYEFO as follows:

"The Government is providing additional funding for the Strategic Partnerships -- Industry, Research and Training (SPIRT) Scheme. The Scheme supports collaboration between higher education institutions and industry by funding collaborative research projects, awards and fellowships. The Scheme also attracts financial support from industry, broadening the financial base of universities. The additional Commonwealth funding will maintain the baseline level of new grants and provide continuing support for ongoing activities."

This measure delivers on the Government's election commitment in its Higher Education Policy Statement.

The Employment, Workplace Relations and Small Business Portfolio

Improve job opportunities by establishing a Return to Work programme

Explanation

The Government will provide flexible assistance to primary care givers who return to the workforce after an absence of two years or more. The assistance will be in areas such as skills assessments, return to work and career planning, confidence building, increasing familiarity with current technology and facilitating access to relevant training. This measure will improve job opportunities and choices for unemployed people returning to the workforce and will be of particular benefit to women who have been out of the workforce caring for young children.

This measure delivers on the Government's election commitment in Pathways to Employment.

Extension of Work for the Dole programme to Year 12 school leavers

Explanation

The Government will expand the Work for the Dole scheme to accommodate those Year 12 school leavers who have been receiving unemployment payments for three months or more.

This measure delivers on the Government's election commitment in Working for the Dole.

Further Information

This measure will provide Year 12 school leavers with access to valuable work experience in order to enhance their employment prospects and to provide them with the opportunity to contribute positively to local communities. The measure will provide for up to 6,000 places a year for Year 12 school leavers on full rate of unemployment payments.

Workplace Reform - Secret Ballots

Explanation

The Government will introduce secret ballots for decisions about protected industrial action. Secret ballots will enhance the democratic decision-making processes involved in protected industrial action, help to improve the arrangements for bargaining, strengthen the accountability and responsiveness of unions to their members and minimize unnecessary protected industrial action.

This measure delivers on the Government's election commitment in More Jobs, Better Pay.

Workplace Reform - Plain English Legislation

Explanation

The Government will review and restructure the Workplace Relations Act 1996. If appropriate, a plain English version of the Act will be developed. This measure will help employers and employees to better understand the workplace relations regulatory framework, and the rights, obligations and opportunities the system provides. A plain English version of the Act will allow employers and employees to assume greater direct responsibility for workplace matters.

This measure delivers on the Government's election commitment in More Jobs, Better Pay.

Workplace Reform -- improvement to the operations of the Affirmative Action (Equal Employment Opportunity for Women) Act 1986

Explanation

The Government will make some changes to Australia's Affirmative Action framework. It will change the names of the Affirmative Action Agency, the Director and the Act and will establish an Advisory Board. New streamlined reporting arrangements will apply and education materials will also be developed.

This measure is aimed at improving the operation of the legislation with an increased focus on outcomes achieved, a reduction in paperwork and stronger workplace links.

This measure delivers on the Government's election commitment in More Jobs, Better Pay.

Developing an enterprise culture

Explanation

The Government will initiate a three year grants programme called the Small Business Enterprise Culture Programme (SBECP). The Programme's key aim will be to foster the development and enhancement of small business owner/managers' skills and to increase recognition of the importance of such skills to business viability. To achieve this aim, the Programme will support projects that enhance access to skills development and mentoring services which meet the needs of small businesses.

The measure will support selected demonstration projects that provide skills development initiatives and mentoring services to either employing small businesses or those capable of taking on employees. A specific element of the SBECP will be devoted to supporting information access and business support initiatives for women owner/managers of small businesses.

This measure delivers on the Government's election commitment in A Small Business Agenda for the new Millenium.

Further Information

The SBECP's key elements will be the three election commitments made by the Government in A Small Business Agenda for the New Millennium (1998). These are:

• the establishment and support of mentoring programmes for small businesses;
• fostering skills development for micro business managers; and
• assisting the growth and prosperity of women in small business.

The Industry, Science and Resources Portfolio

Extension of Country of Origin Awareness Campaign

Explanation

The Government will assist consumers by extending the existing community awareness campaign on country of origin labelling. The major activity will be a community awareness campaign, primarily focused around a `look for labels' message.

The campaign will seek to establish a greater marketing advantage in country of origin labels, encouraging Australian firms to voluntarily include such labels as part of their marketing strategy, rather than as a consequence of a legislative requirement.

This measure meets the Government's election commitment set out in A Fair Deal.

Support domestic tourism campaign

Explanation

The Government will support a comprehensive Commonwealth/State/industry domestic tourism "attitudinal change" campaign to help build a stronger, sustainable and internationally competitive Australian tourism industry.

With a focus on the diversity, quality and accessibility of Australian tourism, the campaign aims to increase the level of expenditure on domestic tourism activities and employment, particularly in regional Australia by using strategies to reach and motivate target markets.

This measure delivers on the Government's election commitment in Australia Bound.

Further Information

The campaign will be industry-driven and Commonwealth support is contingent upon contributions from States, Territories and industry. An initial $2.0 million was allocated in 1998-99, with the remaining $6.0 million to be provided in 1999-2000.

Competition Reform in Energy Markets

Explanation

The Government has earmarked $5.6 million of existing funding over the five years 1998-99 to 2001-03 ($1.5 million in 1999-00) to accelerate competition reforms in energy markets to ensure that the economic and environmental benefits of reform are realised as soon as possible.

Funding was provided as part of the Prime Minister's Statement of 20 November 1997 titled Safeguarding the Future: Australia's Response to Climate Change.

This measure delivers on the Government's election commitment in Minerals to Market.

Extension of the Shipbuilding Production Bounty

Explanation

This measure honours the Government's 1998 election commitment to extend the Shipbuilding Production Bounty to support the development of a stronger and more sustainable Australian shipbuilding industry.

The Government extended the Shipbuilding Production Bounty from 1 July 1999 to 31 December 2000. The Bounty will be payable at a reduced rate of 3 per cent of eligible production costs, with a run down period over three years to 2003.

This measure delivers on the Government's election commitment in Making Industry Stronger and A Stronger Tasmania.

Further Information

For a vessel to be eligible for the Bounty, final contracts need to be in place by 31 December 2000 and the vessel delivered by 31 December 2003. Ships exported to New Zealand are ineligible.

Parliament recently passed the Bounty (Ships) Amendment Act 1999, which allows for the extension of the Shipbuilding Production Bounty. Only shipbuilders registered under the Act are eligible.

Introduce Shipbuilding Innovation Scheme

Explanation

The Government will provide assistance to registered shipbuilders at a rate of 50 per cent of innovation expenditure for up to a total of 2 per cent of eligible production costs. The measure is designed to develop a stronger, sustainable and internationally competitive Australian shipbuilding industry by encouraging product research and development and design innovation.

The Shipbuilding Innovation Scheme applies to eligible research and development (R&D) activities carried out by registered shipbuilders. Eligible R&D expenditure includes adaptive engineering directed at product and process innovation in the shipbuilding industry.

This measure delivers on the Government's election commitment in Making Industry Stronger, and A Stronger Tasmania.

Further Information

Eligible costs may be claimed, provided they are incurred after 30 June 1999 and prior to 1 July 2004, and providing the vessel is completed before 1 July 2004. There will not be any payment on ships exported to New Zealand.

Parliament recently passed the Bounty (Ships) Amendment Act 1999, which allows for the introduction of the Shipbuilding Innovation Scheme. Funding for the measure will be offset from R & D START. See the related expense measure below titled Reallocation in
R & D START Funding.

Reallocation in R&D START funding

Explanation

Following the Government's decision to introduce the Shipbuilding Innovation Scheme from within existing allocations, the Government agreed to reallocate funds from the R&D START Programme, which also provides funding for innovation.

The assistance provided and reallocation of funds meets the Government's 1998 election commitments set out in Making Industry Stronger.

See also the related expense measure above titled Introduce Shipbuilding Innovation Scheme.

Establish Printing Industry Competitiveness Scheme

Explanation

The Government will allow book printers to claim 4 per cent of the purchase price of all paper inputs used in the production of eligible books completed on or after 1 January 1999 but before 1 July 2003.

This measure meets the Government's 1998 election commitment to the printing industry to address the imbalance where average duty of 4 per cent is payable by Australian printers on paper products, while the importation of competing books is tariff free. The Print Industry Competitiveness Scheme will encourage new investment in the industry and secure jobs.

This measure delivers on the Government's election commitment in Making Industry Stronger.

Further Information

To minimise compliance and administrative costs, payment of a lower across the board rate of 4 per cent (average duty paid) on all paper purchases, whether duty is payable or not, is proposed. Book printers will be required to keep records of the use of paper inputs

and may claim back 4 per cent of the purchase price, whether or not the paper was actually imported.

Boosting Australia's Innovation and Science Culture

Explanation

The Science and Technology Awareness Programme is designed to raise community awareness of science and technology issues, to make science and technology interesting to children and to encourage them to undertake a science-based career. The programme includes the Australia Prize which is an international award for an outstanding achievement in a selected area of science and technology promoting human welfare.

The Government will review the Programme for report back in the 2000-01 Budget. Funding of core elements of the programme will be continued pending the review. Funding of $0.8 million for the Australia Prize has been continued for 2000-01, reflecting the significant lead times and the need to call for nominations well in advance.

This measure delivers on the Government's election commitment in A Vision for Excellence.

Continuation of funding for the Pooled Development Funds Programme

Explanation

The Government will provide funding to administer the Pooled Development Funds Programme until 2002-03. The Programme contributes to the development of a stronger, sustainable and internationally competitive Australian industry by developing the market for patient equity capital, including venture capital, for growing small to medium enterprises.

Revenue

Following the completion of a review of the Pooled Development Fund (PDF) programme, the Government has decided to enhance the programme to improve the

effectiveness and attractiveness of PDFs as an investment vehicle, particularly for superannuation funds. The changes more than meet the specific election commitments made by the Government to encourage additional capital raising under the programme and will be effective from the start of the 1999-2000 income year. Specific measures to be introduced are set out below.

• Better define the objective of the programme as `to develop and demonstrate the market for patient equity capital, including venture capital, for growing small and medium sized enterprises and to provide a more competitive tax regime for such investments.'
• Permit widely held Australian superannuation funds and similarly regulated overseas pension funds and limited partnerships of such pension funds, to wholly own a PDF.
• Permit PDFs to buy back their own shares and to return capital to their shareholders, subject to a waiting period of two years for a new or merged PDF, and permit PDFs to make loans to equity investees subject to a maximum of 20 per cent of the PDF's capital base.
• Allow the PDF Registration Board to approve the acquisition of non-transferable options in investee companies as additional investments and to approve the merger of PDFs as long as no cash consideration is paid to shareholders as part of the merger, other than a bona fide dividend.
• Amend the Pooled Development Fund Act 1992 to improve compliance and performance monitoring and to provide the PDF Registration Board with the power to revoke registration for non-compliance with any of the provisions of the Act.
• Change the test that the PDF Registration Board must be satisfied that an applicant for a new PDF `can and will' take certain action in the future to one where the Board must be satisfied that the applicant `is, on the evidence presented, reasonably capable of implementing the plan provided to it.'
• Amend the current definition of the term `associate' to state that it does not apply where the association did not exist prior to the persons becoming shareholders in the PDF.

This measure delivers on the Government's election commitment in Making Industry Stronger.

Further Information

The revenue section of the table shows the future reductions in the revenue associated with the programme enhancements.

Establish a National Strategy for Biotechnology

Explanation

This measure is a cross-portfolio measure affecting both the Industry, Science and Resources and Health and Aged Care portfolios.

The Government will fund the establishment of:

• Biotechnology Australia in the Department of Industry, Science and Resources; and
• a statutory office in the Health and Aged Care portfolio to regulate gene technology and its application on a consistent basis.

Biotechnology Australia will develop a national strategy for biotechnology, a public awareness programme to provide information about biotechnology and gene technology, provide training in the effective management of intellectual property and secure better access to genetic resources and gene collections. It will also support a new Council of Ministers on Biotechnology.

The regulation of gene technology and its applications will operate in close collaboration with existing systems for the regulation of food, agricultural and veterinary chemicals, industrial chemicals and therapeutic goods.

This measure delivers on the Government's election commitment in Primed for Growth.

Further Information

A new Council of Ministers on Biotechnology will be established, consisting of the Ministers for Agriculture, Fisheries and Forestry, Education, Training and Youth Affairs, the Environment and Heritage, Health and Aged Care and Industry, Science and Resources.

Negotiations with the States and Territories will be continued to secure their support and active involvement in the establishment of the statutory office on gene technology and its operations.

Funding for the statutory Gene Technology Office is provided for a two year establishment phase, with cost recovery to be applied once the system is fully operational.

Investment Ready Program

Explanation

In the election statement Making Industry Stronger the Government undertook to develop a new Investment Ready programme. The programme will strengthen the information available to emerging early stage companies about the requirements of potential investors, and also to enhance the abilities of small firms to manage commercialisation of technology and to meet investors' requirements.

The key objective is to increase the level of commercialisation of Australian technology by supporting small firms.

The programme will operate as a new element of the R&D START Programme with up to $20 million over four years being reallocated within the existing R&D START Programme.

This measure delivers on the Government's election commitment in Making Industry Stronger.

Further Information

Extensive consultation has occurred with industry, state and Commonwealth government agencies, the research community, consultants, financiers and operators of technology parks and incubators in all states (March/April 1999). The new programme will become available to firms in the second half of 1999.

Venture Awareness

Explanation

In Making Industry Stronger the Government undertook to establish a new Venture Awareness programme. This programme would establish investment benchmarks on Australian institutional investment in venture capital in Australia and overseas and also assist Australian investment funds to better evaluate venture capital investments in Australia.

The underlying objective of the programme is to encourage increased investment in early stage venture capital by Australian pension funds.

Funding of up to $1 million a year over three years will be available under the programme which will operate as a new element of the R&D START programme (drawing on existing funding).

This measure delivers on the Government's election commitment in Making Industry Stronger.

Institute of Molecular Bioscience

Explanation

In the Government's election statement A Vision for Excellence it was recognised that Australia's research capabilities in biotechnology will be strengthened through funding of $15 million toward the establishment of an Institute for Molecular Bioscience at the University of Queensland.

The Commonweath's funding will be provided through the $1 billion Federation Fund. Actual expenses are estimated to be $0.5 million in 1998-99, $5 million in 1999-2000 and $9.5 million in 2000-01.

The Institute of Molecular Bioscience (IMB) is combined with the CSIRO in a joint complex which is estimated to cost $100 million. The Commonwealth through the Federation Fund, the Queensland Government and the University of Queensland will each contribute $15 million. The CSIRO will contribute $45 million, with further funding coming from a private benefactor.

This measure delivers on the Government's election commitment in A Vision for Excellence.

Further Information

The IMB is a new facility which brings together a number of research organisations, including the Australian Genome Research Facility, under one umbrella. Located at the University of Queensland, it will share a yet to be constructed Molecular Bioscience complex with the CSIRO Division of Tropical Agriculture.

Marine Science Centre

Explanation

The election statement A Vision for Excellence recognised the increasing importance of marine science and committed to the establishment of a new marine science and teaching centre.

The total cost of the Marine Science Centre (MSC) is estimated at $12 million, to which the Federation Fund is the only contributor.

The Commonwealth's funding will be provided through the $1 billion Federation Fund. Actual expenses are estimated to be $2 million in 1998-99, $3 million in 1999-2000, $5 million in 2000-01 and $2 million in 2001-02.

This measure delivers on the Government's election commitment in A Vision for Excellence.

Further Information

The MSC is a joint initiative of the University of New England and Southern Cross University. Located in Coffs Harbour, NSW, the MSC is a research and teaching facility for the marine sciences.

Greenhouse Challenge

Explanation

The Government is providing $27 million of additional funding to the Greenhouse Challenge programme to enable 1000 enterprises to sign agreements to reduce greenhouse gas emissions by 2005.

Funding was provided as part of the Prime Minister's Statement of 20 November 1997 titled Safeguarding the Future: Australia's Response to Climate Change.

This measure delivers on the Government's election commitment in Minerals to Market.

The Treasury Portfolio

Corporate Law Economic Reform Programme

Explanation

This measure will assist the Australian Securities and Investments Commission (ASIC) to develop and implement proposals under the second phase of the Government's Corporate Law Economic Reform Programme (CLERP). This phase (CLERP 7) will focus on reducing the paper compliance burden of Australian companies and enabling ASIC to make greater use of communications technology. It will also look at a fundamental overhaul and review of the large range of paper-based documents that the law still requires companies to lodge.

The key reforms to be introduced under CLERP7 include:

• the establishment of a Business Advisory Board to provide strategic advice on the direction and initiatives of the ASIC information division;
• the introduction of a `no change, no lodge' policy which will provide that, from 1999-2000, companies and registered schemes will not need to lodge an annual return when there has been no change in the information held by ASIC;
• a review of fees set under the Corporations Law with the objective of reducing fees paid by small business and reducing the complexity of fee arrangements; and
• initiatives to assist ASIC in making optimal use of modern business practices and new communications technology.

This measure delivers on the Government's election commitment in Business Law Reform -- Less Red Tape, More Business, More Jobs, Corporate Law Economic Reform Programme (CLERP).

A New Tax System

On 13 August 1998, the Government announced a major taxation reform package, A New Tax System (ANTS). The reforms encompass expense, capital and revenue measures.

Key expenses and capital elements of ANTS include:

• the replacement of financial assistance grants to State and local governments with the revenue from the introduction of the goods and services tax (GST);
• provision of transitional financial assistance to the States to ensure that their budgets are no worse off as a result of the implementation of the reforms to Commonwealth-State financial relations;
• increases in income support and related payments, and income and assets test free areas, which more than offset the price impact of the GST;
• an aged persons savings bonus of up to $1,000 per person and self-funded retirees supplementary bonus of up to $2,000 per person, to help maintain the value of the savings and retirement income of older people;
• a reduction in the income test taper rate applied to pensions, allowing pensioners to earn more income without affecting their benefits;
• increased family assistance in the form of the Family Tax Benefit (equivalent to a doubling of the tax free threshold provided under the Family Tax Initiative), increasing the income test cut-off and reducing taper rates for the Family Tax Benefit;
• a 30 per cent tax rebate/benefit for the cost of private health insurance premiums, introduced on 1 January 1999, to assist families and individuals with the cost of private health insurance;
• provision of up to $500 million to assist with GST startup costs for small and medium businesses; and
• a diesel fuel credit delivered through the GST system to be introduced for registered businesses, removing the need for the Diesel Fuel Rebate Scheme.

As noted above, the 30 per cent rebate/benefit for the cost of private health insurance was introduced on 1 January 1999. The remaining measures will be introduced with implementation of ANTS to begin in July 2000, subject to the necessary legislative changes.

The Commonwealth will also provide a one-year interest-free loan to the States in 2000-01 to offset their financing shortfall in that year arising from the introduction of the GST. The Commonwealth's underlying budget position is not affected by this measure.

Key revenue measures associated with the introduction of ANTS include:

• lower personal income tax;
• introduction of a Goods and Services Tax;
• abolition of Wholesale Sales Tax;
• abolition of nine State taxes; and
• reform of business taxes.

Additional implementation costs of ANTS measures are identified separately below.

The Family and Community Services Portfolio

Tax Reform Package

Explanation

This measure provides for additional departmental resources for the Department of Family and Community Services to deliver improved assistance to families and increased assistance to social security recipients and to administer the Aged Persons Saving Bonuses, as set out under A New Tax System.

This measure covers the full expense to the portfolio of implementing the package, including increased departmental expenses for Centrelink and funds for the creation and operation of a new Family Assistance Office (FAO). The FAO is a joint venture between Centrelink, the Health Insurance Commission and the Australian Taxation Office and will use the existing infrastructure of these agencies.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Tax Reform Package

Explanation

This measure is a cross-portfolio measure affecting both the Family and Community Services and Treasury portfolios.

The Government is providing equity injections to purchase computer and office equipment, and software requirements to support the introduction and implementation of A New Tax System.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

The Treasury Portfolio

Equity injection for A New Tax System initiatives

Explanation

The Government's various reform initiatives under A New Tax System will require the establishment of a legislative basis and supporting administrative systems. These systems will involve the creation of major infrastructure items (eg system for new withholding tax arrangements, Australian Business Number register). The equity injection provided for under this measure will enable the ATO to undertake the capital expenditure necessary to develop this capability.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Additional funding for taxation reform

Explanation

The Government will provide additional funding to the Treasury for the development and implementation of business tax reform, the goods and services tax and other elements of the Government's tax reform package, including developing a response to the Ralph inquiry into business taxation.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Business taxation reform

Explanation

Funding will be provided to the Australian Taxation Office to meet the administrative costs of business taxation reform measures.

The Government has initiated a review of the current arrangements for the taxation of business entities by the Review of Business Taxation (RBT), led by John Ralph. The committee is due to provide final recommendations to the Government by 30 June 1999.

The review is being conducted consistent with the strategy for business tax reform set out in A New Tax System including the development of a new framework for the taxation of business entities.

The resources identified in this measure are interim estimates until the Government makes its decisions following receipt of the final recommendations of the Review in June 1999.

Capital

The Government's reform of business taxation will require the establishment of a legislative basis and supporting administrative systems. The equity injection provided for under this measure will enable the ATO to undertake the capital expenditure necessary to develop this capability.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Fringe Benefits Tax reform

Explanation

Funding will be provided to the Australian Taxation Office to meet the administrative costs associated with the introduction of fringe benefits tax (FBT) reforms.

The four elements of the Government's announced FBT reforms are designed to make the tax system fairer for all Australians:

• improving income tests for surcharges and government benefits by requiring employers, from the 1999-2000 FBT year of income, to identify on group certificates the grossed-up taxable value of an employee's fringe benefits where the taxable value of the benefits exceeds $1,000;
• stopping overuse of the concessional FBT treatment of public benevolent institutions and certain other not-for-profit organisations. This will be done by limiting, for each employee, the value of fringe benefits eligible for concessional treatment to $17,000 of grossed-up taxable value per employee of such organisations. Any amount above this limit will be subject to the normal FBT treatment;
• extending FBT to the benefits in excess of $1,000 a year provided by companies to their shareholders or by trustees to trust beneficiaries, where the benefits are not currently taxed;
• extending the FBT exemption for remote area housing provided by mining industry employers to their employees. This provides the mining industry with the same treatment that applies currently to primary producers.

The first of these elements took effect from 1 April 1999. The last three elements will take effect from the 2000-01 FBT year.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Savings Bonus for Older Australians

Explanation

Funding will be provided to the Australian Taxation Office to meet the administrative costs associated with the provision of a savings bonus as part of Not A New Tax -- A New Tax System.

The Government has decided to pay a one-off bonus to older Australians to compensate them for the impact of the GST on their savings.

The bonus is to be paid on or after 1 July 2000. A claim for a bonus must be made by 30 June 2001. Three different agencies -- the Australian Taxation Office (ATO), the Department of Family and Community Services and the Department of Veterans' Affairs -- will decide on eligibility to a bonus for their respective client groups. ATO clients are those members of the community who have to lodge tax returns for the year ending 30 June 2000. Features of the lump sum payment are as follows:

• a tax free bonus up to $1,000 for those Australian residents aged 60 years or more on 1 July 2000, who have any savings and investment income, and whose total income in 1998-99 or 1999-00 is less than $30,000;
• an additional untaxed bonus of up to $2,000 for self funded retirees of age pension age; and
• these bonuses are eligible to be paid after 30 June 2000.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Binding Oral Advice by the Australian Taxation Office

Explanation

The Government has decided that oral advice provided by the Australian Taxation Office (ATO) to taxpayers with simple tax affairs should be binding on the ATO. Funding will be provided to the ATO to meet the additional administrative costs of this measure.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Further Information

This measure will involve:

• drafting legislation to ensure taxpayers with simple tax affairs can rely on oral advice received from the ATO.
• the introduction of business support tools for staff providing binding oral advice, including the ability to record details of the advice given; and
• formulation and implementation of a communication and education strategy to ensure taxpayers and ATO staff are aware of their obligations. This will include specific publications, brochures and other marketing-related products.

Pay As You Go and New Witholding Arrangements

Explanation

Funding will be provided to the Australian Taxation Office to meet the administrative costs associated with the introduction of the Pay As You Go and new withholding arrangements.

As part of A New Tax System (ANTS) the Government will rationalise the current withholding tax arrangements into a single Pay As You Go (PAYG) scheme. This will replace five existing payments and reporting systems (PAYE, PPS, RPS and provisional tax and company instalments) with a single new comprehensive system, avoiding confusion, potential overlaps and gaps. The reforms will also involve changes to remittance dates.

PAYG will apply a common set of rules to all instalment and withholding events under the taxation law. Similarly, existing income reporting arrangements will be streamlined through the introduction of a simple transaction reporting system. The measure also seeks to ease the administrative costs for small business in complying with tax obligations by introducing one return (or single statement) and one payment, each quarter, for large numbers of taxpayers.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Further Information

The new PAYG arrangements are designed to achieve several aims:

• more closely align income tax payments with current trading conditions or income flows for all entities;
• provide a single payment system for business (and investor) income tax;
• create a flexible system so that taxpayer obligations will be transparent and easily managed, paying income tax and collecting other taxes will become simpler and compliance costs will be reduced; and
• replace PAYE and PPS arrangements with a single withholding system giving businesses certainty about which payments are subject to withholding

Tax Reform price exploitation

Explanation

The Government will provide additional resources until 2001-02 to the Australian Competition and Consumer Commission (ACCC) to monitor retail prices during the transition to A New Tax System.

The ACCC will:

• be given additional transitional powers to monitor retail prices. The ACCC will be required to monitor and report to the Treasurer on instances where consumers have not benefited from reductions in the tax rate, or have been exposed to greater than necessary price rises;
• provide information to the community at large through national television and radio advertising and publication; and
• take enforcement action where appropriate under the new prohibition on price exploitation and related parts of the Trade Practices Act 1974.

The transitional price oversight role for the ACCC will begin 12 months prior to the implementation of A New Tax System and will continue for a further two years after the date of introduction of A New Tax System.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

Australian Business Number

Explanation

Funding will be provided to the Australian Taxation Office (ATO) to meet the administrative costs associated with the introduction of the Australian Business Number (ABN).

The Australian Business Number (ABN) is a key element of the Government's A New Tax System (ANTS) framework. The introduction of the ABN will allow businesses to have a single business identifier for all Commonwealth purposes. This will be more efficient for business and will also provide an important opportunity to improve compliance. The system will also be available to State, Territory and local government bodies to facilitate single entry point arrangements for all government dealings. As such, it will increase levels of service to the business community and reduce compliance costs for business in a whole-of-government environment.

The introduction of the ABN is integral to a number of ATO specific ANTS measures including GST registration and withholding trigger mechanism.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.

The Veterans' Affairs Portfolio

Implementation of Tax Reform Package

Explanation

To facilitate implementation of A New Tax System, the Government will fund changes necessary to the Department of Veterans' Affairs' (DVA) systems. Provision is mainly made for changes to DVA's pension systems and procedures to reflect the provisions of the new tax system, including payment of the aged person's savings bonus.

This measure delivers on the Government's election commitment in Not A New Tax -- A New Tax System.