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2001-02 Budget Paper No. 2

Backing Australia's Ability - Biotechnology Innovation Fund

Expenses ($m)

Explanation

The Government will double present funding for the Biotechnology Innovation Fund programme to $40 million. This measure will increase the flow of Australian biotechnology projects proceeding to commercialisation by helping biotechnology start-up companies demonstrate proof-of-concept, and attract private sector investment. Support will be offered to applicants on a competitive basis.

Backing Australia's Ability - business advice on the regulatory environment

Expenses ($m)

Explanation

The Government will develop an integrated suite of business advice tools and education options to assist innovative firms to understand and operate effectively within the existing regulatory environment.

This assistance will be provided at no additional cost to the Budget. Funding will come from within existing resources provided to the Department of Industry Science and Resources.

Backing Australia's Ability - Expansion of the COMET Programme

Expenses ($m)

Explanation

This measure provides an additional $40 million over four years to extend the Commercialising Emerging Technologies (COMET) programme. COMET provides assistance for the development of management skills, creation of an effective management team, conducting market research, developing intellectual property strategies and developing achievable, realistic business plans. This enables individuals, early growth stage companies and spin-off companies from research institutions to bring their product to market.

Backing Australia's Ability - Expansion of the Cooperative Research Centres Programme

Expenses ($m)

Explanation

The Government will increase support for the Cooperative Research Centres Programme by providing $227 million over three years commencing in 2003-04. The expansion in funding will allow an increased number of centres, larger grants for centres, enhanced opportunities for small to medium enterprises to participate in the programme, and increased collaboration with international research networks.

See also the related expense measure titled Backing Australia's Ability - World-Class Centres of Excellence in the Industry, Science and Resources portfolio.

Backing Australia's Ability - Improvements to the management and awareness of intellectual property

Expenses ($m)

Explanation

The Government will improve the protection of intellectual property, and the awareness and management of intellectual property related issues. This will be done by strengthening the patent system, establishing an internet intellectual property portal, boosting tertiary and research sector awareness activities, introducing a young innovators award scheme and establishing an intellectual property policy research centre. The Government will also require universities to publish a Research and Research Training Management Plan that sets out the universities' intellectual property policies and commercialisation strategies.

This assistance will be provided at no additional cost to the Budget. Funding will come from within existing resources provided to the Department of Industry, Science and Resources.

Backing Australia's Ability - Innovation Access Programme

Expenses ($m)

Explanation

The Government will provide $100 million over five years to fund the Innovation Access Programme. The programme will support a range of collaborative projects including assisting Australian industry to access new technologies and providing support for leading-edge collaborative science, engineering and technology activities under Australia's international Science and Technology Agreements and cooperation programmes.

See also the related expense measure titled Backing Australia's Ability -Innovation Access Programme in the Communications, Information Technology and the Arts portfolio.

Backing Australia's Ability - Major National Research Facilities

Expenses ($m)

Explanation

The Government will fund a new Major National Research Facilities programme totalling $155 million over five years. The programme will invest in national research infrastructure in partnership with State and Territory Governments, universities, and other public and private sector bodies. This measure will provide better access for Australian researchers to world-class, specialised facilities, and attract overseas researchers and firms to Australia. The programme will invite proposals on a competitive basis and will involve the establishment of new facilities and enhancement of existing research facilities.

Backing Australia's Ability - monitoring venture capital investment

Expenses ($m)

Explanation

The Government will monitor domestic and overseas investment in Australian venture capital projects to assess the impact of the new business tax arrangements. Funding will come from within existing resources provided to the Department of Industry, Science and Resources.

Backing Australia's Ability - National Innovation Awareness Strategy

Expenses ($m)

Explanation

The Government will provide $35 million over five years to fund an innovation awareness strategy. The strategy will raise awareness of innovation and the role it plays in our society. The programme will fund business-led innovation awareness initiatives.

See also the related expense measure titled Backing Australia's Ability - National Awareness Strategy in the Communications, Information Technology and the Arts portfolio.

Backing Australia's Ability - 175 per cent premium rate - R&D tax concession

Expenses ($m)

Explanation

The Government will provide $10.6 million over four years to administer a 175 per cent premium R&D tax concession. In addition to the existing 125 per cent R&D Tax Concession, a premium rate of 175 per cent will apply for firms that undertake 'additional' investment in R&D. The premium will focus on components of R&D where the greatest economy-wide benefits would occur.

See also the related expense measure titled Backing Australia's Ability - R&D Start and the related revenue measure titled Backing Australia's Ability - Premium 175 per cent rate for R&D tax concession in the Treasury Portfolio.

Backing Australia's Ability - Pre-seed Fund

Expenses ($m)

Explanation

The Government has decided to establish a Pre-seed Fund of $78.7 million funded over five years. The fund is designed to take new technologies or business proposals to a level where venture capitalists are willing to invest in the seed phase of commercialisation. The Pre-seed Fund will be managed by a private sector fund manager with commercial experience in developing young firms. Assistance through this fund will be open to universities and Government research agencies.

Backing Australia's Ability - R&D Start

Expenses ($m)

Explanation

The Government is providing $534.9 million over five years up to 2005-06 to continue the R&D Start Programme up to 2005-06. The programme is designed to assist Australian industry undertake research and development and commercialisation of new ideas.

See also the related capital measure titled Backing Australia's Ability - R&D Start, the related revenue measure titled Backing Australia's Ability - 175 per cent Premium Rate - R&D Tax Concession and the related revenue measure titled Backing Australia's Ability - 125 per cent effective life write-off for R&D plant in the Treasury portfolio.

Backing Australia's Ability - Rebate for small companies

Expenses ($m)

Explanation

The Government will provide $0.4 million over three years, commencing in 2002-03, to administer a tax rebate equivalent to the 125 per cent R&D Tax Concession to increase the incentive for small firms to invest in R&D. Under this initiative, the Government expects to provide up to 1,300 small companies with support each year.

See also the related expense measure titled Backing Australia's Ability - R&D Start and the related revenue measure Backing Australia's Ability - R&D Tax Concession Cash-out in the Treasury portfolio.

Backing Australia's Ability - World-Class Centres of Excellence

Expenses ($m)

Explanation

The Government will provide funding over five years to establish World-Class Centres of Excellence in research, including an investment of $46 million in biotechnology centres. Of this investment, $24 million will come from an allocation to the Department of Industry Science and Resources, with $22 million from the Australian Research Council. This measure will help build a critical mass in research expertise and develop networks into existing research organisations. The Centres will recruit Australian and overseas research leaders and are expected to attract substantial private sector investment.

See also the related expense measures titled Backing Australia's Ability - World-Class Centres of Excellence in the Communications, Information Technology and the Arts portfolio, Backing Australia's Ability - expansion of the Cooperative Research Centres and Backing Australia's Ability - double funding for national competitive research grants in the Education, Training and Youth Affairs portfolio.

Commonwealth contribution to the Bradman Memorial Fund

Expenses ($m)

Explanation

The Government is providing $0.1 million in 2000-01 to a memorial fund set up in honour of Sir Donald Bradman. The Bradman Memorial Fund was announced after the death of Sir Donald in late February 2001. Donations to the fund will go to the promotion and encouragement of cricket in disadvantaged communities, including indigenous communities.

Commonwealth support of the Prime Minister's XI vs the Aboriginal and Torres Strait Islander Commission Chairman's XI cricket match

Expenses ($m)

Explanation

The Government allocated $0.1 million in 2000-01 to support a cricket match between the Prime Minister's XI and the Aboriginal & Torres Strait Islander Commission Chairman's XI on 19 April 2001 in Canberra as part of Centenary of Federation celebrations.

The funding provided is being absorbed by the Aboriginal and Torres Strait Islander Commission and the Department of Industry, Science and Resources.

Commonwealth support for the 2001 Goodwill Games

Expenses ($m)

Explanation

The Government will provide $3 million in 2000-01 to assist the organisers of the 2001 Goodwill Games in Brisbane to meet the costs of such things as the Volunteer Programme, anti doping measures and the provision of services for the staging of the Games. The Goodwill Games are a major event for the city of Brisbane and, as at the Sydney 2000 Olympic Games, the contribution of volunteers and an appropriate anti doping regime will be integral to the overall success of the Games.

Continued resourcing for the Australian Building Codes Board

Expenses ($m)

Explanation

The Government will extend support for the Australian Building Codes Board, at a cost of $4 million over four years. The Board is the major instrument for achieving the Government's objectives in relation to regulatory reform in the building and construction industry. The Board is also critical in the areas of Greenhouse Gas Emissions in the built environment and Access to Buildings for People with Disabilities.

The Commonwealth provides matching funding on a dollar-for-dollar basis with the States and Territories. The Department of Industry Science and Resources will absorb the cost of this measure.

Continued support for National Recreation Safety Organisations

Expenses ($m)

Explanation

The Government will provide an additional $1.6 million to National Recreation Safety Organisations over four years to help reduce the number of drownings and improve safety in Australia's alpine areas. The funds will be provided to the Royal Life Saving Society of Australia, Surf Life Saving Australia, Austswim and the Australian Ski Patrol Association.

Corporatisation of the Snowy Mountains Hydro-Electric Authority and environmental flows into the Snowy and Murray Rivers

Expenses ($m)

Explanation

The Government will provide $75 million over 10 years until 2011-12 as part of the programme to corporatise the Snowy Mountains Hydro-Electric Authority. This funding will contribute to the establishment of a joint government entity, comprising New South Wales, Victoria and the Commonwealth, which will invest in water savings projects as part of a Government commitment to increase environmental water flows into the Snowy and Murray Rivers.

The new entity will oversight nominated water savings works in specified tributaries and distribution systems from the Murray River. This will ensure no adverse impacts on the water entitlements of irrigators in New South Wales and Victoria, environmental flows in the Murray-Darling System, or the water quality and security of South Australia.

Facilitation of small and medium enterprises - supplier access to major projects

Expenses ($m)

Explanation

The Government will provide $0.4 million in 2001-02 to facilitate access by competitive Australian suppliers at the pre-tender stage to major private and public sector projects.

This measure recognises that managers of major projects have difficulties in identifying Australian firms, especially small and medium sized enterprises, that are capable of fulfilling project requirements. The Department of Industry, Science and Resources will absorb the cost of this measure.

Government response to the Productivity Commission report on general tariffs

Expenses ($m)

Explanation

The Government will spend $13.7 million over three years from 2002-03 to administer the expansion of the current Policy and Project By Laws allowing greater access to tariff exemption for certain industry sectors. This will benefit local manufacturers who import inputs that are unavailable in Australia.

The Government has ensured that major projects benefiting from the new arrangements will offer full, fair and reasonable access to local Australian manufacturers to contracts and tenders.

See also the related revenue measure titled Government response to the Productivity Commission report on general tariffs in the Attorney General's portfolio.

Support for training of automotive industry employees and the development of industry relevant technology

Expenses ($m)

Explanation

The Government is providing $12.5 million over three years, commencing in 2000-01, to Holden under the Strategic Investment Coordination process for training of automotive industry employees and the development of industry relevant technology.

On 13 December 2000, Holden announced that it would invest $400 million to establish a new manufacturing plant to build lightweight, fuel efficient V6 aluminum engines in Victoria. This investment is in addition to the $400 million Holden has committed to capacity expansion, tooling and related manufacturing in South Australia.

The Indigenous Communities/Mining Industry Regional Partnerships Programme

Expenses ($m)

Explanation

The Government will provide funding of $1.2 million over four years to promote partnerships between the mining industry and Aboriginal communities. Key elements of the programme include the publication of case studies setting out the benefits of a partnership approach; regional workshops to promote awareness of best practice; and promotion of indigenous employment. The Department of Industry, Science and Resources will absorb the cost of this programme.

Pricing review of the National Standards Commission

Expenses ($m)

Explanation

The Government has endorsed the outcomes of a pricing review conducted by the National Standards Commission resulting in an increase in the agency's resourcing. The Government recognises that this increased funding is required for the Commission to meet its statutory requirements.

Parliamentary Departments

Additional funding for the Citizenship Visits Programme

Expenses ($m)

Explanation

The Government will provide additional funding for the Citizenship Visits Programme of $0.3 million over three years to meet the increasing demand on the programme from schools.

The Citizenship Visits Programme is a subsidy scheme that assists groups from schools which are located more than 1,000 kilometres from Canberra to visit the Houses of Parliament and participate in the parliamentary education programme.

Additional two Members in Parliament

Expenses ($m)

Explanation

The House of Representatives will increase by two members as a result of the creation of three new electorates and the abolition of one electorate. The change will take effect following the next federal election.

The funding provided over four years will cover both the costs of salaries and allowances for these Members as well as their administrative support costs.

Prime Minister and Cabinet

Informed choices for Australian women

Expenses ($m)

Explanation

The Government will fund the development of a women's community information strategy to improve access to government information for and about women. This programme will be administered through the Office of the Status of Women.

National initiative to combat sexual assault

Expenses ($m)

Explanation

The Government will provide funding of $16.5 million over four years to facilitate a national approach to combat sexual assault against women.

The programme will be administered through the Office of the Status of Women. It will establish partnerships to develop, test and implement strategies to address the incidence of sexual assault in the community. This will include campaigns to promote community awareness.

Women's Development Programme

Expenses ($m)

Explanation

The Government will provide an additional $5.6 million over four years to expand and enhance government support for women's organisations through the establishment of the Women's Development Programme. This will fund targeted research, policy and service development projects and support women's contributions to Government policy formulation. The programme will also support women's capacity building and mentoring activities. This programme will be administered through the Office of the Status of Women.

Women's National Leadership Initiative

Expenses ($m)

Explanation

The Government will fund an extension of Commonwealth activities that are directed at increasing the participation of women in leadership positions and to promote leadership by rural, Indigenous and disadvantaged women. This programme will be administered through the Office of the Status of Women.

Enhanced complaint management for The New Tax System

Expenses ($m)

Explanation

The Government will allocate funding of $0.5 million in each of 2001-02 and 2002-03 to the Office of the Commonwealth Ombudsman to enhance the Ombudsman's role in managing complaints, and contributing to improved administrative processes, related to the introduction of The New Tax System. Equivalent funding previously provided through the Australian Tax Office has been withdrawn.

Reconciliation, Aboriginal and Torres Strait Islander Affairs

Improvement of major infrastructure in the Torres Strait

Expenses ($m)

Explanation

The Government has agreed to the transfer of $15.3 million over the next three years from the Aboriginal and Torres Strait Islander Commission to the Torres Strait Regional Authority to begin the second stage of a 10-year joint Commonwealth/Queensland Government programme to improve major infrastructure in the Torres Strait region.

The second stage of the 10-year environmental health and infrastructure project is expected to improve sewerage, water supplies, roads and solid waste disposal in 17 Torres Strait communities.

Funding is conditional upon agreement being reached with the Queensland Government to provide matching funding.

Pricing review of the Aboriginal and Torres Strait Islander Commission

Expenses ($m)

Explanation

The Government has endorsed the outcomes of a pricing review for the Aboriginal and Torres Strait Islander Commission resulting in a reduction in resourcing of $3.2 million over four years.

The reduction in resourcing reflects a range of improvements to efficiency and effectiveness that were developed as part of the review. The reduction will not result in any change to the quantity or quality of the outputs produced by the Aboriginal and Torres Strait Islander Commission.

Extension of support for Community Housing Infrastructure Programme and Native Title claimants and other Programmes

Expenses ($m)

Explanation

The Government will maintain current Aboriginal and Torres Strait Islander Commission programme funding levels. This will continue existing funding for programmes such as the Community Housing and Infrastructure Programme and support for Native Title claimants. Additional base funding of $66.4 million over four years was initially provided under the terms of a four year Portfolio Funding Guarantee agreed between the Government and the Minister for Reconciliation and Aboriginal and Torres Strait Islander Affairs in the 1997-98 Budget. The Government will provide $16.1 million in 2001-02, $16.4 million in 2002-03, $16.8 million in 2003-04 and $17.1 million in 2004-05. Provision for this funding has already been included in the forward estimates.

Separated indigenous families - Government response to 'Bringing Them Home'

Expenses ($m)

Explanation

The Government will support the Link Up programme for a further four years from 2002-03. This measure will continue the development of a network of dedicated Aboriginal and Torres Strait Islander family tracing and reunion services in each State and the Northern Territory.

The Government will provide additional funding of $2.4 million in 2002-03 and $2.5 million per annum from 2003-04 to 2005-06. Provision for this funding has already been included in the forward estimates.

Transport and Regional Services

Improvements in search and rescue arrangements

Expenses ($m)

Explanation

The Government will provide additional funding to the Australian Maritime Safety Authority of $3.7 million over four years to maintain and improve the Authority's capability to respond to search and rescue incidents. This funding will increase the number of aircraft available to assist in search and rescue operations by sixteen, three of which would be dedicated aircraft with contractual commitments to provide guaranteed response times. This initiative will promote the maintenance of transport links, as the majority of new operators will be in regional locations.

See also the related capital measure titled Improvements in search and rescue arrangements in the Transport and Regional Services portfolio.

Aviation industry compliance

Expenses ($m)

Explanation

The Government will provide additional funding to the Civil Aviation Safety Authority to further improve aviation safety. The additional funding will be used to undertake a Safety Regulatory Improvement Programme, establish a `single point of entry' to the Authority for its clients, and meet the increasing demand for compliance.

This additional funding will be provided over the next four years. The result of the implementation of revised regulations will be a common, single standard for passenger carrying operations, providing an improved level of safety for the fare paying passenger.

As well as $7.6 million provided by the Government, this measure will be funded by an increase in the aviation fuels duties allocated to the Civil Aviation Safety Authority and use of the Authority's accumulated internal cash reserves.

See also related capital measure titled Aviation Industry Compliance in the Transport and Regional Services portfolio and the related revenue measure titled Funding for Aviation Industry Compliance in the Treasury portfolio.

Airservices Australia - Extension of Location Specific Pricing Subsidy

Expenses ($m)

Explanation

The Government will continue the location specific pricing subsidy in 2001-02 and 2002-03 to subsidise Airservices Australia for the provision of control tower services at capital city general aviation and regional airports. Continuation of the subsidy will guarantee the provision of air traffic services at these airports at a price the general aviation industry can bear. The subsidy is a transitional measure, arising from the introduction of location specific pricing for tower services at these airports. This measure will support safety and affordable transport access in regional Australia.

The subsidy will continue to be funded through the excise and customs duty on aviation gasoline and aviation turbine fuels.

See also the related revenue measure titled Airservices Australia - Extension of Location Specific Pricing Subsidy in the Transport and Regional Services portfolio.

Alice Springs - Darwin Railway

Expenses ($m)

Explanation

The Government is providing additional financial support of up to $26.4 million from 2002-03 to 2006-07 for the Alice Springs - Darwin Railway. This additional support is conditional on both matching funding from the Northern Territory and South Australian Governments, as well as an assurance that the additional funding will ensure the commencement of construction of the railway. The funding will be provided in the form of a grant to the Northern Territory Government. This is in addition to funding of $165 million already committed by the Government.

Construction of a new Scoresby Freeway

Expenses ($m)

Explanation

The Government has designated the Scoresby Freeway a Road of National Importance and allocated $220 million to bring forward the construction of a new freeway between Ringwood and Frankston. The new freeway will deliver significant economic benefits to Melbourne by removing severe traffic congestion and reducing travel times for as many as 100,000 vehicles per day.

Additional funding of $40 million will be provided from 2001-02 to 2004-05 to fund this project. The balance of the Commonwealth's contribution will be allocated from the existing National Highway and Roads of National Importance Programmes.

See also the related expense measure titled Roads in outer metropolitan areas in the Transport and Regional services portfolio.

East Coast Very High Speed Train scoping study

Expenses ($m)

Explanation

The Government will provide $20 million for a scoping study to examine the feasibility of an east coast Very High Speed Train network. The proposed network would link Melbourne, Canberra, Sydney, Brisbane and major regional and coastal centres. The study will examine possible routes, technical performance requirements, risk management, patronage, project structure, indicative project costs, economic impact, government involvement and financing.

The Commonwealth has invited Victoria, New South Wales, Queensland and the Australian Capital Territory to participate in the study.

Federal Flood Mitigation Programme

Expenses ($m)

Explanation

The Government will provide additional funding of $30.8 million over four years for the new Federal Flood Mitigation Programme. This programme replaces the Regional Flood Mitigation Programme, and will now include mitigation works in outer metropolitan areas. Eligible mitigation measures include levies, channel improvement works, retarding basins, upgrading and replacement of existing flood structures, flood warning systems and voluntary purchase of flood prone homes.

Total Commonwealth funding under this programme ($10 million per year for the next four years, including existing funding of $9.2 million in 2001-02) will assist State, Territory and Local Governments to reduce the risk of damage caused by floods in rural, regional and outer metropolitan areas of Australia. The Commonwealth will fund one-third of the costs of approved projects.

Flood Recovery Fund

Expenses ($m)

Explanation

In response to the severe flooding in central and northern New South Wales and southern Queensland in November 2000, the Government provided assistance of $10 million in 2000-01 to establish the Flood Recovery Fund. Access to the fund was extended to communities on the north coast of New South Wales affected by flooding in March 2001. This Fund provides short-term support to rural and regional communities in affected areas. Assistance was available for reinstatement and reconstruction of community facilities, clean-up of public and community facilities, and grants to community service organisations to assist with additional demand and services.

Newcastle Structural Adjustment Fund

Expenses ($m)

Explanation

The Government will contribute an additional $0.7 million in 2000-01 to support projects that create new and permanent jobs in Newcastle. The Newcastle Structural Adjustment Fund was established in 1997-98, in response to the closure of BHP Steel in Newcastle. The Fund is used to support projects that generate long-term employment in the Newcastle region.

Roads in outer metropolitan areas

Expenses ($m)

Explanation

The Government will provide increased funding of $400 million over four years to the National Highway and Roads of National Importance Programme to improve road infrastructure on the fringes of the capital cities. Funding will target road projects which develop key arterial link roads in outer metropolitan areas.

See also related expense measure Construction of a new Scoresby Freeway in the Transport and Regional Services portfolio.

Roads to Recovery Programme

Expenses ($m)

Explanation

The Government will provide increased funding of $1.2 billion from 2000-01 to 2004-05 ($150 million in 2000-01) through the new Roads to Recovery Programme for the construction, upgrade and maintenance of roads. Of this total, over $850 million will be spent in rural and regional Australia.

Funding will be distributed directly to local government, with allocations between the States and Territories based on a calculation using local road length and population. Funding allocations within each State are based on current allocations of financial assistance grants for local roads.

Roads to Recovery Programme funding for the Indian Ocean Territories and unincorporated areas

Expenses ($m)

Explanation

The Government has extended the scope of the Roads to Recovery Programme to Christmas and Cocos (Keeling) Islands in the Indian Ocean Territories and to unincorporated areas in South Australia, New South Wales and Victoria not governed by local government authorities. This measure ensures that the Government's commitment of increased funding for local roads is available to all areas of Australia.

Savings from the upgrade of Mainline Interstate Railway Track Programme

Expenses ($m)

Explanation

The Government has decided that $111 million originally allocated to this programme will be returned to the Budget in 2001-02. This decision reflects the lack of success to date in securing satisfactory progress with New South Wales on rail reform; a precondition for additional funding for rail track improvements in New South Wales. The Government will continue to pursue rail track initiatives in New South Wales through its wholly owned business, the Australian Rail Track Corporation.

See also the related capital measure titled, Australian Rail Track Corporation - equity funding in the Transport and Regional Services portfolio.

Upgrade of Canberra Airport

Expenses ($m)

Explanation

The Government is providing a grant of $8.8 million in 2000-01 to upgrade the airport to enable wide-bodied VIP aircraft to land in Canberra. This upgrade will allow visiting guests of Government who use private wide bodied aircraft to fly directly to Canberra.

Treasury

Pricing review of the Australian Competition and Consumer Commission

Expenses ($m)

Explanation

The Government will provide the Australian Competition and Consumer Commission with additional funding to maintain service delivery standards and to improve service delivery in priority areas such as e-commerce and rural and regional issues.

Australian Securities and Investments Commission - supplementary funding for HIH investigation

Expenses ($m)

Explanation

Additional funding of $5 million over two years will be provided to the Australian Securities and Investments Commission to assist it with its investigation of the HIH Insurance Group, and any resulting prosecutions. This additional funding will supplement the Commission's existing enforcement budget, and not act as an upper limit.

Financial Services Reform implementation

Expenses ($m)

Explanation

The Government has provided the Australian Securities and Investments Commission with transitional funding of $2.6 million to enable it to prepare for the implementation of the major reforms to the regulation of financial products, service providers, intermediaries and markets announced as part of the Corporate Law Economic Reform Programme. The reform programme will provide for a single, harmonised licensing and product disclosure framework.

Managed Investments

Expenses ($m)

Explanation

The Government will extend Managed Investments transitional funding for one year by $2.9 million. This will allow the Australian Securities and Investments Commission (ASIC) to maintain an enhanced level of regulation of managed investment funds while a review is undertaken of the Managed Investments Act 1998 during 2001-02. The Managed Investments Act 1998 provides an enhanced regime for managed investments, which includes their licensing and involves ASIC monitoring their operations, investigating and taking action in the event of a breach of the law.

Superannuation Complaints Tribunal

Expenses ($m)

Explanation

The Government has increased the ongoing level of funding for the Superannuation Complaints Tribunal (SCT) by $0.7 million per annum to restore its determinative role in resolving disputes between superannuation fund members and the funds. Funding for the SCT was reduced in 1998-99 following Federal Court judgements in 1997 and 1998 curtailing the tribunal's functions. The High Court restored full powers to the tribunal on 17 June 1999.

See also the related revenue measure Superannuation Complaints Tribunal in the Treasury portfolio.

Education campaign and other information initiatives for choice of superannuation fund and related measures

Expenses ($m)

Explanation

The Government will allocate $14 million over two years to the Australian Taxation Office to implement an education and communication campaign and other information initiatives for the Government's choice of superannuation fund and related measures. The choice of superannuation and related measures will make it easier for employees/members to select their own superannuation fund and to pursue their own needs within the superannuation system.

The Australian Taxation Office will absorb the cost of implementing the education and communication campaign and other information initiatives.

Simplification of Business Activity Statements

Expense ($m)

Explanation

The Government will provide the Australian Taxation Office (ATO) with funding of $52 million over two years to fund development and implementation of simplified Business Activity Statements and Instalment Activity Statements. It is expected that $14 million will be spent in 2000-01. The funding will also cover an information and communications campaign to inform taxpayers about the simplified reporting arrangements.

Additional funding for the First Home Owners Scheme - new homes

Expenses ($m)

Explanation

The Government is providing an estimated $150 million, $60 million of which has already been paid to the States and Territories, to increase the First Home Owners Scheme grant from $7,000 to $14,000 for eligible first home owners contracting between 9 March 2001 and 31 December 2001 to buy or build a new home. The grant will remain at $7,000 for first home owners who purchase existing homes.

Consumer Information Programme

Expenses ($m)

Explanation

The Government will allocate $1.9 million over four years to extend the Consumer Information Programme. The measure will provide consumer information by building on the `one-stop-shop' approach of http://www.consumersonline.gov.au. It will also fund the provision of targeted information in areas such as disadvantaged consumers and product safety.

The Department of the Treasury will absorb the cost of this measure.

Funding for Secretariat support to the fuel tax inquiry

Expenses ($m)

Explanation

The Government will provide funding of $4 million in 2001-02 for secretariat support to the Inquiry into the total structure of fuel taxation in Australia announced by the Prime Minister on 1 March 2001. The funding will provide for salary and administrative expenses of the Inquiry Secretariat to be located in Treasury.

GST - Allowing entities with substituted accounting periods to lodge GST returns quarterly

Expense ($m)

Explanation

Entities using substituted accounting periods will be able to lodge GST returns on a quarterly basis subject to the existing $20 million annual turnover threshold and election rules, from the first quarterly period of the 2001-02 income year. Previously, entities using substituted accounting periods were required to submit their GST returns monthly. The measure was introduced into Parliament on 5 April 2001 and will take effect on 1 July 2001.

While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).

Further Information

Further details may be found in the Explanatory Memorandum to the Taxation Laws Amendment Bill (No. 3) 2001.

GST - Allowing full input tax credits for motor vehicles

Expense ($m)

Explanation

GST registered businesses will be entitled to full input tax credits for motor vehicles, including trucks, acquired after midnight Budget night, 22 May 2001.

Since GST revenue is paid to the States and Territories and this will diminish such revenue the Commonwealth will be obliged to pay this sum to the States under transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).

Further information

Under The New Tax System, wholesale sales tax, generally 22 per cent on vehicles, was replaced with 10 per cent GST, leading to lower tax. GST registered businesses are able to claim back the GST they pay on inputs used to make taxable and GST-free supplies. Businesses able to claim input tax credits would go from 22 per cent WST to no tax at all. The Government was concerned to minimise the disruption to the market that could have occurred if businesses were to defer purchasing motor vehicles in anticipation of these cost reductions. Accordingly, the A New Tax System (Goods and Services Tax Transition) Act 1999 included provisions to phase in input tax credits for motor vehicles. Input tax credits for new vehicle purchases were denied for the first 12 months of the GST, 50 per cent input credits were to be allowed in the second year of operation from 1 July 2001 and full input tax credits were to be available from the third year onwards.

The measure will pull forward the start date for full input tax credits from 1 July 2002 to midnight Budget night, 22 May 2001. The measure should reduce the cost of motor vehicles to businesses by around 9.1 per cent, compared to prices before 1 July 2000.

GST - Flexible administration of GST errors

Expense ($m)

Explanation

This measure ensures that the Commissioner of Taxation has the discretion to provide taxpayers with simpler ways to correct errors in GST returns. It reinforces existing practice whereby taxpayers have been remedying GST errors made in a Business Activity Statement (BAS) by making a compensating change in the next BAS. This avoids the need for taxpayers to submit an amended BAS for an earlier period. The measure was announced on 5 April 2001 and has effect from 1 July 2000.

While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).

GST - GDP-adjusted method for calculating GST remittances

Expense ($m)

Explanation

GST-registered taxpayers with turnover of $2 million or less generally have the option to pay quarterly GST instalments worked out for them by the Australian Taxation Office (ATO) using the GDP-adjusted method. Furthermore, certain primary producers and special professionals (such as authors, entertainers and sportspersons) who opt for the GDP-adjusted method pay two GST instalments in respect of each income year, with the instalments corresponding with the third and fourth quarters of the income tax year.

This measure was announced on 22 February 2001 and applies to tax periods ending on or after 22 February 2001.

While all GST revenue is paid to the States and Territories, the cost of this measure is effectively borne by the Commonwealth through transitional funding guarantee arrangements. (See Budget Paper No. 3 for further information).

Further information

Taxpayers who choose this option will pay quarterly instalments but will only have to submit one annual GST return, due not later than the time they submit their annual income tax return (or 28 February 2002 for the current year). Those taxpayers will receive customised instalment forms from the ATO that reduce information reporting requirements, particularly in respect of other taxes that do not apply. For the 2000-01 year, where it is not yet possible to base the third and fourth instalments on an annual GST amount, the instalments will be an amount equal to the second quarter BAS.

For cases where previous year's adjusted payments are not suitable, provisions to vary the instalments advised by the ATO are available. To ease the transition to this system for taxpayers who elect to vary their payments, there will be a one-off 25 per cent margin for error instead of 15 per cent in the September 2001 quarter.

Further details may be found in the Explanatory Memorandum to the Taxation Laws Amendment Bill (No. 3) 2001.

HIH Policyholder Hardship Assistance

Expenses ($m)

Explanation

The Government will provide financial assistance to certain policyholders and beneficiaries with claims referable to the provisional liquidation of the HIH Insurance Group. Such assistance will be limited to those in genuine financial hardship in certain policy classes. The assistance will exclude those policies covered by State and Territory administered schemes. A provision for cash expenditure in excess of $0.5 billion over the next four years has been made.

Information and implementation of 1 July 2001 tax changes

Expenses ($m)

Explanation

The Government will provide funding of $5 million in 2001-02 for communication to inform the public of the significant changes in the tax system so as to make taxpayers aware of benefits they can claim, in particular, eligibility to claim excess imputation credits paid to resident individuals, certain charitable and gift deductible organisations and complying superannuation funds, and entitlement to the removal of fees on financial transactions.

Renewed funding of Axiss Australia

Expenses ($m)

Explanation

The Government will renew funding of $11.4 million over the next three years, for Axiss Australia. Axiss Australia is a division within the Department of the Treasury that promotes Australia as a Centre for Global Financial Services. The funding will enable Axiss to continue to promote Australia's advantages, through marketing and facilitation, as a location to conduct financial services business.

Continued funding for legal matters relating to Part IIIA of the Trade Practices Act 1974

Expenses ($m)

Explanation

The Government has provided $1.2 million over four years to the National Competition Council to fund any legal proceedings relating to recommendations by the Council on the coverage of access arrangements under Part IIIA of the Trade Practices Act 1974.

National Competition Policy communication and education

Expenses ($m)

Explanation

The Government has extended the funding for the National Competition Council's communication and education programme by $0.8 million over four years. The measure will fund community information papers, participation and promotion at industry and education conferences and the production of other briefing and information related to competition policy.

Veterans' Affairs

Australian Memorials in London and Crete

Expenses ($m)

Explanation

The Government will establish, construct and maintain memorials in London and Crete.

The London memorial will fulfil the Prime Minister's joint commitment with the British Prime Minister, made during the Centenary of Federation visit to London in July 2000, to establish an Australian memorial in London to honour those Australians who served and died alongside Britons in both World Wars.

In conjunction with the 60^th anniversary of the Greece and Crete campaigns a commemorative memorial will be established on Crete to honour the more than 18,000 Australians who served in the campaigns, the 594 who died, 1,001 wounded and 5,132 taken prisoner of war.

Maintain Rural and Remote Service Delivery arrangements

Expenses ($m)

Explanation

The Government will continue the current programme of agency arrangements in rural and remote areas. Agency arrangements, which use other Commonwealth, State and local organisations to deliver information and assistance to the veteran community in regional areas, were initially implemented in 1997-98. These arrangements allow veterans to access information and services in areas where the Department of Veterans' Affairs is unable to provide the service directly.

Make a one-off payment of $25,000 to those former PoWs and civilian internees and detainees of the Japanese or their surviving widows/ers

Expenses ($m)

Explanation

The Government will provide a one-off payment of $25,000 each to Australian Defence Force veterans who were held as prisoners of war of Japan and Australian civilian internees and detainees of the Japanese. If the eligible recipient was no longer living at 1 January 2001 the payment will be made to their surviving spouse.

The measure will cost $247.8 million and is intended to be made in 2000-01. The payment itself will be non-taxable, exempt under the lump sum income testing rules and will be classified as an exempt asset under the assets test. The deeming rules will apply to the payment.

Output Pricing Review - reduction in treatment population

Expenses ($m)

Explanation

The Government has endorsed the outcomes of a pricing review for the Department of Veterans' Affairs. The review identified areas where savings could be made.

Reductions in the department's treatment population will generate savings in Departmental resourcing. In order for the department to manage the reforms to their business, the department will retain savings in each of the budget and forward estimates years.

The reduction will not result in any change to the quantity or quality of outputs produced by DVA. The agreed funding includes estimated reductions to the quantity of DVA's outputs resulting from the reduction to DVA's treatment population over the forward estimates period.

Output Pricing Review - review of efficient delivery of outputs

Expenses ($m)

Explanation

The Government has endorsed the outcomes of a pricing review for the Department of Veterans' Affairs (DVA). The review identified areas where savings could be made.

The savings from DVA's Review of efficient delivery of outputs focused on savings from DVA's Corporate Services Review as a means to deliver savings without affecting the quality of outputs to veterans. DVA's base funding will be reduced by $1.5 million in 2002-03, $4.0 million in 2003-04 and $7.0 million in 2004-05. An important element of the Review was the collection of performance information from a range of providers to identify and promote better practices in the delivery of government services.

In order for the department to manage the reforms to their business, equity funding of $5.5 million in 2001-02 and $2.2 million in 2002-03 is provided. Of these amounts $3.9 million in 2001-02 and $1.5 million in 2002-03 represent expenses relating to the business reforms. The remainder of the equity funding relates to the extinguishing of liabilities and has no impact on expenses.

The reduction in resourcing reflects a range of improvements to efficiency and effectiveness that were developed as part of the review and will not result in any change to the quantity or quality of the outputs produced by DVA.

See also related capital measure Output Pricing Review - Review of Efficient Delivery of Outputs in the Veterans' Affairs portfolio.

Provide full access to the Repatriation Pharmaceutical Benefits Scheme for British, Commonwealth and Allied Veterans aged 70 years and over with World War II qualifying service

Expenses ($m)

Explanation

The Government will extend full access to the Repatriation Pharmaceutical Benefits Scheme (RPBS) to all British, Commonwealth and Allied Veterans aged 70 years and over with World War II qualifying service (consistent with requirements for the service pension).

This initiative will give British Commonwealth and Allied veterans access to pharmaceutical items at the concessional rate including the additional items which are on the RPBS and not on the Pharmaceutical Benefits Scheme.

A reduction in expenses for the Department of Health and Aged Care results due to the transfer of pharmaceutical expenses for these veterans from the Pharmaceutical Benefits Scheme to the RPBS.

This is a cross portfolio measure between the Department of Health and Aged Care and the Department of Veterans' Affairs.

Reduce overpayments and improve debt recovery

Expenses ($m)

Explanation

The Government will reduce the incidence of overpayment and improve debt recovery by focussing on areas of high payment risk. Based on statistical and other available information, payments made to veterans and service providers will be reviewed with the aim of improving payment processes to ensure that monies are paid appropriately.

See also the related capital measure Reduce Overpayments and Improve Debt Recovery in the Veterans' Affairs portfolio.

Residential Care Development Scheme

Expenses ($m)

Explanation

The Government will continue funding for the Residential Care Development Scheme for one year, demonstrating its commitment to the best possible residential care services for the veteran community. The scheme supports the improvement of residential care facilities run by ex-service organisations to meet certification and accreditation standards.

The Scheme helps both ex-service organisations and community based organsiations, where there is an identified direct benefit to the veteran community, to improve access of entitled veterans and their widow(er)s to high quality residential aged care services and Community Care packages.

Restore War Widows Pensions relinquished upon remarriage prior to 1984

Expenses ($m)

Explanation

The Government will restore war widows' pensions to approximately 3,000 widows who remarried prior to May 1984 and lost eligibility for war widows' pension as a consequence.

This measure addresses a long-standing anomaly and ensures that all war widows will be treated in a fair and consistent manner. Those war widows who remarried prior to May 1984 will now be eligible for war widows' pensions, and any associated allowances as well as full repatriation health care entitlement (the Gold Card), in the same manner as those widows who remarried after May 1984.

War widows currently receiving pensions or entitlements through the Department of Family and Community services will be transferred to the Department of Veterans' Affairs, resulting in reduced expenses for the Department of Family and Community Services.

The transfer of responsibility for Health Care for war widows from the Department of Health and Aged Care to the Department of Veterans' Affairs results in reduced expenses for that portfolio.

This is a cross portfolio measure between the Department of Health and Aged Care, the Department of Veterans' Affairs and the Department of Family and Community Services.