Part II: Expense measures (continued)

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• Industry, Tourism and Resources
• Prime Minister and Cabinet
• Transport and Regional Services
• Treasury
• Veterans' Affairs

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Industry, Tourism and Resources

Further funding for the Australian Tourist Commission

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Tourist Commission	6.0	4.0	4.0	4.0

Explanation

The Government has committed an extra $24 million over five years, including $6 million in 2001-02, in funding for the Australian Tourist Commission (ATC). Funding will be targeted at increasing visitor numbers by promoting Australia as an international tourist destination. Base funding for the Australian Tourist Commission is around $90 million.

Additional funding for the See Australia Domestic Tourism Initiative

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	1.5	1.5	2.5	2.5

Explanation

The Government will build on the successful See Australia Domestic Tourism Initiative by providing additional funding of $8 million over 4 years. See Australia is a promotional campaign that was launched in November 2000 and is designed to encourage Australians to travel domestically.

Assistance to Methanex Corporation

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	20.0	65.0	-	-

Explanation

The Government will provide a strategic investment of $85 million over two years to the Methanex Corporation to develop multi-user infrastructure on the Burrup Peninsula of Western Australia and to undertake research and development into advanced syngas technology in partnership with industry and Australian research bodies.

Assistance to Mitsubishi Motors Corporation

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	35.0	-

Explanation

Subject to certain conditions, the Government will provide Mitsubishi Motors Corporation with $35 million in assistance in 2004-05. The assistance recognises the major new investment in its Adelaide plant and is conditional on the establishment of a global research and development centre in Adelaide. The investment and research and design centre will assist the integration of Mitsubishi's Australian operations into Mitsubishi's global operations.

Assistance to Rio Tinto to commercialise new iron smelting technology

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	50.0	50.0

Explanation

The Government will provide $125 million over three years commencing in 2004-05 (including $25 million in 2006-07) to Rio Tinto under the Strategic Investment Coordination process. Rio Tinto will commercialise the HIsmelt iron smelting technology at Kwinana, Western Australia.

Australian Stockman's Hall of Fame and Outback Heritage Centre

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-
Department of Transport and Regional Services	-	-	-	-
Total	-	-	-	-

Explanation

The Government provided $4 million in 2001-02 to the Australian Stockman's Hall of Fame and Outback Heritage Centre for improvements to the centre and its displays. This funding will help the centre to maximise the heightened interest in remote Australia expected to flow from the Year of the Outback Promotion.

The Department of Transport and Regional Services will absorb $2 million of the cost of this initiative within existing resources.

Back of Bourke Exhibition Centre

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-

Explanation

The Government provided $1 million in 2001-02 to the Back of Bourke Exhibition Centre to support the development of a flood river pavilion, structures and displays, a café; and marketing. The centre is intended to boost regional tourism and maximise interest in remote Australia following the Year of the Outback promotion.

Cairns Foreshore Promenade Development project

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	2.0	2.0	2.0	3.0
Department of Transport and Regional Services	-2.0	-2.0	-	-
Total	-	-	2.0	3.0

Explanation

The Government will contribute $9 million to the development of the Cairns Foreshore. The project will provide a tourism precinct and includes the development of an Environmental Interpretive Centre, a Heritage Centre, and a Pacific Rim Forum.

This measure will be fully offset in 2002-03 and 2003-04 by reductions in existing resources in the Department of Transport and Regional Services.

Derby Hydrogen Tidal Study

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	0.7	0.3	-	-

Explanation

The Government will provide $1 million to study the potential for a hydrogen industry derived from the tidal changes of the Derby region of Western Australia.

Development of a National Offshore Safety Authority

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	2.5	-	-

Explanation

The Government will provide $6.1 million over three years from 2002-03 to establish a National Offshore Safety Authority. The authority is proposed as a joint agency covering both Commonwealth and State/Northern Territory coastal waters. The $3.6 million in departmental costs of the programme are being fully absorbed within the existing resourcing of the Department of Industry, Tourism and Resources.

Fishing Hall of Fame and World Heritage Fraser Island Interpretive Centre Project

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-

Explanation

The Government provided $3 million in 2001-02 to the Fishing Hall of Fame and World Heritage Fraser Island Interpretive Centre Project. This will help provide an additional major tourism focus for the Fraser Coast.

Funding is conditional on matching funding from the Queensland Government and local community.

Funding for the Travel Compensation Fund

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-

Explanation

The Government provided $5 million in 2001-02 to the Travel Compensation Fund to compensate consumers who purchased a holiday package from a licensed travel agent and lost the value of that package due to the Ansett collapse. Funding of this measure is dependent on state and territory governments providing matching funding.

Increased funding for the Regional Tourism Programme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	1.5	1.5	2.5	2.5

Explanation

The Government will provide additional funding of $8 million to the Regional Tourism Programme. This builds on funding of $2 million in 2002-03. The programme provides grants to business enterprises and other organisations that deliver tourism attractions, products and services in regional Australia.

Increased industry assistance to small and medium enterprises

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	3.1	-	-	-

Explanation

This proposal implements part of the Government's September 2001 Small Business Package. The Government will provide $3.1 million for a range of initiatives including funding for the Industrial Supplies Office Network (ISONET), the Supplier Access to Major Projects Program (SAMP) and other activities to enhance the range of services offered to small business when competing for major projects.

Invest Australia - investment promotion and attraction

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	11.0	11.0	11.0	11.0

Explanation

The Government will provide additional funding of $44 million to support the investment attraction role of Invest Australia as part of the Government's response to the Winning Investment - Strategy, People and Partnerships report.

Mentor Resources

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	0.1	0.1	0.1	-

Explanation

The Government will provide an additional $150,000 to assist Mentor Resources of Tasmania to continue to match volunteer mentors to small businesses and to enable this initiative to be trialed elsewhere in Australia.

Rationalisation of assistance to the printing industry

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-10.3	-8.9	-	-

Explanation

The Government will end the Printing Industry Competitiveness Scheme (PICS) and the Enhanced Printing Industry Competitiveness Scheme (EPICS), delivering $25 million in savings (including $5.8 million in 2001-02). All claims lodged under PICS before the announcement of the termination of this scheme for paper to be used in production runs by 30 June 2002 will be processed and paid as normal. All proposals for EPICS grants approved before the announcement of the termination of this scheme will be processed and paid as normal.

Rationalisation of assistance to the Textiles, Clothing and Footwear (TCF) industry

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-11.0	-6.9	-4.9	4.6

Explanation

The Government will end funding for the TCF Market Development Programme, the National Framework for Excellence in Education and Training in TCF and the TCF Technology Development Fund with a saving of $21.5 million over five years (including $3.3 million in 2001-02). Funding for the TCF Strategic Investment Program Scheme will remain unaltered at $678 million, however $4.6 million will be reprofiled from 2002-03 to 2005-06.

Rationalisation of assistance to the tourism industry

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-0.5	-0.5	-0.5

Explanation

The Government will end the Tourism Operations Program with effect from 2003-04, delivering ongoing savings of $0.5 million per annum. These funds will be used to support other initiatives in the Industry, Tourism and Resources portfolio.

Rationalisation of funding for international organisations contributions

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-0.2	-0.2	-0.2

Explanation

The Government will end the Contributions to International Organisations - Minerals Programme from 2003-04, delivering ongoing savings of $0.2 million per annum.

Signage for Magnetic Island

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-

Explanation

The Government will provide $0.2 million in 2002-03 to fund signage for Magnetic Island. This measure is being fully absorbed within the existing resourcing of the Department of Industry, Tourism and Resources.

Small Business Assistance Programme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	8.9	10.0	10.0	10.0

Explanation

The Government will provide a total of $60 million over the next four years to fund the Small Business Assistance Programme (SBAP). As part of this initiative the Government will allocate $24 million to enable the continuation of the Small Business Assistance Officers that help facilitate small business' access to Commonwealth Government programmes and assistance. The remaining $36 million is additional funding for Small Business Incubators (to provide advice and premises for newly formed firms) and the Small Business Enterprise Culture programmes (skills development) which now form the SBAP.

Provision for funding of $21.1 million has already been included in the forward estimates.

Tasmanian regional tourism infrastructure initiatives

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	0.5	0.6	0.4	-

Explanation

The Government will provide a total of $2.1 million (including $0.6 million in 2001-02) for regional tourism infrastructure initiatives in Tasmania. The initiatives funded in 2001-02 are the Low Head Tourism Precinct ($0.5 million) and the Mersey River Foreshore Upgrade ($0.1 million). The infrastructure projects to be undertaken from 2002-03 include Cataract Gorge Reserve, North East Tourist Information Centre, Burnie Rail Project, Kingston Pier and Ringarooma Church.

Wine Industry Programme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Industry, Tourism and Resources	-	-	-	-

Explanation

The Government will provide $0.5 million over three years from 2002-03 for a strategic plan for the wine industry and an independent review covering wine exports and wine tourism. This measure is being fully absorbed within the existing resourcing of the Department of Industry, Tourism and Resources.

New geoscience funding for securing Australia's oil supply

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Geoscience Australia	7.0	-	-	-

Explanation

The Government will provide $8.5 million in 2002-03 to continue Australia's Precommercial Oil Exploration Programme. A review will be held over this time to investigate options and determine the longer term future for the programme. Geoscience Australia will absorb $1.5 million from existing resources.

Prime Minister and Cabinet

Enhanced complaint management by the Ombudsman's office

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Office of the Commonwealth Ombudsman	0.1	0.3	0.3	0.3

Explanation

The Government will provide additional funding of $1 million to the Office of the Commonwealth Ombudsman to manage additional functions conferred upon the Ombudsman in relation to certain law enforcement agencies and to further investigate immigration-related complaints.

This measure will strengthen the Ombudsman's role in ensuring the accountability of Commonwealth departments and their actions.

Transport and Regional Services

Artificial Reef Mackay

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	-	-	-	-

Explanation

The Government will provide $0.3 million in 2002-03 towards the construction of three artificial reefs on the Mackay coast. The artificial reefs will benefit the Mackay region through increased tourism and enhanced employment opportunities that will result. The contribution will be provided from existing funding for the Regional Solutions Programme.

Commonwealth contribution to the construction of the Lismore flood levee

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	-	-	-	-

Explanation

The Government will provide $4 million in 2001-02 to accelerate the construction of the Lismore flood levee and reduce the time required from six to three years. The levee will redirect flood waters to prevent the flooding of homes and businesses. The $4 million funding will be provided from within the Flood Recovery Fund and the Flood Assistance Package Small Business Grant Programmes.

Commonwealth contribution to the New South Wales Bushfire Relief Appeal

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	-	-	-	-

Explanation

The Government contributed $1 million in 2001-02 to the Christmas 2001 Bushfire Relief Appeal, which was established by the New South Wales Government to assist people affected by the fires during the Christmas period. The commitment made by the Commonwealth Government matches the contribution announced by the New South Wales Government.

Construction of the Bert Hinkler Hall of Aviation Museum

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	1.5	-	-	-

Explanation

The Government will provide $1.5 million towards the construction of the Bert Hinkler Hall of Aviation Museum in Bundaberg. The museum will provide an economic and employment boost for the Bundaberg region through increased tourism by providing the focus for future national and local aviation related events.

East Coast Very High Speed Train scoping study

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	-5.0	-	-	-

Explanation

The Government previously commissioned a scoping study to assess the viability of a passenger only East Coast Very High Speed Train. The stage one preliminary study was completed in 2001-02 and found that construction of an East Coast Very High Speed Train Network would cost in the range of $33 billion to $59 billion. The preliminary study estimated that government would be required to fund 80 per cent of construction costs, for a low public benefit. Given these results, the study was concluded in March 2002, generating savings of $17.7 million over two years ($12.7 million in 2001-02 and $5 million in 2002-03).

Enhancement of the Bass Strait Passenger Vehicle Equalisation Scheme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	3.6	3.7	3.9	4.0

Explanation

The Government will provide additional funding of $15.2 million to enhance the Bass Strait Passenger Vehicle Equalisation Scheme. The additional funding will replace the seasonal rebate with a flat $150 each way rebate for passenger vehicles and introduce a rebate of $150 each way for caravans, motor homes and the vehicles of people with disabilities who are unable to accompany their vehicle by sea.

Extension of the Federal Road Safety Black Spot Programme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	45.0	45.0	45.0	45.0

Explanation

The Government will provide funding of $180 million to extend the Federal Road Safety Black Spot Programme. The programme reduces the number of road accidents and their social and economic costs through the identification and cost effective treatment of dangerous locations on Australia's roads. Fifty per cent of funds will be directed to projects in rural and regional Australia.

Feasibility study for the Gold Coast Light Rail Project

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	0.7	-	-	-

Explanation

The Commonwealth will contribute funding of $0.7 million towards a feasibility study into the Gold Coast Light Rail Project. The study is considering a possible light rail system from Helensvale to Broadbeach. The study will be managed jointly by the Queensland Government and the Gold Coast City Council, with the Queensland Government matching the Commonwealth's financial contribution.

Further Commonwealth contribution to the New South Wales bushfires

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	-	-	-	-

Explanation

The Government provided $0.8 million in 2001-02 to the New South Wales Government for the costs for transporting two helitankers to Australia to assist in fighting the Christmas 2001 New South Wales bushfires. These two helitankers complement the one already contracted by the Victorian Government. The helitankers significantly bolstered aerial firefighting capability and substantially assisted efforts over a ten week period during the bushfire season.

National Highway and Roads of National Importance

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	13.0	26.2	27.7	70.7

Explanation

The Government will provide increased funding of $137.6 million to the National Highway and Roads of National Importance Programme. The additional funding will be used to upgrade the National Highway System, and to assist the states to upgrade important freight arteries that feed into the National Highway System. Regional communities will benefit through improved road access, greater road safety and improved road transport efficiency.

Payment scheme for Airservices Australia's enroute charges

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	6.0	6.0	6.1	-

Explanation

The Government has decided to pay air traffic control charges imposed by Airservices Australia on regional airline aircraft with a maximum takeoff weight of 15 tonnes or less. The payment of these charges by the Government will save the industry $2.9 million in 2001-02. The scheme, which came into effect on 1 January 2002 and will continue until June 2005, will assist many regional operators who are facing financial difficulties. It also applies to aircraft used by aeromedical operators such as the Royal Flying Doctor Service.

Waterfront asbestos - related injury compensation

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Transport and Regional Services	20.0	20.0	-	-

Explanation

The Government will provide funding of $20 million per year in 2002-03 and 2003-04 to the Stevedoring Industry Finance Committee for compensation to former waterside workers who contracted asbestos related diseases through exposure to asbestos on Australian wharves between the 1940s and 1970s.

Provision for funding of $15 million in 2002-03 and 2003-04 has already been included in the forward estimates. Therefore the effect on the fiscal and underlying cash balance will be $5 million in 2002-03 and 2003-04.

The appropriate level of funding for 2004-05 onwards will be addressed at a later stage taking into account the number of claims likely to be lodged for consideration.

Treasury

Additional funding for the Australian Prudential Regulation Authority for costs associated with the HIH Royal Commission

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Prudential Regulation Authority	-	-	-	-

Explanation

The Government has provided the APRA with additional funding of $4 million in 2001-02 to cover costs associated with their activities relating to the HIH Royal Commission inquiry.

The funding will enable APRA to meet expenses for legal support, specialist technical consultants, general administration costs and the cost of additional staff seconded full time to Royal Commission work.

Authorised deposit-taking institutions and insurance cost recovery

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Prudential Regulation Authority	3.0	3.0	3.0	3.0

Explanation

The Government will provide the Australian Prudential Regulation Authority (APRA) with additional funding of $12 million for the prudential regulation of authorised deposit-taking institutions and insurance. This funding will allow APRA to undertake additional work necessary to allow more intense supervision of conglomerate groups and to improve APRA's ability to analyse operational risk, liability valuation and insurance risk.

APRA's costs will be recovered from industry.

See also the related revenue measure titled Authorised deposit-taking institutions and insurance cost recovery in the Treasury portfolio.

Additional funding for the Australian Securities and Investments Commission for costs associated with the HIH Royal Commission

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Securities and Investments Commission	-	-	-	-

Explanation

The Government has provided the Australian Securities and Investments Commission (ASIC) with additional funding of $4.6 million in 2001-02 to cover the costs of its involvement with the HIH Royal Commission.

The funding covers costs of legal counsel, legal advice and administrative support for ASIC's involvement with the Royal Commission. ASIC's need for legal advice stems from its role as the corporate regulator of HIH and as a litigant in proceedings arising out of the HIH collapse.

Australian Securities and Investments Commission Output Pricing Review

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Securities and Investments Commission	19.4	25.8	22.3	23.3

Explanation

The Government has conducted an output pricing review of the Australian Securities and Investments Commission (ASIC) in 2001-02. In light of the review, ASIC will be provided with additional funding to implement and administer the legislative changes introduced by the Financial Services Reform Act 2001 (the Act), and to maintain its enforcement capability.

Additional funding for enforcement will assist ASIC's handling of an increasing case-load, including a number of high-profile cases, and improve its ability to preserve and recover assets for the benefit of investors.

The financial services reforms, which commenced on 11 March 2002, will improve the regulation of financial products, service providers and markets by introducing a single, harmonised licensing and product disclosure framework. Funding allocated in the out years for enforcement is subject to review in the light of experience in enforcing the Act.

Implementation of expanded obligations under the Financial Services Reform Act

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Securities and Investments Commission	-	-	-	-

Explanation

The Government has provided the Australian Securities and Investments Commission (ASIC) with additional funding of $0.5 million in 2001-02 to undertake its expanded obligations under the Financial Services Reform Act 2001. ASIC's costs are expected to increase to meet the expected demand for licenses during the first two years of the Act's operation.

A Better Superannuation System - allow temporary residents to access their superannuation after they have departed Australia

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	-	-	-	-

Explanation

The Government will allocate $14.3 million over five years for the Australian Taxation Office (ATO) to implement and administer the scheme to allow temporary residents to access their superannuation after they have departed Australia.

This measure will involve expenditure of $2.3 million in 2002-03, $1.5 million in 2003-04, $1.5 million in 2004-05 and $1.5 million in 2005-06 which is being fully absorbed within the existing resourcing of the ATO. The Government has provided additional funding of $7.5 million in 2001-02.

See also the related revenue measure titled A Better Superannuation System - allow temporary residents to access their superannuation after they have departed Australia in the Treasury portfolio.

A Better Superannuation System - Government superannuation co-contribution for low income earners

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	-	95.0	100.0	105.0

Explanation

From 1 July 2002, a Government superannuation co-contribution will be introduced in place of the existing rebate for personal superannuation contributions made by eligible low income earners. The co-contribution will match personal undeducted contributions by low income earners made on or after 1 July 2002.

A maximum co-contribution of $1,000 will be payable in respect of individuals whose assessable income and reportable fringe benefits do not exceed $20,000 per annum. The maximum co-contribution will be reduced by 8 cents for each dollar of assessable income and reportable fringe benefits over $20,000 (up to $32,500). The co-contribution will be treated as an undeducted contribution for tax purposes.

To be eligible for the co-contribution, an individual must not be aged 71 or more and must be ineligible to claim a tax deduction for their personal contributions. Persons who receive spouse, but not employer, superannuation support will be eligible for a tax deduction for their personal contributions.

See the related expense measure titled A Better Superannuation System - Government superannuation co-contribution for low income earners - implementation and administration and also the related revenue measure titled A Better Superannuation System - replacement of the rebate for personal superannuation contributions in the Treasury portfolio.

A Better Superannuation System - Government superannuation co-contributions for low income earners - implementation and administration

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	-	-	-	-

Explanation

The Government has allocated $29.5 million over four years to the Australian Taxation Office (ATO) to implement and administer the co-contribution for low income earners. This measure will involve expenditure of $16.8 million in 2002-03, $4.5 million in 2003-04, $4.1 million in 2004-05 and $4.1 million in 2005-06.

This measure is being fully absorbed within the existing resourcing of the ATO.

See the related expense measure titled A Better Superannuation System - Government superannuation co-contribution for low income earners in the Treasury portfolio.

A Better Superannuation System - quarterly Superannuation Guarantee contributions

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	10.9	7.0	7.0	7.0

Explanation

The Government will provide the Australian Taxation Office with funding of $31.9 million to implement and administer the changes to the Superannuation Guarantee arrangements that will require all employers to make Superannuation Guarantee contributions on behalf of their employees at least on a quarterly basis instead of a yearly basis. The funding includes provision for a communication campaign. This measure will take effect from 1 July 2003.

See also related capital and revenue measures titled A Better Superannuation System - quarterly Superannuation Guarantee contributions in the Treasury portfolio.

ATO pricing review - enhanced ATO resources

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Base tax administration funding	321.1	357.8	342.1	369.5
Large business compliance	9.5	15.7	16.0	16.4
Small business (income tax and fringe benefits tax) field services	28.3	28.4	28.9	29.5
Australian Taxation Office -Total:	358.9	401.9	387.0	415.4

Explanation

The Government accepted the recommendation of the independent pricing review of the Australian Taxation Office (ATO) for additional funding for base tax administration functions. The measures will improve service levels, help in achieving further gains in voluntary compliance and lead to increased revenue over the forward estimates period and beyond.

In addition, the independent pricing review identified large business compliance and small business (income tax and fringe benefits tax) field services as areas warranting further investment. Additional funding for large business compliance activities, including research, advice, education, revenue management and active compliance, will result in increased taxation revenue. Increased funding for small business field services will improve the advisory services provided to small businesses, enhance the ATO's capacity to identify emerging risks and assist in improving compliance behaviour.

See also the related revenue measure titled ATO pricing review - additional revenue from enhanced ATO resources in the Treasury portfolio.

Baby Bonus

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	85.0	250.0	390.0	510.0

Explanation

The Government will be providing further tax relief to families, through the introduction of the Baby Bonus. The Baby Bonus recognises that one of the hardest financial times for families is the birth of their first child, when one partner gives up or reduces their paid employment.

The Baby Bonus is to take effect on 1 July 2002 and will apply to a first child born on or after 1 July 2001. As a transitional measure, for families who already have children it will apply to a child born on or after 1 July 2001. Parents adopting or otherwise gaining legal custody of a first child will also be eligible. Every year for up to five years a parent will be able to claim up to $2,500 of the tax payable on their income earned in the year prior to the birth of their child. A minimum annual benefit of $500 will be available to parents with annual incomes of $25,000 or less. Where the parent returns to work, the entitlement will be reduced in proportion to the income earned. The benefit will also be transferable between spouses.

See the related expense and capital measures titled Baby Bonus - implementation and administration and the revenue measure titled A Better Superannuation System -superannuation from the Baby Bonus in the Treasury portfolio.

Baby Bonus - implementation and administration

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	-	-	-	-

Explanation

The Government will allocate $41.7 million over five years to the Australian Taxation Office (ATO) to implement and administer the Baby Bonus.

This measure will involve expenditure of $12 million in 2002-03, $8 million in 2003-04, $7.5 million in 2004-05 and $7 million in 2005-06 to implement and administer the Baby Bonus which will be absorbed within the existing resources of the ATO. Funding of $7.2 million has been provided in 2001-02.

See also the related expense measure titled Baby Bonus, related capital measure titled Baby Bonus - implementation and administration and the revenue measure titled A Better Superannuation System - superannuation from the Baby Bonus in the Treasury portfolio.

Choice of superannuation fund and portability

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	-	-	-	-

Explanation

The Government has allocated $28.7 million for the Australian Taxation Office (ATO) to administer choice of superannuation and undertake an extensive community education campaign to inform employees and employers of their rights and obligations in relation to choice of superannuation; and inform superannuation funds and their members about portability of existing superannuation balances. The Government will give employees the choice to determine the superannuation fund into which their Superannuation Guarantee contributions are paid, and allow members of accumulation funds to move existing benefits to their fund of choice.

These policies will increase competition, efficiency and performance within the superannuation industry and benefit members through lower fees and charges and increased returns.

This measure will involve expenditure of $12.7 million in 2002-03, $10.3 million in 2003-04, $3.4 million in 2004-05 and $2.3 million in 2005-06 which is being fully absorbed within the existing resourcing of the ATO.

Extension to the Diesel Fuel Rebate Scheme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	12.8	21.4	21.4	21.4

Explanation

The Government will extend eligibility for the Diesel Fuel Rebate Scheme to all diesel used for electricity generation by retail/hospitality businesses for their own use, where there is no access to commercial supplies of electricity.

The proposal extends the current scheme that provides a rebate on diesel fuel excise for the off-road use of diesel by the farming, mining, rail and shipping industries and hospitals that generate electricity using diesel fuel where there is no access to commercial supplies of electricity. This will reduce the costs of small retail/hospitality businesses generating electricity from diesel fuel where there is no access to commercial supplies of electricity.

Intergovernmental Agreement - enhanced resources for GST administration

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Increase in base GST administration funding	139.5	154.8	170.2	185.8
Small business (goods and services tax) field services	45.0	47.0	48.0	50.0
Australian Taxation Office - Total	184.5	201.8	218.2	235.8
Department of the Treasury Variation in BBA	19.5	-15.6	-8.4	-3.4
Total	204.0	186.2	209.8	232.4

Explanation

Under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Arrangements, all GST revenue is provided to the States and Territories (the States) and collected on their behalf on a fee for service basis by the Australian Taxation Office (ATO).

The Commonwealth and the States at the Ministerial Council meeting of 22 March 2002 agreed additional funding will be provided to the ATO to manage greater than anticipated GST workloads and to enhance small business (goods and services tax) field services and compliance capabilities (identified by the independent pricing review as an area warranting further investment). The States pay the Commonwealth for these costs.

Under the Intergovernmental Agreement, agreed GST administration costs are included as a component of each State's Guaranteed Minimum Amount (GMA). For each State, where that State's share of GST revenue is less than the GMA, the Commonwealth pays Budget Balancing Assistance (BBA). The combined effect of the additional GST revenue available to the States from these measures, and the change in the States' GMA as a result of administration costs determines the variation in the BBA required to be paid by the Commonwealth to the States.

Further details may be found in Budget Paper No. 3, and the Treasurer's press release of 22 March 2002.

See also the related revenue measure titled Additional reimbursements from the States and Territories in the Treasury portfolio.

Streamlined Company Registration

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Australian Taxation Office	3.0	-	-	-

Explanation

The Government will simplify procedures for company registration by combining the Australian Securities and Investments Commission's company registration process with the Australian Business Number (ABN) application process managed by the Australian Taxation Office. This will reduce red tape and save businesses time and money by removing duplication.

Establishment of the Office of the Inspector General of Taxation

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	2.0	2.0	2.0	2.0

Explanation

The Government will provide funding of $8 million to create an Office of the Inspector General of Taxation to provide advice to Government on tax administration and to act as an advocate for all taxpayers. This position will report to the Parliament through the Treasurer and will provide a new source of independent advice.

Extension of the Additional First Home Owners Scheme

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	30.0	5.0	-	-

Explanation

The First Home Owners Scheme (FHOS), introduced on 1 July 2000, provides assistance to first home owners in the form of a $7,000 grant. The FHOS is funded out of GST revenues and guaranteed by the Commonwealth through BBA payments to the States who administer the Scheme. On 9 March 2001, the Government announced that an additional  $7,000  grant, fully funded by the Commonwealth, would be available for first home owners building or purchasing new but previously unoccupied homes before 31 December 2001.

In December 2001, the Government announced a phase down of the additional grant making it available for a further six months, from 1 January 2002, at a reduced rate of $3,000 per grant. The additional grant will cease on 30 June 2002, while the original scheme will continue to offer $7,000 grants to eligible first home buyers. The Government also announced that more liberal construction commencement and completion requirements will apply to additional FHOS grants for contracts made on or after 9 October 2001.

This measure includes estimated expenditure of $15 million in 2001-02.

Reduction in Budget Balancing Assistance as a result of not indexing petroleum Revenue Replacement Payments forgone

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	-139.0	-165.1	-173.3	-266.5

Explanation

From 1 July 2002, indexation will not be included in the calculation of petroleum Revenue Replacement Payments forgone, a component of each State's Guaranteed Minimum Amount (GMA). The adjustment is consistent with the Commonwealth Government's decision of March 2001 to abolish indexation of fuel excise rates.

This adjustment will have the effect of lowering each State's GMA which reduces the amount of Budget Balancing Assistance paid by the Commonwealth to the States in 2002-03 and the forward estimates.

Further details may be found in Budget Paper No. 3, and the Treasurer's press release of 22 March 2002.

Reduction in Budget Balancing Assistance resulting from the National Excise Scheme for Low Alcohol Beer

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	-62.9	-59.5	-58.0	-61.3

Explanation

At the meeting of the Ministerial Council for Commonwealth-State Financial Relations on 22 March 2002, the Commonwealth and the States and Territories (the States) agreed to implement a National Excise Scheme For Low Alcohol Beer from 1 July 2002. The scheme will replace a range of existing State subsidies with a nationally uniform and administratively efficient concession in the rate of excise on low alcohol beer.

The Commonwealth will deduct from each State's Budget Balancing Assistance (BBA) an amount commensurate with its current subsidies, indexed for inflation, for as long as each State continues to receive BBA. After the transition period, when all States no longer require BBA, the Commonwealth will be fully funding the Scheme.

Further details may be found in Budget Paper No. 3, and the Treasurer's press release of 22 March 2002. See also the related revenue measure titled National Excise Scheme for Low Alcohol Beer in the Treasury portfolio.

Review of competition provisions of the Trade Practices Act

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	-	-	-	-

Explanation

The Government has provided funding of $0.6 million in 2001-02 to undertake an independent review of the competition provisions of the Trade Practices Act 1974 and their administration. The terms of reference of the review will cover whether the legislation and its administration encourages an environment where businesses can grow and compete internationally, provides adequate protection for the balance of power between small and large business, supports the growth of regional Australia and deals fairly with affairs of individual companies.

United Medical Protection (UMP)/Australasian Medical Insurance Ltd (AMIL) insolvency adviser

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	2.0	-	-	-

Explanation

The Government will provide funding of $2 million to engage external experts (for example legal and insolvency experts and appropriate actuarial advisers) to assist the Government in relation to the issues surrounding United Medical Protection (UMP) and its wholly owned subsidiary Australasian Medical Insurance Limited (AMIL).

See related expense measure titled United Medical Protection (UMP)/Australasian Medical Insurance Ltd (AMIL) Guarantee.

United Medical Protection (UMP)/Australasian Medical Insurance Ltd (AMIL) Guarantee

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of the Treasury	*	*	*	*

Explanation

The Government has written to members insured by United Medical Protection/Australasian Medical Insurance Limited (UMP/AMIL) stating that the Commonwealth will guarantee to the provisional liquidator, or to any other subsequently appointed liquidator, the obligations of UMP/AMIL to pay any amount properly payable in the period 29 April to 30 June 2002 in respect of claims under a current or past policy. The Commonwealth has stated that it will also provide a guarantee to the provisional liquidator or to any subsequently appointed liquidator to enable the provision of cover in respect of valid claims that arise at any time for: holders of a current policy, for events that occur between 29 April and 30 June 2002; and holders of a policy that expires and is renewed by the provisional liquidator between 29 April and 30 June 2002, for insured events that occur before 30 June 2002. These proposed guarantees will apply to the extent that the provisional liquidator is unable to meet UMP/AMIL's obligations under these policies from UMP/AMIL's assets. The Government will ensure that these proposed guarantees are contractually binding on future governments, and will legislate to confirm the effect of the proposed guarantees.

No estimate of the expense, liability and the associated cash flow has been included in the 2002-03 Budget for this measure as the nature of this measure is such that a reliable estimate cannot be produced at this time.

A disclosure of this measure has been included in the Statement of Risks in Budget Paper No. 1 (Fiscal risks - Expenses).

Veterans' Affairs

Extend the Gold Card to Australian veterans over 70 years of age with post World War II qualifying service

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Health and Ageing	-15.8	-17.5	-19.9	-22.3
Department of Veterans' Affairs	32.2	38.5	45.2	52.7
Total	16.4	20.9	25.3	30.4

Explanation

The Government will provide funding of $93.1 million to extend the Repatriation Health Card - For All Conditions (Gold Card) to Australian veterans aged 70 and over with post World War II qualifying service. The Gold Card provides access to free treatment and care within Australia for all health conditions, whether war-related or not. It also provides access to pharmaceuticals at concessional rates under the Repatriation Pharmaceutical Benefits Scheme.

This is a cross-portfolio measure between the Department of Veterans' Affairs and the Department of Health and Ageing. There will be a reduction in expenses in the Health and Ageing portfolio as veterans affected by the measure will no longer need to rely on the provision of health care services under that portfolio.

Index the ceiling rate of income support supplement for war widows

Expenses ($m)

	2002-03	2003-04	2004-05	2005-06
Department of Family and Community Services	-0.5	-0.6	-0.5	-0.5
Department of Veterans' Affairs	5.8	15.7	26.9	38.2
Total	5.4	15.1	26.4	37.7

Explanation

The Government will provide funding of $84.7 million to introduce twice yearly indexation of the ceiling rate of the Income Support Supplement (ISS) for war widows. Indexation will be based on increases in the Consumer Price Index and the Male Total Average Weekly Earnings, and will apply from 20 September 2002. This will result in the ISS ceiling rate of $124.90 payable to war widows being indexed in line with service pension indexation.

ISS is subject to an income and assets test and provides income support in addition to the War Widow's Pension for Australian war widows with limited means.

War widows who are veterans in their own right and receive their income support as a service pension are subject to the same ceiling rate applying to ISS, and under this measure will also be able to access the new indexation arrangements.

This is a cross-portfolio measure between the Department of Veterans' Affairs and the Department of Family and Community Services. There will be a small reduction in income support payments in the Family and Community Services portfolio as war widows transfer to the Veterans' Affairs portfolio to access the new indexation arrangements.

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