Treasury
Amendments to the research and development provisions
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 7.0 | 7.0 | 7.0 | 7.0 |
| Related revenue ($m) | ||||
| Australian Taxation Office | -2.5 | -2.5 | -2.5 | -2.5 |
The Government will improve the operation of the research and development (R&D) provisions by amending taxation legislation to clarify the law, remove unintended consequences and ensure that the law reflects the original policy intent. Some measures will broaden the range of potential claimants; others will streamline their claim processes. The changes will have various dates of effect.
The rights of appeal for the R&D tax offset will be extended and the period when a taxpayer is able to lodge a claim for the offset will be extended. Other changes to the R&D tax offset include ensuring that R&D expenditure undertaken by a registered research agency is eligible for the offset and ensuring that all companies in a group may claim the offset when eligible. These changes are expected to lead to additional R&D tax offset payments of $7.0 million per year.
In addition, the operation of the 175 per cent premium R&D deduction will be improved. These changes include:
- ensuring that the deduction can be allocated to those companies in a group who have increased their R&D expenditure over three years; and
- that the deduction requirement test matches group history and group expenditure, adding a reference to the current Commercial Ready Program.
These changes will result in decreased revenue of $2.5 million per year.
Australian Competition and Consumer Commission — Canberra accommodation
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | - | 0.9 | 0.9 | 1.0 |
| Related capital ($m) | ||||
| Australian Competition and Consumer Commission | 3.3 | - | - | - |
The Government will provide $6.1 million over four years (including capital funding of $3.3 million) to the Australian Competition and Consumer Commission (ACCC) to allow the ACCC to lease a new Canberra office to house increased staff numbers arising from Government policy decisions. The capital funding is for office fit-out.
Australian Competition and Consumer Commission — monitoring medical indemnity insurance premiums
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | 0.3 | 0.3 | 0.3 | - |
The Government will provide an additional $0.9 million over three years to the Australian Competition and Consumer Commission (ACCC) to continue its role of monitoring medical indemnity insurance premiums.
In October 2002, the Government announced a package of measures aimed at maintaining key private medical services, including in rural and regional areas, and providing a new framework for the provision of medical indemnity insurance in Australia.
Funding of $0.5 million was provided in the 2002-03 Mid-Year Economic and Fiscal Outlook to enable the ACCC to commence monitoring of medical indemnity premiums in January 2003. Additional funding of $1.0 million over two years was provided in the 2003-04 Budget measure Australian Competition and Consumer Commission — monitoring medical indemnity insurance premiums to enable the continuation of this role to the end of June 2005.
Australian Energy Regulator — additional funding
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | 11.3 | 17.3 | 22.9 | 23.3 |
The Government will provide $74.8 million over four years to the Australian Competition and Consumer Commission (ACCC) to fund the Australian Energy Regulator's (AER) current regulatory function, including electricity transmission and wholesaling and key rule enforcement functions in the National Electricity Market. This funding will also enable the AER to assume additional regulatory functions transferred by the States and Territories to the AER, including gas transmission, gas and electricity distribution and non-price electricity and gas retail regulation.
The AER is a constituent part of the ACCC, but also operates as a separate legal entity.
Australian Securities and Investments Commission — broadening surveillance capability
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 6.6 | 6.7 | 6.8 | 7.0 |
| Related capital ($m) | ||||
| Australian Securities and Investments Commission | 2.0 | - | - | - |
The Government will provide $29.1 million over four years (including capital funding of $2.0 million) to the Australian Securities and Investments Commission (ASIC). This will support an expansion of ASIC's current surveillance activities and enable it to develop its presence in relation to non-exchange based market trading including bond markets, hedge fund activities and contracts for differences between the opening and closing price on various financial instruments.
The capital funding is for electronic surveillance tools, including software for reviewing financial reports and for conducting market surveillance.
Australian Securities and Investments Commission — enforcement funding
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 30.0 | 30.0 | 30.0 | 30.0 |
The Government will provide $30.0 million a year to fund the potential costs of the Australian Securities and Investments Commission (ASIC) arising from the investigation and litigation of exceptional matters of significant public interest. Funding will be provided through a special account.
This funding is in addition to ASIC's existing funding for enforcement activities.
Australian Securities and Investments Commission — enhancement of information technology security and risk management
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 6.5 | 2.8 | 1.0 | 1.1 |
| Related capital ($m) | ||||
| Australian Securities and Investments Commission | 2.8 | - | - | - |
The Government will provide $14.2 million over four years (including capital funding of $2.8 million) to the Australian Securities and Investments Commission (ASIC) to enhance ASIC's IT security and disaster recovery capability.
The funding will enhance security tools and software that protect sensitive information in ASIC's core systems and will help provide backup equipment and facilities to improve ASIC's capability to resume services to the public should its core system fail. The capital funding is for IT servers.
The funding also includes $8.0 million for an organisation wide IT architecture review and scoping study to identify a strategy to migrate ASIC's systems to a new IT architecture. This would allow ASIC to cope with increasing transaction rates on its public registry systems and to move applications to modern IT infrastructure.
Australian Securities and Investments Commission — sustaining supervision and oversight capability
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Securities and Investments Commission | 15.2 | 17.3 | 18.9 | 19.9 |
The Government will provide $71.3 million over four years to the Australian Securities and Investments Commission (ASIC) to help fund an appropriate level of supervision and oversight of financial markets and entities in the face of growing demands.
The additional funding reflects the increased scope and complexity of the financial markets regulated by ASIC.
Child Care Tax Rebate — communications programme
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 1.2 | - | - | - |
The Government will provide an additional $2.3 million over two years (including $1.1 million in 2005-06) for communications activities to encourage take up of the Child Care Tax Rebate by eligible families.
Current and prospective recipients of the Child Care Benefit will be targeted directly through selective media (for example, parenting magazines) and information provided to service providers (child care providers and tax agents).
Corporations and Markets Advisory Committee — additional funding
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Corporations and Markets Advisory Committee | 0.2 | 0.2 | 0.2 | 0.2 |
The Government will provide $0.7 million over four years to the Corporations and Markets Advisory Committee (CAMAC) to reflect changes arising from the Review of the Corporate Governance of Statutory Authorities and Office Holders.
This funding takes account of changes to CAMAC's operations as a result of it being converted from a body corporate under the Commonwealth Authorities and Companies Act 1997 to an agency under the Financial Management and Accountability Act 1997, including CAMAC no longer earning interest on its cash holdings.
Criminal cartel enforcement — investigations and prosecutions
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Competition and Consumer Commission | 6.2 | 6.1 | 6.2 | 6.3 |
| Office of the Director of Public Prosecutions | 0.8 | 1.2 | 1.2 | 1.2 |
| Federal Court of Australia | 0.7 | 0.6 | 0.6 | 0.6 |
| Total | 7.6 | 7.8 | 8.0 | 8.2 |
| Related capital ($m) | ||||
| Federal Court of Australia | 1.4 | - | - | - |
| Australian Competition and Consumer Commission | 0.6 | - | - | - |
| Total | 2.0 | - | - | - |
The Government will provide $33.6 million (including $2.0 million in capital funding) over four years to investigate serious cartel conduct subject to criminal penalties. The funding will allow the Australian Competition and Consumer Commission (ACCC) to establish a dedicated cartel unit to investigate serious cartel matters. The capital funding for the ACCC is for the cost of an electronic documentation system.
The Government will provide $4.4 million over four years to the Office of the Director of Public Prosecutions to pursue complex criminal cases arising from the ACCC investigations.
In addition, the Government will provide $3.9 million over four years to enable the Federal Court to hear trials relating to serious cartel conduct offences under proposed amendments to the Trade Practices Act 1974. This includes $1.4 million in capital funding in 2006-07 for accomodation fit-out.
The criminal cartel provisions of the Trade Practices Act 1974 to be introduced to Parliament in the 2006 winter sittings will prohibit a person from making or giving effect to a contract, arrangement or understanding between competitors that contains a provision to fix prices, restrict output, divide markets or rig bids.
Further information can be found in the press release of 2 February 2005 issued by the Treasurer.
Electronic data provision for e-tax returns
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 5.0 | 5.0 | - | - |
The Government will provide the Australian Taxation Office (ATO) with additional resources of $10 million over two years to enable it to accelerate its programme of providing taxpayer data electronically in e‑tax returns. This measure will fund trials in 2007-08 and 2008-09 to allow taxpayers to download dividend distributions from share registers directly into their e-tax returns.
The trial in 2007-08 will be available to individual taxpayers using e-tax. If successful, the ATO will extend the trial in 2008-09 to tax agents using the tax agent portal.
Providing taxpayers with the ability to download tax information directly into their e-tax returns makes preparing a tax return simpler and easier by removing the need for taxpayers to enter this data manually.
Fuel Excise Reform — implementation
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 14.3 | 16.1 | 5.5 | 1.1 |
The Government will provide $37.0 million to the Australian Taxation Office for administration of the fuel tax credits arrangements, which were announced in the Energy White Paper on 15 June 2004 and will be progressively implemented from 1 July 2006 with final changes taking effect from 1 July 2012. The new system will replace the current complex system of fuel tax concessions with a single system of fuel tax credits claimable via the Business Activity Statement.
Goods and services tax — additional compliance activities
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 10.6 | 17.8 | 18.0 | - |
| Related revenue ($m) | ||||
| Department of the Treasury | 10.6 | 17.8 | 18.0 | - |
The Government will provide $46.4 million over three years for additional compliance activities in relation to the collection of the goods and services tax (GST). This will be offset by corresponding payments by the States as under the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations the cost of GST administration is fully met by the States. Additional compliance activities are expected to result in increased GST of $190.2 million for the States (see also the related measure Additional GST compliance activities in Budget Paper No. 3; Federal Financial Relations 2006-07). The funding for the additional compliance activities will be reviewed, in conjunction with the States, after three years.
Heavy vehicle road user charge — impact on fuel tax credit scheme
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 240.0 | 280.0 | 330.0 | 380.0 |
The Government has decided not to proceed with an increase in the heavy vehicle road user charge recommended by the National Transport Commission. The recommendation to raise the charge reflected an increase in the National Transport Commission's estimate of the cost of road usage attributable to heavy vehicles. The Government's June 2004 Securing Australia's Energy Future statement assumed the charge would rise in line with road usage costs and this was reflected in the budget estimates. By not proceeding with the rise previously included in the estimates, the cost to the budget is $1.2 billion over four years.
Insurance industry — disqualification of persons
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Prudential Regulation Authority | 3.7 | - | - | - |
The Government will provide $3.7 million in 2006-07 to the Australian Prudential Regulation Authority to help it complete a comprehensive programme to assess whether a number of individuals are 'fit and proper' to remain in the general insurance industry.
This measure forms part of the Government's response to the findings of the HIH Royal Commission.
The funding will cover the costs of making formal determinations and dealing with any resulting appeals.
National Claims and Policies Database
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Prudential Regulation Authority | 1.5 | 1.2 | 1.2 | 0.4 |
| Related revenue ($m) | ||||
| Australian Prudential Regulation Authority | 1.5 | 1.2 | 1.2 | 0.4 |
The Government will provide $4.3 million over four years to the Australian Prudential Regulation Authority (APRA) to fund the National Claims and Policies Database. This will increase information available to both APRA and the insurance industry in relation to public liability and professional indemnity insurance.
The additional costs will be recovered from industry through a special levy on regulated institutions that offer public and product liability and professional indemnity insurance who benefit from the National Claims and Policies Database.
Operation Wickenby — addressing offshore tax schemes
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 36.8 | 36.2 | 33.9 | 34.2 |
| Australian Federal Police | 16.0 | 13.3 | 13.4 | 13.5 |
| Commonwealth Director of Public Prosecutions | 11.4 | 15.2 | 16.3 | 14.0 |
| Australian Crime Commission | 3.9 | 3.2 | 3.2 | 3.2 |
| Australian Securities and Investments Commission | 2.6 | 2.6 | - | - |
| Total | 70.6 | 70.5 | 66.8 | 64.9 |
| Related revenue ($m) | ||||
| Australian Taxation Office | 91.0 | 98.0 | 100.0 | 34.0 |
| Related capital ($m) | ||||
| Australian Taxation Office | 2.1 | 1.1 | - | - |
| Australian Crime Commission | - | - | - | - |
| Australian Securities and Investments Commission | - | - | - | - |
| Australian Federal Police | - | - | - | - |
| Total | 2.1 | 1.1 | - | - |
The Government will provide $305.1 million over seven years (including $22.0 million in 2005-06, $6.0 million in 2010-11 and $1.1 million in 2011-12) for investigations and prosecutions related to Operation Wickenby which addresses alleged tax fraud involving the use of offshore entities.
This measure includes $2.4 million in capital funding in 2005-06 (including $0.1 million for the Australian Taxation Office, $0.6 million for the Australian Crime Commission, $1.3 million for the Australian Federal Police and $0.4 million for the Australian Securities and Investments Commission) for information and communication technology related costs.
This measure is also expected to result in increased tax revenue of $323.0 million over four years from active compliance and through improved compliance behaviour by the relevant taxpayers.
Further information can be found in the press release of 8 February 2006 issued by the Treasurer.
Reform of state taxes — payment of Budget Balancing Assistance
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Department of the Treasury | -230.8 | -125.2 | - | - |
The Australian Government and the States and Territories (the States) have agreed to a timetable for the elimination of a range of state taxes consistent with the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations. This is expected to provide an estimated saving of $356 million as Budget Balancing Assistance (BBA) is no longer required.
It has been agreed that all States will abolish, if they have not already, stamp duty on non-quotable marketable securities, leases, mortgages, bonds, debentures and other loan securities, credit arrangements, instalment purchase arrangements, rental arrangements, cheques, bills of exchange and promissory notes, and business conveyances other than real property.
The timing and sequencing by which each State will abolish these taxes will differ, but all of the above taxes will be abolished by 1 July 2012. Furthermore, since the schedules result in all States maintaining gains from tax reform, BBA is not expected to be required.
To make certain that no State is worse off in any one year as a result of tax reform, the Australian Government will extend the transitional period beyond 30 June 2006 to 30 June 2009. This means that should any State have a shortfall between its GST revenue provision and its Guaranteed Minimum Amount, it will be compensated through BBA.
Renewable diesel — new tax concession
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 20.0 | 26.7 | 26.7 | 26.7 |
The Government will provide $100.1 million over four years to allow renewable diesel made from tallow (or animal fats) using new technology to receive the same tax treatment as biodiesel. Biodiesel is subject to excise but is effectively tax free until 1 July 2011 because it is eligible for grants made under the Energy Grants (Cleaner Fuels) Scheme Act 2004. From 2011 to 2015, grant rates payable with respect to biodiesel, and therefore renewable diesel, will be reduced to zero in five equal steps.
Further information is contained in the Prime Minister's press release of 31 March 2006.
Superannuation Guarantee — improving responsiveness to inquiries by employees
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 5.6 | 8.2 | 2.7 | 2.7 |
The Government will provide $19.2 million to improve the responsiveness of the Australian Taxation Office (ATO) to inquiries about compliance with the Superannuation Guarantee arrangements. The ATO will be able to provide enhanced services to employees with concerns about the payment of employer superannuation contributions required under the Superannuation Guarantee arrangements. This will be achieved by addressing the backlog of inquiries and providing more timely completion of future investigations. The ATO will also be able to provide employees with more advice on the progress of Superannuation Guarantee inquiries.
Tax Practitioner Legislative Framework — implementation
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Australian Taxation Office | 12.7 | 13.8 | 13.1 | 10.7 |
| Related capital ($m) | ||||
| Australian Taxation Office | 1.3 | 3.3 | 2.6 | - |
The Government will provide $57.5 million over four years (including $7.2 million in capital funding for IT infrastructure) for the implementation of a new Tax Practitioners Legislative Framework to ensure nationally consistent, high quality and accessible tax practitioner services to the community. The new framework will introduce registration for Business Activity Statement Service Providers and provide them with access to the products and services available to tax agents. Over time, the proposal is expected to provide benefits to the Australian Taxation Office's core activities in terms of more accurate returns from taxpayers, a reduction in general inquiries, a greater take up of electronic reporting options and scope to reduce audit activity.
Treasury — Review of Aspects of Income Tax Self Assessment
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | |
|---|---|---|---|---|
| Department of the Treasury | 2.1 | 0.8 | - | - |
The Government will provide $2.9 million over two years to the Department of the Treasury for the Review of Aspects of Income Tax Self Assessment to continue the Government's commitment to modernising the tax system to make it fairer and more accessible. This measure comprises five reviews aimed at reducing the level of uncertainty for taxpayers and the compliance costs associated with self assessment.