Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)FINANCIAL IMPACT
The estimated revenue cost of allowing a deduction for research and development expenditure where a grant or recoupment is received or for which there is an entitlement to recoupment is $7m in 1988-89, $4m in 1989-90, $5m in each of 1990-91 and 1991-92, and $2m in 1992-93.
The changes in relation to plant and pilot plant used for research and development will have no impact on revenue.
The nature of the amendments which will allow partnerships of eligible companies and trustees of public trading trusts access to research and development deductions and which will facilitate the sharing of plant used for research and development are such that no estimate of the revenue effect can be made.
The cost of the changes in relation to depreciation on buildings used for research and development is estimated not to exceed $1m in any year.
Extending the current research and development concession to 30 June 1993 and reducing the deduction in the following two years is estimated to cost $200m in each of the 1992-93 and 1993-94 years and $120m in each of the 1994-95 and 1995-96 years.
The change to the imputation of company tax arrangements is estimated to save $1.3 million in 1989-90.
Exempting the pay and allowances of Defence Force personnel allotted for duty in Namibia is estimated to cost $2.75 million in a full year.
The nature of the proposed amendment of the capital gains and capital losses provisions for long term leases of land is such that a reliable estimate of the potential revenue effect cannot be made.
The cost to revenue of the amendment in respect of ACT election expenses is estimated to be $100,000 in 1989-90.
Termination of the deduction for eligible capital subscriptions to licensed Management and Investment Companies is estimated to produce revenue savings of $2 million in 1991-92 and $20 million per annum in subsequent years.
Modification of the substantiation rules for transport allowance payments is estimated to cost less than $100,000 per annum for 1988-89 and subsequent years.
The revenue cost of exempting from sales tax certain shipping containers is negligible.
Other amendments proposed by the Bill will have negligible revenue impact.