Explanatory Memorandum
(Circulated by authority of the Minister for Industry, Science and Resources, Senator the Honourable Nick Minchin)Outline
The ACIS Administration (Amendment) Bill 2000 will implement some minor changes to the ACIS Administration Act 1999 ('the Act') that have come to light in the course of setting up the administrative framework for the scheme.
The Automotive Competitiveness and Investment Scheme (ACIS) seeks to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth in the context of trade liberalisation.
The administrative framework for delivering the scheme to the Australian automotive industry is now well developed, and the proposed minor amendments set out in this Bill will enable the efficient delivery of the program, reducing the administrative burden on both participants and the Government.
The main change to the Act will be an increased capacity for regulations to define what is approved plant and equipment and approved research and development for the purposes of calculating benefits under the scheme. As a result, this will enable the maximum claimable value of investment in different kinds of plant and equipment and research and development to be set out in regulations. This will assist participants to determine what is and what is not eligible expenditure, in what is largely a self assessed scheme.
The regulations will now also be able to provide for investment loadings to cover all those incidental costs of investment which are extremely difficult to substantiate from a participant's point of view, and almost impossible to audit from an administrator's point of view. It is intended that these loadings will substitute for the labour costs of repairs and maintenance associated with investment in plant and equipment, and those low cost or short life items that are normally fully depreciated in the year of purchase.
The loadings will also substitute for overhead costs associated with research and development, removing the need for participants to substantiate and pro-rate costs where R & D activities occur in the same building as, for example, production activities.
As well as clarifying terms and phrases used in the legislation, this Bill will also introduce provisions to protect the scheme from "artificial" companies set up purely to take advantage of ACIS, that are not going to contribute to the sustainable growth of the Australian automotive industry. This will permit the benefits of the $2 billion scheme to be directed at those firms that are working to improve their competitiveness.
The Bill will not change the overall structure of the scheme and will not impact on the fiscal envelope, as the scheme is capped at $2 billion.