Second Reading Speech
Mr SNEDDEN (Bruce-Treasurer) (10.15)- move:That the Bill be now read a second time.
The purpose of this Bill is to give effect to the Government's decision, announced on 14th February 1972, to restore the investment allowance on manufacturing plant and equipment. The allowance permits a deduction for income tax purposes of 20 per cent of the installed cost of new plant and equipment used in manufacturing, the deduction being made from the income of the year in which the plant is first used or installed for use. This allowance was introduced in February 1962, and remained in force until its suspension in February last year. The decision to restore it was taken recently when the Government decided upon measures to encourage activity in the private sector.
This step has been taken on the basis of views put to us strongly from many quarters that restoration of the allowance is likely to be conducive to greater confidence and activity. This Bill will restore the allowance, under section 62AA of the Income Tax Assessment Act, as from 14th February 1972. Expenditure incurred on or after that date will qualify regardless of when the contract under which it is incurred was entered into. In other respects the allowance will be as it was before suspension. The rate of allowance will be 20 per cent, and the allowance will apply to precisely the same categories of expenditure as before. The deductions will again be allowable in respect of the income year in which the plant is first used or installed for use. A memorandum explaining technical features of the Bill is being made available to honourable members. I commend the Bill to the House.
Debate (on motion by Mr Crean) adjourned.