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Friday, 27 June 1997
Page: 5456


Senator KEMP (Assistant Treasurer)(11.39 a.m.) —The provisions seeking to remove the accelerated depreciation for trading ships gives effect to the government's election commitment under section 57AM. An Australian trading ship under the Ships (Capital Grants) Act could be eligible to be depreciated at the rate of 20 per cent over five years beginning in the pre-commissioning year. The Ships Grants Legis lation Bill 1996 passed by the parliament last year amended the Ships (Capital Grants) Act to bring forward the existing sunset provisions on 30 June 1997 to 30 June 1996.

The amendment to section 57AM enables those ships that would have qualified for the capital grant had the scheme continued for a further 12 months until 30 June 1997 to still qualify for the accelerated depreciation concession. This is provided these ships continue to meet the compliance criteria set out in the Ships (Capital Grants) Act and are delivered to the shipowner and registered in Australia before 1 July 1997. The Australian taxpayer cannot be expected to continue pouring depreciation concessions into the shipping industry when it has failed to address the serious problems impeding this industry's development as an efficient and competitive world class industry.

I would also like to draw the attention of the chamber to another issue in the explanatory memorandum in relation to special depreciation on trading ships. It has been stated that the estimated revenue savings of the measure will be $10 million in 1997-98, $15 million in 1998-99 and $15 million 1999-2000. I have now been advised that these revenue savings will not be realised because the estimated savings were mistakenly calculated on the basis that the accelerated depreciation provision would continue to be available until 30 June 2002 as reflected in section 57AM of the Income Tax Assessment Act. However, because complementary amendments to the Ships (Capital Grants) Act proposed by the previous government were not made, the accelerated rate would not, in any event, operate beyond 30 June 1997.


The TEMPORARY CHAIRMAN (Senator Childs) —The question is that part 1 of schedule 1 stand as printed.