Senator CONROY (Minister for Broadband, Communications and the Digital Economy) (9:13 PM) —In answer to the question Senator Milne asked and, I think, the question that Senator Joyce was asking, I draw their attention to the Income Tax Assessment Act 1997, chapter 2, ‘Liability rules of general application’, part 2-10, ‘Capital allowances: rules about deductibility of capital expenditure’, division 40—‘Capital allowances’. Section 40.30 says:

I am not quite sure how much plainer I can be. It is stated there in black and white: ‘except land’.

In the same way that the carbon sink legislation does not cover exclusions, the horticultural plant provisions use a general meaning for establishment costs. The ATO has made a tax determination in relation to carbon sink forests, which states:

Given that this interpretation applies elsewhere in division 40 of the Income Tax Assessment Act 1997, there is no reason for it not to apply in the same way for carbon sinks. The explanatory memorandum for the carbon sinks legislation makes clear that assets separate from the trees are not considered to be an establishment expenditure. I am quoting here from the Income Tax Assessment Act 1997, chapter 2, part 2-10, division 40, ‘What a depreciating asset is’. Quite clearly, land is written there and excluded.