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Special depreciation allowance for certain primary production plant



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TREASURER I λ . //. $0

EMBARGO

PRESS RELEASE NO.

STATEMENT BY THE TREASURER. THE HON. JOHN HOWARD, M.P. AND THE MINISTER FOR PRIMARY INDUSTRY, .

THE HON. PETER NIXON, M.P.

SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PRIMARY PRODUCTION PLANT

In a joint statement the Treasurer and the Minister for Primary Industry today gave further details of the proposal announced in the Prime Minister's Policy Speech of 30 September 1980 to introduce a special depreciation allowance of 20 per cent a year on a prime cost basis over 5 years for new machinery used wholly and exclusively in agricultural, pastoral and forestry operations and for new vessels used in

the fishing industry. ·

The Ministers said that the special 20 per cent prime cost rate of depreciation will apply to new items of plant and

machinery such as harvesters, tractors, shearing plant, milking machines, general farm plant and trucks that are used wholly and- exclusively in agricultural or pastoral pursuits or in forest operations, and are eligible for depreciation. It will

also be available in respect of plant such as fishing vessels, fishing equipment and shore-based plant used wholly and exclusively in fishing operations.

The new concession will not be available in respect

of structural improvements or motor vehicles designed primarily for the transport of persons.

To qualify for the concession, the new item of plant must be acquired by the taxpayer under a contract entered into

after 30 September 1980 or, if constructed by the taxpayer,

construction must have commenced after that date. The

concession will nat be available in respect of second-hand plant.

· 2 .

The new rate will be available in respect of the income year in which the plant is first used and in respect

of each of the four succeeding years.

Where plant is not used wholly and exclusively in agricultural, pastoral, forest or fishing operations, normal depreciation allowances will be available.

Taxpayers will be given an option to' have normal rates of depreciation apply to individual plant items, instead of the proposed 20 per cent rate. Such an election must be made at the time of lodgment of the income tax return in which

depreciation is first claimed in respect of the plant. Once made, such an election will be irrevocable.

Legislation giving effect to the special allowance will be introduced during the sittings of the Parliament later this year.

Canberra 12 November 1980