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Wednesday, 9 February 2005
Page: 81

Senator IAN MACDONALD (Minister for Fisheries, Forestry and Conservation) (3:05 PM) —For Senator Bolkus’s benefit, I have the relevant tax expert from the relevant department here to give me some advice in relation to tax matters and grants. I will pass that on to Senator Bolkus. Government grants that are provided to resident individuals and families are not taxable. For example, the Commonwealth ex gratia payments are not taxable. Business related grants are treated as assessable income, but the associated expenditure is deductible either immediately or over a certain period of time, depending on the nature of the expenditure. For example, a South Australian farmer who immediately spent the entire amount of the business grant on, say, feed for his livestock would claim that as a deduction.

The assessability of grants has been a longstanding feature of the tax laws. South Australian businesses have not been singled out. The same laws applied to businesses affected by the 2003 bushfires in Canberra and Victoria. They were treated the same. Given the devastating effect of the bushfires, the Commonwealth has provided a comprehensive relief package which better targets and assists those affected. The Commonwealth initiatives include the provision of family and community grants through Centrelink and crisis payments.

Centrelink granted 48 claims totalling approximately $15,000 in the period up to when the Australian government ex gratia assistance was announced by Minister Hockey on 14 January. Regarding the ex gratia payments, as at 7 February this year—a couple of days ago—Centrelink has received 355 claims and, as of today, about 262 have been processed. Approximately $285,000 in ex gratia assistance has been paid to date. Payments of $1,000 per eligible adult and $400 per eligible child are available to those whose principal place of residence has been destroyed or is uninhabitable and to those who have lost an immediate family member as a result of the fires. Centrelink has also provided staff to assist on the ground, including customer service staff and additional psychologist and social work resources.

The Senate would be aware that under the natural disaster relief arrangements the Australian government will reimburse the South Australian government 50 per cent of expenditure on eligible personal hardship and distress, including emergency payments to individuals for food, clothing and accommodation; essential repairs to housing and repairs or replacement of essential items of furniture and personal effects; and psychological counselling. If the expenditure exceeds certain thresholds the Australian government will reimburse the state up to 75 per cent of the cost of eligible measures considered appropriate by the South Australian government, such as the restoration and replacement of essential public infrastructure, loans and/or interest subsidies grants provided to farmers, and other acts of relief and restoration. Senator, you would be aware that these are arrangements in place under the natural disaster relief arrangements that apply to all natural disaster reliefs and which have been in place for some time.

There was assistance from the ADF, and I have mentioned that previously. In addition to that, the Attorney-General has approved a request for Emergency Management Australia to coordinate the provision of Australian government resources to aid the Eyre Peninsula disaster recovery clean-up. The tax commissioner has been helpful as well. He has given help in the form of a comprehensive assistance package to help those taxpayers affected by the bushfires meet their tax obligations, including more time to meet income tax and activity statement lodgment obligations, additional time to pay debts without extra interest charges and expediting refunds to affected taxpayers. The tax office has given out copies of tax office documents where the original documents have been destroyed in the fire, given people copies of their own documents and made field visits to reconcile lost records.

As I mentioned earlier, the Howard government has done quite a lot to try and help in these tragic circumstances. I know that various departments, including my own, are looking at ways that we could assist—in our instance, perhaps through the Natural Heritage Trust and other programs that the government runs. We certainly want to work with South Australia to this end, and I think the South Australian government well appreciates the work that the Commonwealth has done.