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Tuesday, 17 February 1987
Page: 11

(Question No. 4716)

Mr Fife asked the Minister for Aviation, upon notice, on 7 October 1986:

(1) What is the estimated cost to Qantas of the fringe benefits tax in a full year.

(2) Is this a significant additional operating cost and will it be reflected in higher fares.

(3) Will this additional cost reduce Qantas' competitiveness with other airlines.

Mr Peter Morris —The answer to the honourable member's question is as follows:

(1) $3.6 million.

(2) The extent to which the tax may be reflected in higher fares is difficult to establish, as Qantas' fare structure reflects the whole range of the costs faced by the Company, the net effect of which determines the level of the Company's fares. However compared with Qantas' total expenditure of $1,967.5 million in 1985/86, the additional cost of the fringe benefits tax to Qantas is not considered to be significant.

(3) The Government believes the tax will not reduce Qantas' competitiveness with other airlines. In this respect it should be noted that overseas airlines are also required to pay fringe benefits tax on their operations in Australia.