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Thursday, 21 September 1972
Page: 1134

Senator COTTON - On 22nd August 1972, Senator Primmer addressed a question without notice to the Minister representing the Treasurer, asking whether a Taxation Board of Review had disallowed the investment allowance on farm machinery used to contract on neighbouring farms and whether consideration would be given to an amendment of the law to authorise a deduction in these circumstances. The Treasurer has provided the following information:

In a case recently decided in favour of the commissioner of Taxation, a Taxation Board of Review held that an investment allowance deduction was not available under section 62ab of the Income Tax Assessment Act where plant was purchased and used by the owners partly in a business of primary production and partly for separate contracting activities.

The possibility of amendingthe law to extend the investment allowance to primary producers' plant used partly in a contracting business has been considered by the Government on a number of occasions. To extend the scope of the allowance in this way would go beyond the purpose of the concession which is directed towards the acquisition of plant for use wholly and exclusively in a business of primary production. In addition, full-time contractors to whom the allowance would not be available would be placed at a competitive disadvantage as compared with farmer contractors if the scope of the concession were to be widened in this way.

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