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Wednesday, 16 March 1977
Page: 305

Mr McVeigh asked the Treasurer, upon notice:

(1)   Are the same income tax allowances given for expenses incurred in carrying out soil conservation works, e.g. erecting contour banks on new land as compared with old cultivation.

(2)   If not, why not, and will consideration be given to extending the allowances applicable to old cultivations to new cultivations in order to give maximum encouragement to all to preserve the most priceless asset of our top soils.

Mr Lynch - The answer to the honourable member's question is as follows:

(1)   Income tax deductions are allowable in respect of expenditure incurred on land used for purposes of primary production in:

(a)   the eradication or extermination of animal or vegetable pests from the land;

(b)   the destruction and removal of timber, scrub or undergrowth indigenous to the land;

(c)   the destruction of weed or plant growth detrimental to the land;

(d)   the preparation of the land for agriculture;

(e)   ploughing and grassing the land for grazing purposes;

(f)   the draining of swamp or low-lying lands where that operation improves the agricultural or grazing value of the land;

(g)   preventing or combating soil erosion or flooding on the land; or

(h)   conserving or conveying water for use in carrying on primary production on the land.

Where the expenditure represents recurrent costs, not of a capital nature, in carrying on a business, it is deductible in the year in which it is incurred. In other cases, the expenditure is allowable over a period of ten years, provided that the taxpayer who incurred the expenses continues to use the land for purposes of primary production. Before amendments to the income tax law in 1973 the expenditure in these cases was also fully deductible in the year of incurrence.

(2)   The Government's first priority is the need to combat inflation and it has therefore been necessary to confine further tax concessions to broadly based measures consistent with our overall strategy. However, the honourable member may be assured that the matters to which he refers will be given careful consideration when the relevant provisions of the income tax law are next under review.

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