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Thursday, 20 June 1996
Page: 1887


Senator KEMP (Parliamentary Secretary to the Minister for Social Security)(9.43 a.m.) —I table the expanatory memorandum and move:

That this bill be now be read a second time.

I seek leave to have the second reading speech incorporated in Hansard .

Leave granted.

The speech read as follows

This bill amends the Development Allowance Authority Act 1992 (the Principal Act).

The primary purpose of the bill is to amend the Principal Act to remove certain restrictions on the restructuring of ownership of projects eligible for the Development Allowance so that a more consistent approach is available to the various types of prospective applicants for the Development Allowance.

Where all other criteria in the Principal Act are met, these amendments would allow the transfer of the Development Allowance benefit where ownership of a project is transferred to another entity after application for the Development Allowance but before registration.

Secondly, the amendments would allow the transfer of the Development Allowance benefit where ownership of a project is transferred from one entity structure to another type of entity structure after application for the Development Allowance.

To maximise the effectiveness of the amendments, they will be retrospective and will apply from 1 January 1993, which is the date applications for the Development Allowance closed.

The amendments will also provide that any applications for registration of plant expenditure that were refused, or granted in respect of an amount of expenditure that was less than the amount of expenditure whose registration was sought in the application, may be granted in full if they would have been granted in full if the amendments proposed in this bill had been in force when the Principal Act received Royal Assent.

Moreover, the amendments will provide that any application for registration of plant expenditure that was withdrawn, may be taken not to have been withdrawn if an application for transfer of the benefits of the application for registration could have been made if the amendments proposed in this bill had been in force when the Principal Act received Royal Assent.

The amendments will also grant the Development Allowance Authority (the DAA) a power to determine that an application by an entity for registra tion of plant expenditure has lapsed in certain limited circumstances.

The opportunity is also taken to make some minor administrative adjustments and to correct certain apparent drafting errors.

This bill has no budgetary implications as the revenue implications of the proposed amendments were previously incorporated into the Budget estimates.

The benefit of the amendments (in terms of revenue forgone) to projects which qualify for the allowance under the provisions of the bill is expected to be approximately $10 million per annum. Over the nine years from 1993-94 to 2001-02, the benefit to projects is expected to be approximately $92 million.

This benefit relates only to unregistered projects that have already restructured or have developed an intention to restructure before registration.

There is no reliable estimate of the prospective benefit to projects of allowing all types of restructuring after registration, but the benefit is unlikely to be more than $3 million per annum.

A similar 1995 bill had passed all stages in the House of Representatives and was stalled in the Senate during the Spring Sittings last due to the backlog of legislation. At that stage the 1995 bill had enjoyed bipartisan support.

Mr President, the explanatory memorandum contains more detailed explanations of the provisions of the bill.

I commend the bill to honourable senators.

Debate (on motion by Senator Chris Evans) adjourned.

Ordered that further consideration of the second reading of this bill be adjourned until the first day of sitting in the spring sittings, in accordance with the order agreed to on 29 November 1994.