Appendix A: Policy Decisions Taken Since the 2005-06 Budget - Expense Measures

Treasury

Budget Balancing Assistance — alignment of import entry thresholds for courier and postal imports

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	1.7	2.7	2.6	2.6

The Government has aligned the import entry level threshold for postal and courier imports at $1,000, with effect from 12 October 2005.

Previously, the threshold for air and sea consignments and postal consignments carried by private couriers was $250, while the threshold for postal consignments carried by Australia Post was $1,000. The alignment will reduce GST revenue.

The alignment of these thresholds at $1,000 will promote competitive neutrality and simplify the customs clearance process for a large number of importers.

For those States and Territories receiving Budget Balancing Assistance (BBA), the Government will adjust this assistance to compensate for the decrease in GST revenue resulting from this measure. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2005-06.

See also the related revenue measure Customs duty — alignment of import entry level thresholds for courier and postal imports in the Attorney General’s portfolio.

Further information can be found in Australian Customs Notice No. 2005/57 of 7 October 2005.

Budget Balancing Assistance — changes to the vouchers provisions

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	..	..	..	..

The Government will ensure that a simplified GST accounting arrangement is available for ‘eligible vouchers’ for GST purposes that are sold through a distribution chain. The measure will take effect from 1 July 2000.

The GST Act provides a simplified accounting arrangement for GST between principals and agents where the supplies are taxable supplies. This arrangement is not currently available for ‘eligible vouchers’ as these vouchers are not taxable supplies. The GST voucher provisions operate so that GST is remitted when the voucher is redeemed for goods and services and not on the sale of the voucher.

The effect of a simplified accounting arrangement being available for ‘eligible vouchers’ is that retailers/distributors of the vouchers will not be required to remit GST on any commissions or similar payments and the supplier of the voucher will not claim an input tax credit.

Budget Balancing Assistance — GST and representatives of incapacitated entities

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	..	..	..	..

The Government will clarify the GST obligations for representatives that are appointed over entities that have become incapacitated. The measure will have effect from the first tax period after the date of Royal Assent of the enabling legislation.

Incapacitated entities include entities that are in liquidation or receivership.

This measure will ensure that these rules operate as intended and provide certainty to representatives of incapacitated entities.

For those States and Territories receiving Budget Balancing Assistance (BBA), the Government will adjust this assistance for any change in GST revenue resulting from this measure. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2005-06.

Budget Balancing Assistance — GST and the sale of real property — margin scheme

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	*	*	*	*

The Government has changed the requirement to obtain written agreement for the use of the margin scheme so that it no longer affects contracts entered into before the date of Royal Assent.

For those States and Territories receiving Budget Balancing Assistance (BBA), the Government will adjust this assistance accordingly. However, as the cost to GST revenue cannot be quantified, it is not possible to quantify the impact on BBA. Further information on BBA can be found in Budget Paper No. 3, Federal Financial Relations 2005-06.

Further information can be found in the press release of 7 June 2005 issued by the Minister for Revenue and Assistant Treasurer.

Budget Balancing Assistance — GST and the sale of real property — deferral of integrity measure

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	*	*	*	*

The Government has deferred the tax integrity measure concerning the interaction of the margin scheme with the GST free going concern and the GST free farm land provisions.

The Government is currently undertaking consultation with industry to ensure that the margin scheme applies appropriately to these supplies.

Further information can be found in the press release of 7 June 2005 issued by the Minister for Revenue and Assistant Treasurer.

Budget Balancing Assistance — GST concession for the Melbourne 2006 Commonwealth Games

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	0.3	-	-	-

The Government has agreed to allow certain goods of a non commercial nature to be imported free of GST by ‘Commonwealth Games Family’ members for the Melbourne 2006 Commonwealth Games. The concession will take effect from 1 January 2006 and run until 30 June 2006.

A similar concession was provided for the Sydney 2000 Olympic and Paralympic Games.

Further information can be found in Australian Customs Notice No. 2005/67 of 7 October 2005.

See also the related revenue measure Indirect tax — customs duty concession for the Melbourne 2006 Commonwealth Games in the Attorney General’s portfolio.

Budget Balancing Assistance — Indirect Tax Concession Scheme — GST extension

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	..	..	..	..

The Government has provided or upgraded refunds for GST to certain countries’ diplomatic and consular representation under the Indirect Tax Concession Scheme.

Twelve countries’ missions and consulates are entitled to new or upgraded benefits as a result of this decision.

These enhanced concessions took effect from the time provided in the implementing instruments issued by the Minister for Foreign Affairs.

See also the related revenue measure Indirect tax concession scheme — extension in the Treasury portfolio.

Budget Balancing Assistance — personal aquatic survival skills

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	-	0.4	0.5	0.5

The Government has decided to issue regulations to allow a broader range of personal aquatic survival skills courses to be GST free with effect from a date to be specified in the enabling regulations. Broadly, if an instructor for a course holds a certificate in certain competencies in aquatic survival skills training, the courses provided by the instructor will be GST free. The certificate in the particular competencies will have been recognised under the Australian Quality Training Framework. The precise content of the regulations will be determined after consultation with the aquatic survival skills industry.

The introduction of this measure is subject to the unanimous approval of the States and Territories under the Intergovernmental Agreement on the Reform of Commonwealth State Financial Relations.

Budget Balancing Assistance — supplies of options and rights offshore — deregistration and change to start date

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Department of the Treasury	14.5	-	3.3	-

The Government has deferred the introduction of amendments to the goods and services tax (GST) law relating to the taxation of non-resident tour operators. The amended start date is 1 October 2005.

This amendment allowed affected enterprises time to adjust to the changes announced in the 2005-06 Budget and also allowed non resident tour operators to deregister for GST.

The revenue impact above represents a deferral of the collection of revenue from the original measure from 2004-05 to 2005-06.

Further information can be found in the press release of 20 June 2005 issued by the Minister for Revenue and Assistant Treasurer.

Corporate Insolvency Law Reform — strengthening creditor protection and deterring misconduct by company officers

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Australian Securities and Investments Commission	3.4	6.0	6.4	6.9
Related capital ($m)
Australian Securities and Investments Commission	0.3	-	-	-

The Government will provide $23.1 million over four years to establish a fund to finance preliminary investigations of companies liquidated with little or no assets. Insolvency practitioners will conduct investigations where the Australian Securities and Investments Commission considers there is some possibility of misconduct.

The funding will also support an increased enforcement programme targeting matters identified by the investigations.

This amount includes $0.3 million in capital funding for an electronic workflow system.

Further information can be found in the press release of 12 October 2005 issued by the Parliamentary Secretary to the Treasurer.

Fuel Taxation and Credit Reform — eligibility of alternative fuels for a full credit when consumed in off-road business activities

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Australian Taxation Office	-	-	-	-

The Government will bring forward its commitment to make alternative fuels used in off-road business activities eligible for a full fuel tax credit to apply from 1 July 2011. The start date when the measure was originally announced in June 2004 was 1 July 2012. Bringing forward the start date will make the tax treatment of all off-road uses of alternative fuels consistent and will result in an additional cost of $5.0 million in 2011-12.

Further information can be found in the press release of 27 May 2005 issued by the Minister for Revenue and Assistant Treasurer.

Fuel Taxation and Credit Reform — extension of alternative fuels grants until 1 July 2010

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Australian Taxation Office	-	4.0	3.0	2.0

The Government will continue alternative fuel grants under the Energy Grants (Credits) Scheme Act 2003 until 1 July 2010, with the grant rates payable reducing to zero in five equal annual steps commencing on 1 July 2006 and concluding on 1 July 2010. The estimated cost is $10.0 million over the five-year transition period from 2006 to 2010.

Further information can be found in the press release of 27 May 2005 issued by the Minister for Revenue and the Assistant Treasurer.

One.Tel — ongoing litigation and investigation

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Australian Securities and Investments Commission	3.3	-	-	-

The Government will provide additional funding of $3.3 million in 2005-06 to the Australian Securities and Investments Commission to continue litigation arising from the collapse of One.Tel.

This funding is in addition to the $2.6 million provided in the 2005-06 Budget for this matter.

Taskforce on reducing the regulatory burden on business

Expense ($m)
	2005-06	2006-07	2007-08	2008-09
Productivity Commission	0.2	-	-	-

The Government will provide $0.2 million in 2005-06 to the Productivity Commission to support the Taskforce on Reducing the Regulatory Burden on Business. The Taskforce will examine and report to the Prime Minister on areas where appropriate regulatory reform can provide significant immediate gains to business. The Taskforce will report by 31 January 2006.

Further information can be found in the joint press release of 12 October 2005 issued by the Prime Minister and the Treasurer.