Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)MAIN FEATURES
This Bill will implement the proposal announced on 28 November 1985 and modify amendments of the water conservation and conveyance provisions of the income tax law contained in the Taxation Laws Amendment Bill (No. 4) 1985. Those amendments propose the replacement, with write-off over 5 years, of the immediate income tax deduction for capital expenditure incurred by a primary producer on conserving or conveying water, as announced in the 19 September 1985 Statement on Reform of the Australian Taxation System. This Bill will provide that, where the expenditure is incurred under a contract entered into after 19 September 1985, it is deductible by way of 3 equal annual instalments - that is, a 33 1/3% deduction in the year in which the expenditure is incurred and in each of the subsequent 2 years.