Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon. John Howard, M.P.)
The first of these Bills - the Income Tax Laws Amendment Bill 1981 - will give effect to three of the taxation changes foreshadowed in the Prime Minister's Policy Speech for the last elections. These are the proposals for an immediate deduction for capital expenditure incurred by a taxpayer in connecting a business property to mains electricity; for a concessional deduction to be allowed to a taxpayer in respect of the cost of insulating the taxpayer's first home; and for an immediate deduction for capital expenditure on petroleum fuel storage facilities.
The Bill will also, by removal of tourist buses from the scope of an excluding provision, allow the investment allowance to apply to such buses with effect from 1 January 1976, the date of commencement of the allowance. Further amendments will be effected to the gift provisions of the income tax law to allow deductions for gifts to certain overseas aid organisations, to the Herbert Vere Evatt Memorial Foundation and to public funds for the provision of religious instruction in government schools. The period for which deductions are available for gifts to the I.D.E.C. Kampuchean Relief Appeal is also to be extended.
In addition, the Bill will give effect to proposals designed to counter various forms of tax avoidance. One of those proposals concerns income diverted to exempt bodies and the Income Tax (Dividend Income) Bill 1981 will formally declare the rate of tax that is to apply to such income.
The first Bill also provides the opportunity to make a number of formal amendments, involving changes in drafting style, to the Income Tax Assessment Act (the "Principal Act"). These amendments will result in the adoption, in references to other provisions of the Act, of a "forward referencing" style.