Minerals Council of Australia |
MINERALS COUNCIL OF AUSTRALIA
SUBMISSION TO THE HOUSE OF REPRESENTATIVES
STANDING COMMITTEE ON ECONOMICS: INQUIRY INTO
TAX DEDUCTIBILITY
JANUARY 2016
Minerals Council of Australia |
TABLE OF CONTENTS
KEY POINTS ........................................................................................................................................... 1
1 MINING AND THE AUSTRALIAN ECONOMY .................................................................................... 2
About the MCA ................................................................................................................................. 2
A central pillar of Australia’s economy ............................................................................................. 2
2 MINING AND AUSTRALIA’S CORPORATE TAX SYSTEM ............................................................... 4
The minerals industry’s tax contribution .......................................................................................... 4
Australia is a high tax mining jurisdiction ......................................................................................... 5
3 THE COMPETITIVENESS OF AUSTRALIA’S CORPORATE TAX SYSTEM .................................... 7
Australia has a high tax corporate rate applying to a broad base ................................................... 7
4 TAX TREATMENT OF DEBT DEDUCTIONS AND CAPITAL EXPENSES ........................................ 8
Interest expenses ............................................................................................................................. 8
Thin capitalisation rules .................................................................................................................... 8
Alternative proposals to tighten thin capitalisation rules .................................................................. 9
Capital expenses ............................................................................................................................ 10
Minerals Council of Australia | 1
KEY POINTS
The MCA welcomes the Committee’s interest in options for reform of Australia’s taxation system. It is
vitally important that options be considered as part of a comprehensive review, as is being undertaken
by the Australian Government’s White Paper reform process.
The Committee’s Terms of Reference look to examine options to simplify the personal and company
tax system, with a focus on options to broaden the bases of these taxes to fund reductions in rates. A
particular reference was made to the deductibility of interest incurred by businesses.
Australia’s capacity to capture the next wave of mining investment depends on ensuring policy
frameworks, including our taxation system, are internationally competitive. This encompasses a wide
number of tax-related variables including Australia’s corporate tax rate, deductibility of funding costs,
tax depreciation arrangements, tax treatment of R&D and exploration and other business costs.
In global comparative terms, Australia has a high corporate tax rate applying to a broad base.
Australia’s 30% corporate tax rate exceeds the OECD average of 25%, and the MCA supports tax
reform to reduce this rate in line with the OECD average. With Australia being a large capital
importer, the tax treatment of debt (interest expenses) represents an important element in the
competitiveness of Australia’s business tax system.
The MCA strongly opposes any proposal to alter long-standing tax arrangements on the deductibility
of interest expenses. Successive reviews of Australia’s taxation system have rejected such a radical
approach. Removing or tightening existing arrangements for the deductibility of interest would be
contrary to Australia’s economic interests and out of line with international best practice.
The idea that a revenue neutral reduction in the corporate tax rate funded from denying interest
deductibility would reduce effective tax rates is misplaced. Whilst the impact on the overall revenue
might be neutral, a change of this nature would effectively result in the redistribution of the incidence
of company taxation to industries which rely more heavily on debt funding such as capital-intensive
industries. Such a proposal would not represent tax reform and would be counter to Australia’s tax
policy imperatives to increase investment and growth.
The scale of funding required for mining projects and the limitations on funding capacity of domestic
financial institutions means Australia’s mining industry relies heavily on highly mobile foreign capital,
including debt funded capital. Removing or tightening existing arrangements for the deductibility of
interest expenses would increase the cost of capital for mining investments in Australia and reduce
after-tax returns. It would affect companies that have made large investments under the existing tax
regime, damaging Australia’s sovereign risk reputation. This would mean imposing a higher tax
burden on an industry that is Australia’s largest export industry by a wide margin and is vital to
growth, investment and jobs, especially in regional and remote Australia.
Australia’s corporate tax system is already characterised by a broad base with limited concessions
and a tax depreciation regime that aligns broadly with economic depreciation. Major steps were taken
following the Ralph Review at the turn of the century which removed or otherwise limited a wide range
of business deductions.
Deductibility of interest on debt financing is subject to strict integrity provisions which limit interest
deductions and prevent multinational companies from shifting an excessive share of global debt to
Australia. Following changes in recent years, Australia has arguably the strictest thin capitalisation
regime and transfer pricing regimes globally. To go further would put Australia out of step with OECD
recommendations. It would be particularly damaging to the mining industry’s capacity to fund large
capital investments in the future and would put Australia at a distinct disadvantage compared with
other competing resource-rich jurisdictions.
Minerals Council of Australia | 2
1 MINING AND THE AUSTRALIAN ECONOMY
About the MCA
The Minerals Council of Australia (MCA) represents Australia’s exploration, mining and minerals
processing industry, nationally and internationally, in its contribution to sustainable economic and
social development. MCA member companies represent more than 85 per cent of Australia’s annual
minerals industry production and a higher share of minerals exports.
A central pillar of Australia’s economy
Mining is Australia’s largest export earner accounting for almost 60 per cent of total export earnings
(Chart 1). It is the nation’s second largest industry (about 8.5 per cent of GDP), produces more value
added per employee than any other industry and pays Australia’s highest wages.
Australia’s minerals industry (excluding oil and gas) directly employs more than 200,000 workers and
more than 60 per cent of minerals industry employment is in regional and remote communities. The
industry is the largest private sector employer of Indigenous Australians.
Over the past decade, mining has been a major source of economic growth, investment, higher living
standards and a large contributor to government revenues. Despite tougher market conditions and a
marked reduction in commodity prices, mining continues to contribute positively to Australia’s growth
as the sector moves through the production and export phase of the mining boom.
The benefits to Australia from the Millennium Mining Boom are large and enduring. Mining is a larger
share of Australia’s economy and the capital stock of the sector is three times larger than it was a
decade ago. The challenge is to ensure Australia takes full advantage of this positive legacy, while
also being positioned to attract investment in new projects when the commodity cycle turns again.
The industry has now entered a phase of strong growth in export volumes. Resource export volumes
are up by 20 per cent over the past three years. Australia now exports around three times the volume
of iron ore than it did a decade ago, and around twice as much coal. This has been an important
contributor to GDP growth in Australia, as underlined by the September 2015 quarter national
accounts which showed mining as the largest industry contributor to Australia’s economic growth.
Chart 1: Australia’s export shares by category
Source: Balance of Payments and International Investment Position, Australia, ABS cat No. 5302.0
0
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70% % Rural Manufactures Services Resources
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The global economy continues to offer significant growth opportunities for Australia’s minerals
industry as demand for resources and energy will continue to grow as emerging countries continue to
industrialise and urbanise. Yet prices for most commodities are expected to remain under pressure in
the medium term and new sources of supply competition have emerged. There is no shortage of
mineral resources worldwide, just as there is no shortage of competitor countries keen to secure
mining investment.1
Australia’s capacity to capture the next wave of mining investment depends on ensuring policy
frameworks, including our taxation system, become more internationally competitive. This
encompasses a wide number of tax-related variables including Australia’s corporate tax rate,
deductibility of funding costs, tax depreciation arrangements and tax treatment of R&D, exploration
expenditure, and various other business costs.
1 For example, Australia has 29 per cent of the world’s iron ore resources, 9 per cent of black coal, 17 per cent of gold and 13
per cent of copper resources. See Identified Mineral Resources as of December 2014, Geoscience Australia.
Minerals Council of Australia | 4
2 MINING AND AUSTRALIA’S CORPORATE TAX SYSTEM
Australia’s minerals industry is a ‘price taker’ in highly competitive global markets. While Australia is a
major producer of a number of commodities, competition for investment is intense in the face of
competition from other resource-rich economies. The overall burden of taxation and the predictability
of fiscal regimes are critical factors influencing mining investment decisions globally.
Mining is a highly capital-intensive industry characterised by multi-decade investments. Mining
projects involve high-risk exploration outlays, large upfront capital commitments, long-life assets,
sophisticated technologies and long lead times to profitability. The scale of funding required and the
limitations on funding capacity of domestic financial institutions means Australian mineral resources
companies rely heavily on mobile global capital for investment, including debt funding.
As outlined in the MCA’s June 2015 submission to Treasury’s ‘Re:think’ tax discussion paper,
minerals resource projects have particular (and often unique) characteristics that make investment
decisions highly sensitive to mining taxation regimes. These characteristics include:
The exploration phases preceding start-up and production are lengthy and costly, and there is
no income during these phases
The development of a mine is capital intensive and requires specialist equipment and skills
A mining project typically has a long life and therefore may be subjected to changes in the
political regime or domestic circumstances
Prices are subject to larger cyclical swings than in most other economic sectors
The scale of operations can be very large, with high replacement and incremental investment
to maintain production of a finite resource
Mining activities generally get more costly as a project matures because the resource
becomes less accessible
Mine closure and reclamation incur large costs after income generation has ceased.
Tax changes that diminish the after-tax return from Australian mining projects reduce the
attractiveness of investment in Australia. In addition, survey research of MCA member companies on
productivity has found that 80 per cent of company respondents nominated royalties and taxes as
either ‘very important’ (45 per cent) or ‘important’ (35 per cent) to securing productivity improvements.
The minerals industry’s tax contribution
The minerals industry makes a substantial contribution to Commonwealth and state government
revenues and that contribution has grown markedly over the past decade. Deloitte Access
Economics estimates (released in December 2015) show that over the decade to 2014-15, the
minerals industry paid an estimated $165 billion in Federal company tax and state royalties alone.2
This is roughly equivalent to Federal spending on higher education and schools over the same period.
While revenues to government have fallen in line with lower commodity prices, they are significantly
higher than the years preceding the mining boom. In 2014-15, Deloitte Access Economics estimates
the industry paid more than $12 billion in company tax and royalties.3 While down from the peak of
the commodity price boom, this contribution is more than double the level prior to the boom.
The fall in corporate tax payments from peak levels reflects the sharp decline in commodity prices and
industry profits in recent years and demonstrates how company tax operates as a ‘profits tax’. Chart
2 shows that revenue payments have closely followed commodity prices.
2 Deloitte Access Economics, Minerals Industry Tax Survey 2015, report prepared for the Minerals Council of Australia,
December 2015. 3 Ibid.
Minerals Council of Australia | 5
Chart 2: Minerals industry company tax and royalties, 2000-01 to 2014
Source: Deloitte Access Economics
Australia is a high tax mining jurisdiction
Mining is among the highest taxed industries in Australia and the tax burden on mining is higher than
in many other resource-rich competitor nations. The 2015 Minerals Industry Tax Survey shows the
Australian minerals industry faced a tax ratio of 47 per cent in 2013-14 (the most recent survey year)
based on company tax and royalties (Chart 3). In other words, nearly half of every dollar in profit is
paid as royalties or company tax.4 This constitutes the equal highest tax ratio recorded over the
seven years of survey data and is above the survey average of 43.1 per cent.
Prominent economist Chris Richardson points out that, contrary to widespread perceptions: ‘Not only
did those tax ratios never fall far [during the boom], they’ve actually headed up over recent years’.5
Chart 3: Total tax take ratio on mining
Source: Deloitte Access Economics
4 Ibid.
5 Chris Richardson, Mining Tax Ratios Revisited, a public policy analysis produced for the Minerals Council of Australia, No. 8,
March 2015, p. 7.
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25,000
1999-00 2002-03 2005-06 2008-09 2011-12 2014-15e
Royalties Company tax Bulk commodities prices - SDR (RHS)
$million Index (2013-14 =100)
42.1%
40.6%
42.1%
39.8%
43.2%
46.8% 46.8%
36%
38%
40%
42%
44%
46%
48%
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Minerals Council of Australia | 6
International benchmarking shows Australia is a relatively high tax mining jurisdiction. A 2013
Goldman Sachs study of company tax and royalties estimated the tax take from mining in Australia at
44 per cent compared with a global average of around 39 per cent.6 Major resource exporters like
Brazil, Indonesia, Canada, Peru and South Africa all have lower tax rates on mining.
Official ATO data confirms that Australian mining pays a relatively high effective corporate tax rate.
While mining comprises close to 10 per cent of Australia’s economy, the most recent ATO Tax
Statistics publication (covering 2012-13) shows that the industry paid almost one quarter of all
company tax paid.
Analysis of the data by Professor Sinclair Davidson of RMIT has shown that the effective company tax
rate on mining (net corporate tax after refunds and credits as a percentage of taxable income) has
remained well above the average of ‘all industries’ and close to 30 per cent (Chart 4).7 A key reason
mining pays close to the 30 per cent rate is the nature of Australia’s broad corporate tax base and the
absence of sector-specific concessions for mining. As Professor Sinclair Davidson notes: ‘The mining
industry is not the beneficiary of large amounts of government subsidy or special assistance’.8
Chart 4: Average effective tax rates for all industries and mining
(Net tax as a percentage of taxable income)
Source: ATO Taxation Statistics (various); Sinclair Davidson calculations
6 Goldman Sachs, Resource Nationalism Poses Big Threat to Miners, Equity Research Paper, January 2013.
7 Professor Sinclair Davidson, Official Evidence on Mining Taxes: 2015 update, background paper produced for the Minerals
Council, May 2015. 8 Sinclair Davidson, Mining Taxes and Subsidies: Official evidence, background paper prepared for the Minerals Council of
Australia, May 2012.
0
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Net
Tax
as
per
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tage
of
Taxa
ble
In
com
e
All Industries Mining
Minerals Council of Australia | 7
3 THE COMPETITIVENESS OF AUSTRALIA’S CORPORATE TAX SYSTEM
Australia has a high tax corporate rate applying to a broad base
Australia is losing its edge in the competition for highly mobile global capital. By international
standards, Australia has a high headline company tax rate and a heavy reliance on corporate and
personal income taxes. As a small to medium-sized, open, capital importing economy, Australia’s high
effective corporate tax rate is particularly damaging to growth prospects.
While other countries have been cutting company tax rates to attract investment and boost growth,
Australia’s corporate tax rate has remained static since 2001. The last corporate tax rate reduction
from 34 per cent to 30 per cent in 2001 brought Australia in line with the OECD average at the time
(30.8 per cent in 2000).9 Australia’s 30 per cent statutory rate now compares with an OECD average
of 25 per cent and an even lower average of 22 per cent in the Asian region.10
While headline rates are an important indicator of tax system competitiveness, a more accurate
measure is the effective tax rate on investment taking into account allowable tax deductions (including
for debt expenses), depreciation and any tax offsets. Debt-funded foreign investment plays an
important role in the Australian economy with ABS data showing that debt funding accounts for
around two-thirds of total foreign investment in Australia.11
The Tax and Transfer Policy Institute has pointed out that Australia’s broad corporate tax base
means ‘Australia’s marginal effective company tax rate is several percentage points higher than
estimated rates for the UK, Canada and New Zealand, as well as the OECD average’ and is
‘significantly higher than regional competitors for capital investment’.12
Global tax competitiveness comparisons by Dr Jack Mintz and Dr Duanje Chen at the School of
Public Policy, University of Calgary, also show that Australia has a high effective company tax rate.
They found that between 2005 and 2014, Australia moved from having the 11th highest to the 7th
highest Marginal Effective Tax Rate (METR) among 34 OECD countries. Australia’s METR has
remained static at 25.9 per cent over that period while the OECD’s average has fallen from 22.3 per
cent to 19.4 per cent.13
Australia’s broad corporate income tax base stems largely from the 1999 Review of Business
Taxation (the ‘Ralph Review’) which recommended a number of base broadening reforms. Reforms
implemented in the early 2000s removed a number of tax depreciation allowances and introduced the
Uniform Capital Allowance (UCA) regime which more closely aligned tax depreciation with economic
depreciation. Among steps taken as part of the Ralph Review reforms was the removal of
accelerated depreciation for mining assets with the abolition of the 10 year cap on certain mining
capital expenditure from July 2001.
The absence of special concessions for mining is reflected in Productivity Commission analysis. The
Productivity Commission’s 2013-14 Trade and Assistance Review states that: ‘The estimated
effective rate of assistance from tariff and budgetary assistance for mining is negligible’.14 The bulk of
what is deemed assistance to mining takes the form of measures available to all industries such as
the R&D Tax Incentive.
9 Dick Warburton and Peter Hendy, International Comparison of Australia’s Taxes, report to the then Treasurer the Hon. Peter
Costello MP, 3 April 2006. 10
KPMG, Corporate Tax Rates Table, viewed 20 January 2016. 11
Australian Bureau of Statistics, International Investment Position, Australia: Supplementary Statistics, 2014 cat.No. 5352, ABS, Canberra 2015. 12
Miranda Stewart, Andre Moore, Peter Whiteford and R. Quentin Grafton, A Stocktake of Tax System and Directions for Reform: Five years after the Henry review, Tax and Transfer Policy Institute, Crawford School of Public Policy, ANU College of Asia and the Pacific, February 2015. 13
Duanje Chen and Jack M. Mintz, The 2014 Global Tax Competitiveness report: A proposed Business Tax Reform Agenda, School of Public Policy Research Papers, Volume 8, Issue 4, University of Calgary, February 2015. 14
Productivity Commission, Trade and Assistance Review 2013-14, Annual Report Series, Productivity Commission, Canberra, June 2015.
Minerals Council of Australia | 8
4 TAX TREATMENT OF DEBT DEDUCTIONS AND CAPITAL EXPENSES
Interest expenses
Immediate deductibility of interest expenses incurred for business expenses is a fundamental and
long-standing component of Australia’s tax system (under the general deductibility provision section
8-1 of the Income Tax Assessment Act 1997 (Cth)) and that of tax regimes globally. The tax
discussion paper ‘Re:think’ affirms that: ‘similar to most foreign jurisdictions, under Australia’s tax
system, interest payments are tax deductible’. The tax treatment of interest expenses is an important
element in the competitiveness of the nation’s business tax system.
Debt is a legitimate mechanism to fund investments, particularly in capital intensive industries such as
mining which face large upfront capital costs to fund projects. Mining and other capital-intensive
sectors are more highly leveraged than most other industries because the scale of capital costs
cannot always be funded through equity or other funding sources. The tax treatment of funding
impacts significantly on the after-tax return on investments and is important to assessing the overall
attractiveness of a mining investment project.
Denial or paring back legitimate interest deductions on debt funding would reduce the rate of return
for investments in Australia and impact on the attractiveness of Australia as a destination for
investment for capital intensive resource and infrastructure projects. Fewer resource investment
projects would be profitable at the margin and there would be a corresponding decline in investment.
Lower investment would in turn reduce productivity and wages and economic growth. The effective
rate of tax would increase for many investments in capital intensive industries, even if the headline
corporate rate was reduced.
The MCA strongly opposes any proposal to alter long-standing tax arrangements which allow interest
expenses incurred in deriving business income to be deductible. Successive reviews of Australia’s
taxation system have sensibly rejected this approach. Removing or tightening existing arrangements
for the deductibility of interest expenses would be out of line with both Australia’s economic interests
and international best practice. It is far from clear that a revenue neutral reduction in the corporate
tax rate that could be funded from denying interest deductibility would reduce effective tax rates.
Removing or tightening existing arrangements for the deductibility of interest expenses would impact
severely on capital-intensive industries such as mining. The scale of funding required for mining
projects and the limitations on funding capacity of domestic financial institutions means Australia’s
mining industry relies heavily on highly mobile foreign capital, including debt funded capital.
Removing or tightening existing arrangements for the deductibility of interest expenses would
increase the cost of capital for mining investments in Australia and reduce the after-tax return on
these investments. It would particularly affect companies that have made large investments under the
existing tax regime, damaging Australia’s sovereign risk reputation.
Thin capitalisation rules
Australian deductibility of interest on debt financing is subject to strict integrity provisions which limit
interest deductions and prevent multinational companies from shifting an excessive share of global
debt to Australia (in order to reduce taxable income in Australia).
Australia‘s thin capitalisation rules provide a ‘safe harbour’ so that interest deductions are allowed to
the extent that an entity’s debt liabilities do not exceed 60 percent of the total value of its adjusted
Australia assets. The rules were strengthened from 1 July 2014 with a reduction in the thin
capitalisation safe harbour limit from a maximum debt of 75 per cent of its adjusted Australian assets.
These changes reduced the maximum allowable deductions for interest expenses for general entities.
Australia now has a stricter thin capitalisation regime than most other countries. Importantly,
Australia’s rules include a broader range of debt compared with other countries (international and
Minerals Council of Australia | 9
domestic, related party and third party debt). Regimes in most competitor jurisdictions only focus on
‘related party’ debt. The Treasurer Scott Morrison has observed that: ‘we [Australia] have the best
thin capitalisation rules I believe going around and they are entirely consistent with what the OECD
has recommended.’15
To further tighten Australia’s thin capitalisation rules would put Australia out of step with OECD
recommendations. It would be particularly damaging to the mining industry’s capacity to fund large
capital investments and would put Australia at a distinct disadvantage compared with competitor
resource jurisdictions.
Alternative proposals to tighten thin capitalisation rules
In March 2015, the Federal Opposition announced a proposal to further tighten the thin capitalisation
rules. The policy proposes to limit deductibility for interest expenses up to the gearing level of a
global group. The policy would also remove the arm’s length debt test.
The MCA is concerned that this policy would serve only to increase the cost of capital for companies
investing into Australia by denying legitimate tax deductions for no tax integrity outcome. By going
much further than OECD recommendations on interest deductions, it would put Australia’s thin
capitalisation regime out of step with countries competing for capital.
As noted earlier, the structure and tax treatment of funding has a significant direct impact on the
viability of resource projects. By limiting debt deductions to a multinational group’s global average,
interest deductions could be denied in Australia if the Australian gearing average was above the
group’s global gearing ratio. In practice, some country debt levels will be higher and some lower than
the global average. This does not indicate a tax integrity issue. Industries with large upfront
investment costs and long lead times to profitability, such as the resources industry, would be
disproportionately affected given the cost of investments is often funded, at least partly, through debt.
Further, a global test could put some companies at particular risk of having debt deductions denied
merely because of fluctuations in the value of assets (arising from currency movements and
commodity price cycles), or because of the point in time of their capital expenditure investment, and
not for any integrity concern.
As a senior Treasury official has noted, the proposal ‘would have increased the cost of capital for,
mainly, Australian subsidiaries of multinationals. Increasing the cost of capital is the equivalent of
increasing the corporate rate to them’ and would ‘reduce the attractiveness of that activity and
therefore the likelihood that it would proceed’.16
The OECD spent considerable time and effort over two years examining interest deductions in detail
as part of the OECD/G20 Base Erosion and Profit Shifting Project (BEPS). Labor’s alternative policy
is inconsistent with the OECD’s recommendations to target excessive deductions, as endorsed by the
G20 in November 2015. The OECD considered at an early consultation phase of the BEPS process
the option of limiting an entity’s interest deductions with reference to the position of its worldwide
group. However, after extensive consultation with stakeholders, the OECD’s final report maintains the
role of deductions for interest and recommended a best practice approach to limiting deductions for
interest to address BEPS concerns that ensure an entity’s interest deductions are directly linked to its
economic activities. The best practice approach recommended is in line with Australia’s existing thin
capitalisation regime.
A multilateral, co-ordinated international approach is the most appropriate way to deal with aggressive
tax minimisation strategies and modernise the international tax framework. The OECD integrity
measures are predicated on the basis that consistent international rules are the most effective way to
address aggressive tax minimisation. Labor’s plan is not in line with OECD best practice on interest
deductibility, would put Australia at odds with other jurisdictions and undermine common approaches
recommended by the OECD.
15
The Hon Scott Morrison MP, Treasurer, Interview with Fran Kelly, RN Breakfast, ABC Radio National, 7 October 2015. 16
Rob Heferen, Deputy Secretary Revenue Group, Australian Senate, Senate Economics Legislation Committee, Estimates, 2 June 2015, p. 52.
Minerals Council of Australia | 10
Capital expenses
The tax treatment of capital expenditure is also vitally important to the cost of investments in Australia
and need to be internationally competitive for Australia to attract capital to resource projects. Lower
tax depreciation rates that do not align with the life of the assets can put Australian mining projects at
a competitive disadvantage to comparable foreign mining projects in the pursuit of project funding.
Australia’s capital allowance arrangements, similar to regimes globally, spread deductions for capital
expenses over time. The uniform capital allowance (UCA) regime was introduced in 2001 and more
closely aligned tax depreciation with the economic life of the assets to ensure generally tax neutral
treatment of capital costs and a high degree of integrity in deductions for capital allowances.
There are very limited provisions for accelerated depreciation on certain assets which have been
introduced since the introduction of the UCA regime for specific policy reasons and to ensure
Australia’s regime is internationally competitive. For example, changes in 2006 to increase
calculation of the diminishing value depreciation rate from 150 per cent to 200 per cent encouraged
investment and more closely aligned the UCA regime with economic depreciation to improve
productivity and economic growth.
The 2012 Business Tax Working Group report did not recommend changes to existing arrangements,
noting that any ‘changes to depreciation arrangements could have a significant impact on the after-tax
return on investments particularly where there is a long lead time before income is produced’.17
17
The Treasury, Business Tax Working Group - Final report, report on business tax reform to the Treasurer, 2 November 2012.
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