QUEENSLAND'S peak resources sector body has welcomed the state government’s environmental approval for a new gas project that will benefit Bowen Basin communities for at least 40 years.

The Chief Executive of the Queensland Resources Council Michael Roche says Arrow Energy’s Bowen Gas Project (BGP) project, about 150km south west of Mackay will provide more than 1500 jobs during the construction phase from 2016, and about 700 permanent jobs.

‘The government’s approval of the environment impact statement (EIS) for the project supports Arrow’s announcement yesterday that it was beginning front-end engineering and design work for the proposed Bowen upstream gas project.

‘The environmental assessment of this project has been in train since 2012 and will now be assessed by the Australian Government.'

BGP involves developing Arrow’s tenements near its existing gas fields with staged expansion of about 4000 gas wells and gas infrastructure in an 8000km² area. 

The project will supply local and export markets.

www.qrc.org.au

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THE Council of Small Business Australia (COSBOA) has expressed extreme disappointment with the Federal Government’s decision to back date the removal of tax support provisions for small business as a result of the mining tax repeal, which was announced earlier today.

Peter Strong, Chief Executive of COSBOA said that the change should not be back dated as this creates confusion and extra paperwork for the small business community as well as those who, in good faith, purchased goods and/or claimed these as part of their tax return.

“We can only express disbelief that the back dating was kept in place.  This shows a complete lack of understanding about the way small businesses operate. The logical decision would have been to keep these provisions in place, pending the outcomes of the Tax Whitepaper that the Government has commissioned,” Mr Strong said.

“Another issue is that the changes take effect half-way through the last financial year. No government should implement changes to the tax system half way through a financial year.  To think that 2.1 million small business people wake up every day and go to the Treasury website to check what changes to the tax system may have occurred is totally unrealistic.”

This announcement will only impact small businesses and not big business, Mr Strong also noted.

http://www.cosboa.org.au/

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THE Federal Government has announced the dates from which the small businesses concessions attached to the repeal of the mining tax will no longer apply.

The dates are the same as those proposed in the original repeal Bill (that was defeated in the Senate) for the instant asset and motor vehicle write off.

The government has however backdated the repeal of the company loss carry back concession. This concession was originally meant to be removed from the date of royal assent. The original repeal bill was introduced on November 11, 2013 so the removal of this concession from July 1, 2013 will come as a shock to small businesses.

The Minister for Finance, Mathias Cormann, has set the following dates of effect for relevant taxpayers:

• abolition of the mining tax from October 1, 2014
• abolition of the company loss carry-back from July 1, 2013
• reduction of the instant asset write-off from January 1, 2014
• abolition of accelerated depreciation of motor vehicles, also from January 1, 2014.

In relation to the instant asset write off, when eligible small business taxpayers are purchasing depreciating assets, the reduced threshold of $1,000 will apply from January 1, 2014 rather than the $6,500 threshold that was available before this date.

The accelerated depreciation for motor vehicles will cease to be available to eligible small businesses for motor vehicles purchased after January 1, 2014.

In respect of the loss carry-back concession, it cannot be claimed for the whole of the 2013-14 financial year as the government has backdated this change to July 1, 2013.

The ATO has advised that it will waive all penalties and interest in instances where taxpayers have chosen not to prepare their returns on the basis of the government's announcement of these measures, if they seek to have their income tax assessments amended within a reasonable time.

As the original repeal bill was introduced in November 2013 and these changes received royal assent on September 5, 2014 — almost a full year afterward — the date of implementation has come as a surprise to Taxpayers Australia and the wider small business community.

Head of Tax with Taxpayers Australia, Mark Chapman, criticised the new measures.

“With the mining tax itself not being abolished until October 1, 2014 the government appears to be on a tax grab from small businesses by making these measures retrospective. In addition, the added burden of amending tax returns to comply with the new law when taxpayers have claimed these concessions in good faith in accordance with the law as it stood at that time is unfair and contrary to the principle of reducing red tape.

“In relation to the loss carry back concession, removing the ability to claim this measure for the 2014 income year entirely, given that the original bill proposed the measure would apply from the date of royal assent, is even more disappointing,” Chapman added.

“The small business community badly needs certainty and clear guidance from the government rather than backdated measures that leave them further out of pocket even after they have, in some cases, lodged their tax return and paid their liability for the year.”

Taxpayers Australia is a not-for-profit organisation committed to a fairer and more transparent taxation system for every Australian taxpayer. Its aim is to provide taxation practitioners, superannuation professionals, small businesses and individuals with up-to-date, informative and above all understandable information about taxation – to ensure that every Australian pays the right amount of tax and not a cent more.

Visit our website: www.taxpayer.com.au

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IN A FISCAL deficit environment that Australia finds itself in, it’s time to have a hard look at the share buyback scheme loophole that continues to reduce the Commonwealth revenue line, says the Institute of Public Accountants (IPA).

“The share buyback system is inequitable and reduces Australia’s revenue options to fund other initiatives, especially those supporting small business,” said IPA chief executive officer, Andrew Conway.

“People on higher marginal tax rates receiving a dividend have to pay ‘top-up’ tax and are therefore, much less likely to participate in share buyback schemes.

“This creates an inequitable distribution of franking credits and reduces the attraction of buybacks for specific groups of taxpayers. Off-market buybacks are mostly attractive to low tax paying shareholders.

“Given that one of the principles of developing tax policy is equity, then this issue should be considered in future tax reform, so that all taxpayers receive the same treatment.

“For entities that pay no tax and superannuation funds paying no or up to 15 percent tax, share buybacks can be a genuine benefit as they receive the additional incentive of an imputation rebate from the Government.

“While buybacks may be a useful tool for corporate entities in terms of capital management, they come at a cost to the taxpayer, as Treasury coffers miss out on top up tax due to  skewed  distribution of franking credits.

“Telstra is the first major listed company since the GFC that has announced a buyback and no doubt there will be many more to follow.  Therefore, it may be timely to consider the tax treatment of buybacks, for the benefit of all taxpayers and for the benefit of companies that are offering share buybacks.

“The Government should seriously look at the artificial streaming of franking credits which buybacks create,” said Mr Conway.

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies with more than 24,000 members and students in over 51 countries.  The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants.  The IPA was recognised in 2012 as Australia’s most innovative accounting organisation and listed in the top 20 in the 2012 BRW Most Innovative Companies List.  

www.publicaccountants.org.au

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