Detail devils in Coalition costings

Spending plans for next four years put flesh on infrastructure and tax moves

September 6, 2013

The Coalition’s costings for the next four years have surfaced on the eve of the election, helping put flesh on its tax and infrastructure investment approaches.

The Opposition says the document commits it to more than "$20 billion in new or upgraded infrastructure projects".

"An elected Coalition Government would immediately start discussions with the Department of Treasury, State Governments and the private sector so the money can start flowing as soon as practical," it adds.

Its headline pledge to repeal carbon tax legislation will mean $13.51 billion of revenue foregone, which it expects to recoup $7.47 billion in associated expenditure including $5 billion in business compensation measures.

As part of the removal of the mining tax package, accelerated depreciation of motor vehicles will be discontinued, saving $425 million.

In a blow to Coalition partners the Nationals, it confirmed that it will end ‘tax loss carry back’, a popular small-business concession, to save $950 million.

"As part of its plan to repeal the Mining Resource Rent Tax, the Coalition would, if elected, discontinue a number of small business tax concessions," Australian Trucking Association (ATA)
Communications Manager Bill McKinlay says.

"These include discontinuing tax loss carry backs and removing an accelerated depreciation provision for small businesses that was first introduced in July 2012.

"Under this provision, small businesses can immediately write off $5,000 of the cost of a motor vehicle and depreciate the rest under a concessional pooled depreciation rate of 15
per cent
in the first year and 30 per cent
in later years.

"The tax concession is only available to businesses with a turnover of less than $2 million that use the simplified depreciation system. As a result, its removal would have no impact on most trucking businesses. The tax office guidance material reflects this reality: its examples all relate to courier vehicles and utes.

"Trucking businesses generally depreciate their trucks and trailers using the statutory effective life caps that the ATA successfully defended in 2012. These caps would not be affected by the Coalition policy."

The move on mining will see the related Regional Infrastructure Fund ditched, saving nearly $2.5 million, though some projects will be funded separately.

Urban rail spending will be sacrificed while urban and country road projects will be accelerated or have funding increased.

The only rail spending in the document appears to be the Melbourne-Brisbane Railway at $180 million starting in 2014-15.

The bridges renewal project is slated to start in 2014-15, with $180 million spent over three years.

In its response to the costings, the Australian Logistics Council (ALC) reiterated its belief that political considerations should be quarantined from infrastructure decisions.

"Infrastructure funding decisions need to be based on supporting projects that achieve positive long-term economic returns, rather than projects that have political appeal but do not have a productivity or efficiency pay-off," ALC Managing Director Michael Kilgariff says.

"Therefore, if Mr Abbott is elected Prime Minister on Saturday, I encourage him and his transport minister to honour infrastructure projects designed to improve supply chain efficiency, particularly projects focussed on easing congestion around our ports.

"Road and rail projects designed to improve access to our ports, such as those linking Port Botany, are vital to our nation’s productivity and I encourage the Coalition Government to recognise this if they are elected to government."

The costings can be found here.

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