The Gillard Labor Government is seeking feedback from industry on the major element of its historic package of reforms to the Australian shipping industry.
The tax reforms will stimulate investment in Australian shipping and encourage Australian ownership of ships and ship operations. They include:
- an income tax exemption where Australian shipping operators will not pay any income tax on core shipping activities
- an accelerated rate of depreciation for ships so that they can be written off in ten years rather than the current average twenty years, including roll-over relief from income tax if a replacement ship is purchased
- a refundable tax offset for companies employing Australian seafarers on international voyages.
The Australian shipping industry has been operating at a substantial disadvantage compared to operators who register in many other countries around the world and have access to beneficial tax, regulatory and employment arrangements.
These reforms will address the current decline in the Australian shipping industry - in 1995 there were 55 Australian operated ships - now there are only 22.
The Tax reforms are part of a broader shipping reform package which aims to:
- foster global competitiveness in a simplified three-tier licensing framework for participation in the coastal trade
- establish an Australian International Shipping Register to put Australian companies on a level footing with their international competitors
- establish a Maritime Workforce Development Forum to progress key maritime skills and training priorities.
Exposure draft bills that will be administered by the Department of Infrastructure and Transport are available at www.infrastructure.gov.au/maritime/shipping_reform/ and Exposure draft bills containing the tax reforms can be found on the Treasury website.
Submissions on the exposure draft bills and accompanying exposure draft explanatory memorandums are sought by close of business on 5 March 2012 to facilitate the commencement of the reforms on 1 July 2012.