THE Audit Office, Treasury and the Tax Office will appear together tomorrow at a public hearing into the Tax Expenditures Statement.

The Statement attempts to measure the billions of dollars of concessions in the tax law and its goal is to increase the transparency and scrutiny of tax exemptions.

The Audit Office released audit reports into the Statement in 2008 and 2013. The 2013 audit found that some of the recommendations from the first audit had not been fully implemented or had been discontinued. The topics covered were: better integrating tax expenditures in the Budget process; regular reviews of tax expenditures; and improving the quality of the estimates.

Bert van Manen MP, Chair of the House of Representatives Standing Committee on Tax and Revenue, said the Audit Office does important work for the Parliament and Australia.

“The Audit Office has noted that recommendations on tax expenditures in the 1970s to 1990s were often not implemented. The same has occurred to the Audit Office recommendations of 2008. The Committee believes these issues are worth examining again.”

In its submission, the Audit Office has proposed the following priorities for Treasury:

• establishing a program of prioritised reviews to inform improvements in tax expenditure measures and to indicate whether tax expenditures are meeting their policy aims
• putting back in aggregate, trend and comparative reporting of tax expenditures to improve the visibility of their size and importance.

In its submission, Treasury has stated that, following further consideration, it believes the audit recommendations are no longer relevant or appropriate. Its concern is that the estimates are often misunderstood and their limitations are not taken into account.

Public hearing

Date:Wednesday, 9 September 2015
Time: 4.10 – 5.10 pm
Location: Committee Room 2R1, Parliament House, Canberra

The committee is still accepting submissions to the inquiry, which can be lodged through the Committee’s website.

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THE Australian uranium mining industry is set to double in size if an agreement to sell uranium to India is ratified, Parliament’s Treaties Committee has found.

The Joint Standing Committee on Treaties has tabled its report into the Australia – India Nuclear Cooperation Agreement, which could see Australian uranium in dozens of new Indian electricity generating nuclear reactors over the coming decades.

Committee Chair, Mr Wyatt Roy MP, said that the deal could increase export revenue by an estimated $1.75bn and double the number of Australians employed in the uranium mining industry.

The deal will be particularly important for rural and remote areas in states like South Australia and Western Australia, where uranium mining is expected to ramp up.

Queensland could also significantly benefit if the Queensland Government reverses its decision to stop uranium mining.

In India, Australian uranium could help bring low-carbon emission electricity to the 400 million people who do not have access to power at present.

While the Agreement is designed to ensure that Australian nuclear material is only used in safeguarded facilities and cannot be diverted for use in nuclear weapons, the Committee has made a number of recommendations to strengthen safeguards and improve non-proliferation outcomes.

“Critically, on the basis of assurances from the Director-General of the Australian Safeguards and Non-Proliferation Office, the Committee trusts that Australian nuclear material in India can be tracked and accounted for, ensuring that it is not used for anything other than peaceful purposes,” Mr Roy said.

The committee has recommended that the regulation of nuclear safety and security at Indian nuclear facilities be addressed before the sale of uranium takes place. 

Another recommendation is that Australia commit diplomatic resources to encourage India to make genuine disarmament advances, such as signing the Nuclear Test Ban Treaty.

“The Committee has successfully navigated a series of complicated issues to reach a point where, with certain qualifications, it supports a deal that will cement Australia’s relationship with an emerging world power,” Mr Roy said.

The full report is available on the committee’s website or by contacting the committee secretariat on (02) 6277 4002.  

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PUBLIC hearings on the China Australia Free Trade Agreement will conclude this week, with the Department of Foreign Affairs and Trade and other agencies responding to issues raised throughout the Treaties Committee’s inquiry.

Representatives from Master Builders Australia and Australian Pork Limited will also appear to provide evidence on the impact of the Agreement on their industries.

China provides Australia’s largest agriculture and fisheries market and biggest export market for resources, energy and manufacturing. Chinese investment in Australia has grown strongly in recent years and the country is also Australia’s largest services market.

The Agreement is expected to eliminate or significantly reduce tariffs on a wide range of Australian goods exports including beef, dairy, sheep meat, wine, horticulture and energy and resource products. It also delivers China’s best services commitments to date, including the provision of new or significantly improved market access for financial, legal, education and health and aged care services.

Over six weeks of public hearings across the country, the Committee has heard evidence from a range of witnesses, including representatives from agriculture, manufacturing, business and export groups, academics and unions.

Committee Chair, Mr Wyatt Roy MP, said the inquiry process had helped the Committee understand the impact the Agreement would have on different industries.

“The hearings have helped us understand how the China Australia Free Trade Agreement will affect Australian businesses, particularly the opportunities for growth that it provides,” he said.

“We have also identified key aspects of the Agreement that are concerning some in the community and will seek clarification on these issues from DFAT and other agencies in our final hearing this week.”

The Committee is due to report on the inquiry into the China Australia Free Trade Agreement in October.

Public Hearing:

Monday 7 September 2015

Committee Room 2R1, Parliament House Canberra

10.30am: Free Trade Agreement between the Government of Australia and the Government of the People’s Republic of China

1.00pm: Close

The hearing will be broadcast through: www.aph.gov.au/live

Hearing programs, copies of the treaties and submissions received can be found at: http://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties

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VECCI Chief Executive Mark Stone said VECCI urges the Parliament of Australia to approve the China-Australia Free Trade Agreement (ChAFTA) this year, given the Agreement’s capacity to widen and deepen trade and investment with one of the world’s fastest growing economies.

"With a diverse and competitive industry base, Victoria is well placed to leverage major growth opportunities from Australia's largest goods export destination ($90 billion in 2014), and largest services export market ($8 billion in 2014)," Mr Stone said.

"The prospects for new trade and investment extend not only to our agriculture sector, but resources, energy, manufacturing and service industries.

"ChAFTA must be approved by the Parliament this year so that business can benefit from tariff relief, with some tariff cuts occurring immediately and others to take affect from the start of 2016.

"VECCI is united with the Australian Chamber of Commerce and Industry, National Farmers’ Federation and Minerals Council of Australia in its call for Parliamentary approval of this crucial deal in 2015."

Employers can access tools, tips and information on getting into exporting or growing existing exports by visiting www.vecci.org.au

THE Australian Government has today released the first draft regulation under the new Biosecurity Act 2015, giving interested stakeholders the chance to put their ideas forward on how biosecurity risk will be assessed when the new Act takes effect next year.  

Minister for Agriculture, Barnaby Joyce, said the Biosecurity Import Risk Analysis Regulation (BIRA regulation) has been released for a three month consultation period.  

"The biosecurity import risk analysis process, the regulations and the opportunity for stakeholders to comment were key issues raised by stakeholders during consultation on the Biosecurity Act," Minister Joyce said. 

"I am pleased to follow through on the government's commitment to meaningful consultation with stakeholders and I invite all interested people and organisations to provide comment on the exposure draft regulation. 

"All comments received during the consultation process will be considered in drafting the final BIRA regulation. 

"Our enviable clean and green biosecurity status relies on getting these regulations right—and we are all aware of the potential consequences of a pest and disease incursion to our domestic industries, environment and access to overseas markets."  

Minister Joyce said today that the draft BIRA process under the new legislation was guided by the recommendations from the recently releasedexamination of the import risk analysis (IRA) process report. 

"We heard from stakeholders that it is important to consult earlier, to access external expertise and to better explain how regional differences are considered when conducting an IRA," Minister Joyce said.  

"The feedback we received through the examination of the IRA process from stakeholders has directly shaped the draft BIRA regulation. 

"I would also like to reassure stakeholders that the development of the BIRA process does not mean previously completed IRAs are invalid or will be redone."  

The submissions period for the BIRA regulation is open from today until 30 November 2015.    

For more information on the exposure draft and the consultation process, please visit agriculture.gov.au/biosecurity/legislation/new-biosecurity-legislation.

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THE Federal Government is currently considering options to develop the inland railway between Melbourne and Brisbane in the most efficient and cost effective way possible, according to Finance Minister Mathias Cormann and Infrastructure Minister Warren Truss.

"This inland rail route offers a strategic opportunity to invest in nationally significant infrastructure, which would service Australia for the next 150 years," the Ministers said in a joint official release.

"It offers the prospect of significant improvements in the productivity of freight services in Eastern Australia by providing a new high performance freight rail corridor.

"Work on developing a business case and potential financing and delivery options for this project is currently underway.

"The Australian Rail Track Corporation will be an important part of developing any options on this project.

"As such, the scoping study into options for the future management, operations and ownership of the Australian Rail Track Corporation will need to be broadened to take this important strategic initiative into account.

"Consequently, the Department of Finance has decided not to proceed with the current tender processes for business and legal advisers for the ARTC Scoping Study. A new process to appoint suitable advisers will begin later this year.

"The ARTC scoping study remains on track for consideration by the Government in the 2016-17 Budget process."

THE Australian Government is calling for submissions on the proposed rules and regulations for the Emissions Reduction Fund safeguard mechanism.

The safeguard mechanism will start on 1 July 2016 and will be an integral part of the Emissions Reduction Fund – along with the crediting and purchasing elements.

"The Government has already consulted extensively on the design of the safeguard mechanism, and the draft rules and regulations released today include feedback from businesses and community groups on the consultation paper released in March 2015," Federal Environment Minister Greg Hunt said.

"Businesses and the community are invited to make submissions about the drafting of the safeguard mechanism regulations by 16 September 2015 and rules by 21 September 2015.

"The safeguard mechanism has been designed to ensure that emissions reductions purchased by the Government are not displaced by significant increases in emissions above business-as-usual levels elsewhere in the economy.

"The Government will consider the submissions received during this public consultation period before finalising the rules and regulations next month.

"A final decision on business access to high quality, prescribed international units under the safeguard mechanism will be reviewed in 2017-18 subject to the accounting rules established following the Paris climate conference later this year.

"With our Direct Action plan we will meet Australia's 2030 target of reducing emissions by 26-28 per cent below 2005 levels.

"Only the Coalition is committed to taking serious action to tackle climate change without hurting Australian families and businesses in the process with a painful carbon tax. We are already achieving significant results.

"In just the first Emissions Reduction Fund auction, the Government has contracted more than 47 million tonnes of emissions reductions. That's around four times the amount of emissions reduction achieved during Labor's carbon tax experiment – and we've achieved it at around one per cent of the cost."

For more information about the Emissions Reduction Fund, visit www.environment.gov.au/emissions-reduction-fund.

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THE BOARD of Hunter Water Corporation (Hunter Water) has resolved to explore the sale of its multi-award winning Kooragang Island Water Scheme (KIWS).

Proceeds from the sale will be used by Hunter Water as part of its commitment to invest over $1 billion in new water and wastewater infrastructure over the coming decade.

The KIWS is an advanced water treatment plant located within the industrial precinct of Steel River in Mayfield West which uses a micro-filtration and reverse osmosis process to produce recycled water superior in quality to rain.

Commissioned in November 2014, the plant is capable of delivering up to 3.3 billion litres of highly treated recycled water per annum, which is sold under a long term contract with fertiliser and explosives manufacturer Orica.

Hunter Water Interim Chief Executive Officer Jeremy Bath said the sale would have no impact on the operation of the Plant, on the local water supply or on water prices.

"The KIWS will continue to supply Orica with several billion litres of recycled water each year, regardless of who owns it and so the proposed sale will have no impact on the local water supply. The plant is considered by our pricing regulator to be an “unregulated asset” meaning any costs or income associated with the plant are not considered when determining water prices.

"Selling the KIWS benefits Hunter Water's balance sheet by freeing up capital to invest in the region over the coming decade and will also reduce expenditure on servicing the borrowings associated with its construction.

"Hunter Water intends to invest more than $1 billion to improve infrastructure over the coming ten years as part of our commitment to ensure the region is ready for the population growth forecast over the coming three decades.

"By carefully and selectively identifying assets that free up capital, Hunter Water can ensure we still get the benefits that come with infrastructure such as the KIWS, but without the substantial associated costs.

"The Kooragang Island Water Scheme has the potential to reduce Orica's demand on the potable water supply by up to 5%, effectively increasing Hunter Water’s storage levels by that same amount. It has also substantially increased the percentage of sewage we recycle to around 8% of total wastewater.

"Given the quality of the plant and the rarity of such assets on the open market, I expect there will be a substantial number of interested parties," he said.

Those wishing to register their interest are invited to contact Pottinger on +61 2 9225 8000.

The KIWS is currently owned by Hunter Water, but operated and maintained by Veolia.

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