Tax breaks top of Budget wish list for IT industry
- 12 May, 1999 13:05
As this is written the Budget is yet to be announced but the speculation as to its effect on the IT industry has been running rampant.
Industry groups have been campaigning for GST tax concessions, especially for small businesses, the reduction in capital gains tax, skills development programs and research and development tax breaks and financial assistance.
The Australian Society of Practising Accountants (CPA) recommends tax concessions for costs incurred by businesses making the transition to the GST. "For the GST, the Government should not only make software expenditure to be immediately deductible for all businesses but should also make other concessions available for small businesses to help them prepare for the GST," said senior tax consultant for the CPA, Paul Drum.
However Drum is not confident that this offer will be extended to hardware as well as software upgrades and it might not be as extensive as the 1998 Budget was with its treatment of millennium bug expenditure deductions.
The Australian Information Industry Association (AIIA) was more concerned with amendments to the capital gains tax in Australia but is not holding any hope of substantial changes until after the GST has been finalised. At present the capital gains tax is an impediment to the growth of the Australian IT industry, an AIIA spokesperson explained.
The Australian Computer Society (ACS) focused on securing funding for the education sector so as to alleviate some of the pressure the current skills shortage is exerting on the industry. "One of the primary ways of helping to reduce the skills shortages is to fund undergraduate places," claims Prins Ralston, president of the ACS. The Government has attempted to begin this process already with the establishment of a skills shortages package that offers an analysis on the current situation, a call for more industry sponsorship of training and collaboration with universities, and a Web site dedicated to careers in the IT industry.
AIIA supported the push for educational benefits in the Budget, extending it to include the revitalisation of Australia's current research and development taxes in order to properly compensate and reward companies for their R&D efforts. Ralston believes this is an extension of education. "You need to fund innovation. At the moment R&D is a straight expense, the Government should be looking at providing a 150 per cent rebate instead."