ATO RECOGNISES CMPA INPUT
The Australian Taxation Office has recognised the efforts and input of the CMPA during their recent review of the effective life of quarrying assets.
ATO Effective Life, Centre of Expertise, project officer, David Matheson said the CMPA’s input into the review process had “considerable impact”.
Mr Matheson said the ATO preferred to work with representative organisations rather than individuals or companies alone. “We prefer to make first contact with associations that have the ability to represent an industry or a significant portion of the industry,” he said.
During the review the CMPA hosted various meetings, site visits and made representations as well as presentations to the ATO. Consultants were also employed by the CMPA to prepare submissions.
“The meetings, site visits, submissions and telephone conversations with the CMPA and its members were extremely important both from the point of asset identification and in identifying factors that determined the asset’s effective life,” Mr Matheson said.
Mr Matheson recognised the domination of the major companies in the Australian quarrying and extractive industry but said the input of smaller, often family owned companies was extremely important in the review process.
“We understand there are over 2600 quarries in Australia. The three largest entities are said to provide 75 to 80 per cent of output in dollar value. As such, in all states other than Victoria, they tend to dominate the industry associations. The CMPA proved an effective way of providing the input of smaller quarry operators.”
Mr Matheson also recognised the CMPA’s ‘approach’ to the review saying some CMPA informal discussions and site visits were “input … in the most usable form.”
Site visits were also recognised as critical to the ATO’s understanding of the circumstances of an asset’s use.
As the majority of CMPA members actually own the capital equipment under review, Mr Matheson said this often translated to a more passionate approach to the review process.
Mr Matheson said the input of all industry bodies and associations was valuable to a process that was longer than any other effective life review.
“Delays in receiving industry submissions necessitated the decision not to proceed with the determinations in December 2002. This review involved more site visits and industry consultation than any other effective life review. We believe that consultation with industry is crucial to determining acceptable lives.”
In lieu of these results the CMPA has presented its opinion to Minister Theophanous who has agreed to support a letter to the policy division of Federal Treasury regarding the CMPA’s concerns.
The changes will have a serious impact on the business owners ability to invest in capital projects. People with any inclination of purchasing equipment should seriously consider when to make the purchase as the new depreciable lives come into effect on the 1st of July. For further information refer to correspondence sent to Members on the 2nd of May.
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