Michael Ronaldson (Victoria, Liberal Party) Share this | Hansard source

Yes, indeed; it was unanimous. And you agreed wholeheartedly; thank you, Senator Murray. The other matter is the accessibility of the production offset to animators. The committee was very concerned about this matter. We believed the evidence that was given to us was quite legitimate. There were legitimate concerns and we made recommendations in relation to them in recommendation 4. I am very pleased, and I am sure my colleagues on the committee will be equally pleased, that the government has addressed those matters with a further amendment. On behalf of the committee, I thank the government for doing that so rapidly.

The third matter is the depreciation of low-value capital assets used in film production. This is a more difficult issue. We received evidence from Louise Houston, Tax Manager of Warner Bros Entertainment Australia, in relation to this matter. I will not take up the time of the chamber in relation to all the matters detailed by Ms Houston, but I will briefly quote from a letter.

The proposal to include the balancing adjustment of the capital asset in the calculation of qualifying production expenditure for the film production offsets is welcome.

It then goes on to talk about the EM, in paragraph 10.72:

However, it appears that subsection 376-125(7) may not apply to a balancing adjustment for a depreciating asset required to be allocated to a low value pool. This would unfairly disadvantage a production company which for example is a member of a tax consolidated group which has previously elected to allocate assets to a low value pool. This is because such an election is irrevocable and applies to all companies within the tax consolidated group, irrespective of whether they were even in existence at the time the original election was made.

The government believes that work is required to properly investigate their concerns; that, if an amendment were warranted, there would not be sufficient time for it to be drafted; and that it would not be appropriate, in the government’s view, to delay passage of the bill to accommodate that investigation. I can say, however, to those with a concern in this area that the government will look further at the matter and give it appropriate consideration after the passage of the bill—which, in normal circumstances, is entirely appropriate.

I will not take up any further time. This is a very important initiative. The committee—I am sure I can speak on behalf of the committee—thanks the government for moving very quickly in relation to these two matters of great importance to the sector.