Donaldson, Helen (SEN)
From:	Laurie [laurieag@onthenet.com.au]
Sent:	Thursday, 28 October 1999 2:09 AM
To:	fpa.sen@aph.gov.au
Subject:	Business Taxation Reform - Submission
The Secretary
Senate Finance and Public Administration References Committee
SG 60
Parliament House 
CANBERRA ACT 2600				fpa.sen@aph.gov.au

Dear Sir/Madam,

I am writing to provide a submission to your inquiry into 'Business
Taxation Reform' as experiences in system design and development have
given me unique insights into the technical funding matters referred to
by your inquiry. 

I believe that before you can make any decision on how to actually
calculate revenue neutrality, you must clearly understand the
differences between how things were calculated in the past and how they
are done now. 

In 1990, as a Systems Development Officer working under the direction of
the Gold Coast District Engineer for Telecom Australia, I wrote Capital
Expenditure Evaluation software based on Federal Government Accounting
Standards. This software was used by Telecom Design Engineers in South
East Queensland as a tool to help them determine the most cost effective
solution for exchange and plant siting problems.  Depreciation was not
included in the equation and the retirement/decommissioning cost was
limited to turning off the plant/asset at the end of its design life. 

It is becoming evident that taxation benefits given are the amounts
hidden from public scrutiny through federal and state 'Commercial In
Confidence' outsourcing deals with third party benefactors. (36% of
depreciation and other taxation benefits given are foregone as actual
tax payable) This undeclared hidden amount would be doubled if Treasury
claimed depreciation benefits on top of leasing and rental expenditure.
(Australian Financial Review article, 22/10/1999, p73 'Major property
investors campaign to keep depreciation', has a supporting reference to
the use of this form of logic by the treasury) 

There also seems to be a complete lack of public accountability in
determining a base point for calculating revenue neutrality with regards
to CGT changes. If an increasing proportion of Australian assets are
placed in foreign ownership as a deliberate political policy,
responsible global partners must assume that there is a larger than
equal diminishing future capability to repay foreign debt from ever
increasing foregone amounts of taxation being given to these same global
partners.  While it appears that all Australians will make up the huge
differences in foregone CGT the question remains, is this form of
revenue neutrality ethical, or does it just reflect the abuses of a
federal government that does not need to constitutionally ratify
constitutionally claimed establishment powers after 13 years?

Yours sincerely,

Laurence N. Kennedy B.Sc.(comp.)
20 Lergessner St.,
BIGGERA WATERS Q 4216
(07) 5537 8860						
28th October 1999