Jjj> A. UTALIA
PRIME MINISTER
FOR MEDIA -2 JUNE 1985
Employers who provide child care facilities for their
employees are eligible for a range of tax deductions under
the Income Tax Assessment Act.
My Department recently sought clarification from the
Australian Taxation Office on the applicability of the
relevant sections of the Act to the provision of child care
facilities. As a result, the Commissioner of Taxation,
Mr Boucher, has advised of a wide range of deductions.
It is the Government's policy to expand the provision of
child care facilities and, in particular, to encourage
the growth of work-based and work-related child care places.
By the end of 1987 the Government will have doubled the
number of community-funded child care centres. When we camne
to office only 4.5 per cent of Australia's children aged
under 5 had access to a government centre; by 1987 9 per cent
will have access.
A number of private sector employers, especially some who are
participating in the Affirmative Action Pilot Program, are
increasingly recognising the need to prov~ ide child care for
their employees. I hope the deductions available under the
Income Tax Assessment Act will encourage the provision of
high quality care by private sector employers to supplement
those provided by the Government. These deductions are
outlined in the Status of WOmen Report, prepared by the Office
of the Status of Women and published in the June issue of
The Australian Women's Weekly.
Day-to-day running costs, including salaries and wages of
child care attendants, power, heating, lighting and rent
are treated as normal business expenses and are fully tax
deductible. Expenses incurred by an employer in fitting out a child care
facility qualify for. the special rate of depreciation allowed
for employers who provide certain facilities for their
employees. Expenses such as lockers and kitchen facilities
are deductible at a depreciation rate of thirty-three and a
third per cent per annum. Toilet and washing facilities attract
the ordinary rate of depreciation.
E 2.
Construction costs and building alterations for the
provision of child care are also deductible at a rate of
four per cent under the Government' s increased tax relief
to business for building construction. Any business which
incurred capital expenditure for a child care facility after
21 August 19.84 would be eligible for this rate. Costs of
construction or alterations begun between 19 July 1982 and
21 August 1984 are deductible at a lower rate of 2.5 per cent.
Building expenses incurred before that period are not
deductible. The Taxation Commission advises that claims relating to the
provision of child care facilities must relate to expenditure
incurred to produce assessable income. Some expenditure
might not be wholly allowable, such as in cases where an
employer derived exempt income as well as assessable income
from business pursuits. Each claim would be considered in
the light of its own facts.
Some employers may, however, prefer to develop child care
facilities with assistance from the Children's Services
Program. Under that Program, where Government subsidies for both
capital and recurrent costs are available, a proportion.
of child care places must be reserved for members of the
general community.
The June Status of Women Report also provides information
about the Federal Government's plan for creating 20,000
additional child care places within the next three years
through the Children's Services Program. My colleague,
Senator Grimes, the Minister for Community Services, has released
further details of this plan.
The Report includes an exclusive survey of the views of
women's organisations on tax reform options, and a guide to
how to use the Family Court.