Corrs In Brief: Infrastructure - preserving the value of early stage tax losses

As part of the 2011 Federal Budget, the Treasurer announced a proposal to introduce new incentives to encourage investment in “designated infrastructure projects”. The incentives are aimed at facilitating access to, and preserving the value of, early stage tax losses.

Treasury has now released a discussion paper, “Tax loss incentive for designated infrastructure projects”, as part of the consultation process for the proposed measures.

Whilst the additional detail in the paper is welcome, the preservation of access to and the value of early stage tax losses is only one of the challenges in promoting equity investment in brownfield projects. In particular, structural issues within the superannuation industry and stamp duty remain significant impediments to equity investment in mature infrastructure projects. Corrs Tax has been actively involved in preparing submissions to State and Territory Governments in relation to the underlying stamp duty issues and it is hoped that they will respond to our call for reform.