MAY 2002

• Pollution and Payouts

• Water Trading

• Cemeteries

• Are Legal Expenses Tax Deductable?

• Wind Farms

POLLUTION AND PAYOUTS
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Recently, a subsidiary company of a major international oil company that enjoys monopoly trading in certain parts of rural Victoria , contaminated foreshore and adjoining land.  Sealing on underground petrol tanks leaked.

The company attempted to avoid liability by declaring insolvency and appointing an administrator. When this happens, Section 440D of the Corporations Law prevents litigation, save for prosecution unless  the administrator consents. Unless litigation has commenced prior to the appointment of the administrator it virtually becomes barred.

‘Clean up’ can then only be achieved if the EPA has issued appropriate clean up notices and is willing to properly and rigorously mandate them. Kellehers Australia finds the EPA slow to act and bureaucratic.  The philosophy of working with industry to achieve environmental protection, in our experience, makes the EPA reluctant to go hard and fast against even blatant acts of pollution.  The EPA seems to regard industry as its “clients” rather than the community or the environment.  

In our case the big oil company holds a fixed and floating charge over the assets of its subsidiary. This ensures that its “debt” must be met prior to persons who suffer damages as a result of oil spill or leak. Such losses become part of unsecured creditors pool. 

In the absence of the political will insisting on executive performance and/or adequate laws of standing enshrined in the Environment Protection Act, it is unlikely that blameless individuals who find their land contaminated will find a staunch ally in their taxpayer funded environmental guardian.

Meanwhile, oil sales are booming.

WATER TRADING
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In an attempt to increase the ecological sustainability of the farming industry, a new system of water trading has been proposed as part of the National Government’s Water reforms. It allows farmers to sell excess water to those in need of it or where it has the highest value.

Water allocation could be recorded on a Water Entitlements register, similar to the land titles register, administered by the Department of Natural Resources. Conditions, restrictions and details of the allocation including  annual volume are recorded.

Water trading systems have existed for over 10 years but only occur between farmers within particular irrigation schemes.

The scheme’s proponents believe the financial benefits of water trading will result in more efficient water use by farmers.  For example, water may have a greater value as a trading commodity than as irrigation. There  is investment potential in controlling water catchment areas. Therefore the National Competition Council has recommended that market prices, volumes traded and market drivers (such as water use) be made available to the market. It is expected that, speculative purchase of water allotments will create a more active marketplace and minimise fluctuations in the price of water between seasons.

The water trading industry has far to go. However, given political support for rural development, water trading could become a significant industry.

CEMETERIES
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The State Government has recently released yet another Review document concerning Victoria ’s cemeteries. ( Victoria ’s Cemeteries and Crematoria: Options for Legislative Change-A Discussion Paper)

The document ignores the extensive work previously undertaken by the Parliamentary Committee reviewing Cemeteries Legislation Leonie Kelleher was a member of that committee.  It also ignores the extensive public comment made to the earlier Review document.  Recommended previously, was the establishment of a heritage fund to support on-going cemetery maintenance.

So now the process restarts, with the issue of cemeteries being viewed as substantially a health concern.  Ignored once again are the important heritage issues concerning on-going maintenance, methods of conserving memorials and the landscape and strong social and emotional  significance of these places.

The officer at the Department of Health advises that new legislation will be introduced in the 2002 Spring Session of Parliament.

Now we wait and see.

ARE LEGAL EXPENSES TAX DEDUCTIBLE?
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Legal expenses can be tax deductible when they can be classed as a general business expense, incurred in the course of producing assessable income or in carrying on a business for that purpose, and which are neither of a capital, private or domestic nature. (s 8-1,     ITAA97).

Land use planning costs can in certain circumstances be deductible if they fall into this category.

WIND FARMS
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The State Government is slowly inching towards formulating a Wind Farms Policy.

It will impact hugely on our southern coast. As Australians, we love our oceans and seas. We need to input into this policy.

Shrouded in secrecy, a Steering Committee

assisted by a Department of Infrastructure Working party, is working on a State Policy and Planning Scheme amendment framework for presentation to Cabinet. We understand that there will be a consultation program.

In our view it does not assist the Wind Industry, Councils or other interested parties if the policy is prepared without some public ability to input to the Policy before a Draft is prepared. Our State needs an agreed policy so that certainty is achieved as to the communities agreed future energy strategies.

A sense among interested persons that the Wind Industry will be “in” on forming the policy but the public is “out” - seems unhelpful in developing community trust in the process and outcomes.

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