I am announcing today that the Government will amend the law so as to exempt from income tax the grants paid as part of a business re-establishment package to eligible businesses and primary producers in those parts of the Katherine region that were devastated by floods in January 1998.

The grants amount to $10,000 and are paid from the Katherine & District Business Re-Establishment Trust fund. The Fund was established to provide direct financial assistance to small businesses and primary producers to allow them to recommence business activities and re-establish local jobs.

The details of the Trust were announced by the Prime Minister in his joint press release with the Chief Minister of the Northern Territory on 5 February 1998.

The purpose of the fund is to ensure that Katherine is operating normally again as soon as possible. The primary focus of this fund is to help restore the local economy in the Katherine region by getting business started again, so that income can start to flow and people can begin to rebuild.

Legislation to give effect to the Government’s decision will be introduced as soon as possible.

CANBERRA

4 June, 1998

Contact officer:

Troy Czabania

Australian Taxation Office

(02) 6216 1200