QANTAS wants a $1.36 billion tax break from the Federal Government via a "green" depreciation allowance on fuel-efficient aircraft.
The national carrier says a more favourable tax regime would help it to fund $38 billion worth of new planes.Under the plan, put to the Government's review of aviation policy, Qantas is seeking a series of measures designed to improve cashflow and lower the high rates it is charged to borrow for new aircraft because of a 49 per cent cap on foreign investment.
As well as a $1.36 billion "green" tax break that would allow depreciation rates on new aircraft to be cut from 10 years to three or five years, it is calling for capital-intensive businesses to be able to claim investment allowances on income-producing assets.
"Government can play an important leadership role, introducing an accelerated 'green' depreciation regime, reducing the effective life of an aircraft and encouraging rapid deployment of emerging and breakthrough technologies as soon as they became available," the submission says.
The 156-page submission also restates the airline's push for the Federal Government to remove the 49 per cent cap on foreign investment in Qantas and for the lifting of separate restrictions on limits other airlines are allowed to hold.
"All operators in the Australian domestic market can freely source their capital with the exception of Qantas," the submission stated.
The airline says that the 49 per cent foreign investment cap increases the cost of equity capital by 2-3 per cent.
"It has been estimated that, when foreign ownership sits below the 49 per cent limit, Qantas shares trade at a discount to Australian industrial stocks," the airline noted, adding that the limit constrained the depth and breadth of foreign investors the airline could access."
Qantas argued it was disadvantaged by the favourable depreciation rates enjoyed by overseas airlines.
"A reduction (in depreciation rates) to three years would reduce Qantas' tax liability over the next 10 years by $1.36 billion in present value terms," the submission notes.
The submission added that the figure would be reduced to $952 million if a five-year period was adopted.
Qantas calculated an investment allowance would save $1.44 billion to $1.848 billion on top of the benefits likely to arise from accelerated depreciation.
It said its new 787 Dreamliner would be about 20 per cent more fuel-efficient than the 767.
Qantas shares closed 9 down yesterday at $3.16.
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