5Costs of construction or modification

5 Costs of construction or modification

(1) For the purposes of this Act, the eligible costs of the construction or modification of a bountiable vessel shall be taken to be: (a) the design costs incurred by the shipbuilder in respect of the production of the vessel, not being costs referred to in paragraph (b) or (d); (b) so much of the direct labour costs incurred in Australia by the shipbuilder in relation to employees who are actually engaged in the production of the vessel as are directly referrable to the production of the vessel; (c) the direct material costs incurred by the shipbuilder in respect of goods that are: (i) actually incorporated in the vessel or in the modification of the vessel, as the case requires; or (ii) consumed in the construction or modification of the vessel, as the case requires; (d) subcontracting costs incurred by the shipbuilder in respect of work carried out by a person other than a registered shipbuilder, being work that is directly connected with the production of the vessel in Australia; (e) where, in the contract for the production of the vessel, provision is made for the fitting out of the vessel: (i) so much of the labour costs incurred in Australia by the shipbuilder in relation to employees who are actually engaged on the fitting out of the vessel as is directly referrable to that fitting out; (ii) the materials costs incurred by the shipbuilder in respect of goods that are actually incorporated or consumed in the fitting out of the vessel; and (iii) subcontracting costs incurred by the shipbuilder in respect of work carried out by a person other than a registered shipbuilder, being work that is directly connected with the fitting out of the vessel; (f) where, in the contract for the production of the vessel, provision is made for the trialling of the vessel either in Australia or elsewhere—the costs incurred by the shipbuilder that are referrable to the trialling of the vessel, other than the costs of any modification of the vessel arising from the trialling that is not carried out by the shipbuilder in Australia; and (g) the costs of the transportation of the vessel upon completion of its construction or modification to a place specified in the contract for the production of the vessel for the purpose of delivery. (2) For the purposes of subsection (1), labour costs incurred by a shipbuilder in relation to employees actually engaged on the production or fitting out of a bountiable vessel that are directly referrable to that production or fitting out do not include: (a) amounts paid by the shipbuilder by way of contribution to a superannuation scheme for the benefit of those employees; (b) the value of any long service leave to which any of those employees becomes entitled; (c) workers’ compensation payments; or (d) amounts paid by the shipbuilder by way of payroll tax. (3) For the purposes of subsection (1), material costs incurred by a shipbuilder in respect of goods that are: (a) actually incorporated in the bountiable vessel, in the modification of the bountiable vessel, or in the fitting out of the bountiable vessel; or (b) consumed in the construction of the bountiable vessel, in the modification of the bountiable vessel, or in the fitting out of the bountiable vessel; means the full into‑store cost to the shipbuilder of goods so used and, without limiting the generality of the foregoing, includes costs incurred by the shipbuilder in respect of materials used in, or component parts of, the bountiable vessel, that are imported from a foreign country, including any freight or insurance costs associated with that importation that are paid by the shipbuilder. (4) For the purpose of subsection (1), costs incurred by a shipbuilder in transporting a bountiable vessel to or from a place for the purpose of trialling the vessel or for the purpose of carrying out any modification arising from that trialling shall be taken to be costs referrable to the trialling of the vessel.