30 June 2005

Australia’s peak business tax group, the Business Coalition for Tax Reform (BCTR), acknowledges and supports the Government’s progress in the implementation of important reforms to Australia’s international taxation system.

At a recent meeting of the BCTR, the encouraging pace of international tax reform was noted. “The BCTR would like to commend the Government on its approach to date on the modernisation of Australia’s international tax arrangements,” Mr John Stanhope said. “It is pleasing to note”, Mr Stanhope added, “that most of these measures have attracted support form across the political spectrum. This bodes well for future international tax reform measures”.

The BCTR agrees that a number of the measures announced by the Government in the 2005 Budget and subsequently will assist in making Australia more attractive to foreign investors, and represent a positive move towards assisting Australia to remain globally competitive.

“The tax measures aimed towards temporary residents are welcomed as they will assist both large and smaller Australian businesses to attract skilled labour,” Mr Stanhope said. The Government’s persistence with this measure, having seen it twice rejected by the Senate, is very positive.

The conduit foreign income measures, which have now been released as an exposure draft, will cover a broader range of foreign income, and will also apply where conduit income flows through more than one Australian corporate entity. The narrowing of the class of assets on which foreign investors are to be taxed in Australia to real property is another important reform measure that will bring us closer into line with many of our major trading partners.

“In combination with other changes that have already been implemented, these measures will further enhance Australia’s attractiveness as a location for regional headquarters, as well as improving the competitiveness of Australian based multi-nationals with foreign shareholders,” Mr Stanhope said.

Other countries constantly update and refine their international tax arrangements, and while it behoves Australia to continuously review its own competitive position, the BCTR believes this is an appropriate time to congratulate the Government on a job well done.

The Business Coalition for Tax Reform (BCTR) is a forum for bringing together the views of the business community on tax reform issues. The BCTR aims to promote and improve Australia’s taxation system.

The members of the BCTR include Australian Food and Grocery Council, Australian Industry Group, Australian Institute of Company Directors, Australian Retailers Association, Australian Stock Exchange, Business Council of Australia, Corporate Tax Association of Australia, CPA Australia, Council of Small Business Organisations of Australia, Federal Chamber of Automotive Industries, International Banks & Securities Association Australia, Insurance Council of Australia, Investment and Financial Services Association, Master Builders Australia, Meetings Industry Association of Australia, Minerals Council of Australia, Property Council of Australia, Real Estate Institute of Australia and The Institute of Chartered Accountants in Australia.

Contacts:

John Stanhope, Chair, BCTR through Angela Martinkus, Corporate Affairs Manager Finance and Administration Telstra, (03) 9634 3872.

Frank Drenth, Chair, BCTR International Tax Committee (Corporate Tax Association), (03) 9600 4411