Date posted: 27/02/2019

CA ANZ reveals top priorities for 2019 Australian Budget

In the lead up to an election year Budget, CA ANZ calls for a number of changes on the issues central to members and the wider community.

In Brief

  • We have repeatedly called for the post implementation review of the Tax Practitioners Board as CAs are subject to increasing layers of regulation
  • This year's Budget provides the ideal platform for the Government to release its well-considered response to Commissioner Hayne's Final Report
  • CA ANZ recommends replacing annual contribution caps with lifetime contribution caps including appropriate transitional arrangements

In the lead up to an election year Budget, CA ANZ calls for a number of changes on the issues central to members and the wider community including the taxation policy, small business, Banking Royal Commission, superannuation and living standards.

Irrespective of the electoral cycle, CA ANZ urges caution in the framing of this year's Budget against a backdrop of looming economic factors that could negatively affect Australia in the short to medium term including China's slowing economic growth, trade wars and high debt levels.

The recommendations made in CA ANZ's pre-budget submission on behalf of members address a range of important, ongoing and difficult issues in a disciplined, considered fashion. Coupled with our strong advocacy efforts with stakeholders, we continue to urge the Government to listen and act.

Tax reform

The Government should not make further overly-generous personal income tax cuts at a time when the Budget surplus should accumulate over the forward estimates to help fund fiscal stimulus measures.

This is also an opportune time to announce the outcome of consultations on proposed amendments to Division 7A (disguised distributions from private companies) in the Income Tax Assessment Act 1936. This announcement should be sufficiently detailed for advisers to confidently engage with their clients about new and existing Division 7A arrangements.

We have repeatedly called for the post implementation review of the Tax Practitioners Board as CAs are subject to increasing layers of regulation and the review is an opportunity to streamline existing processes and create uniform codes of conduct.

Helping hand to small businesses

Small businesses need more assistance in understanding cash flow and business planning. Any proposal to provide a tax offset to small businesses for the costs of obtaining business advice from approved accounting providers has our support. We support the Government's recent decision to increase and extend the threshold for the instant asset write-off for small business, and urge that this should not be a year-by-year whim but rather be a permanent feature of the tax system.

The Hayne Royal Commission Final Report

This year's Budget provides the ideal platform for the Government to release its well-considered response to Commissioner Hayne's Final Report, including a strategy that helps industry stakeholders and the Australian community to understand the issues identified and the policies proposed.

CA ANZ supports the Commissioner's finding in the Interim Report that more regulation is not necessarily the answer and urges the Government and regulators to foster a new sense of professionalism in the sector.

This is reflected in our ongoing advocacy work with the Financial Adviser Standards and Ethics Authority (FASEA), where we have advocated for greater recognition of the existing educational and ethical standards of Chartered Accountants.

Sustainable retirement incomes

CA ANZ recommends replacing annual contribution caps with lifetime contribution caps including appropriate transitional arrangements as an annual process is complicated, costly to administer and does not work for all, particularly women who take a break from work to raise families.

Along the same vein, considerations should be given to a permanent superannuation fund merger tax relief in view of the Productivity Commission's review into the efficiency and competitiveness of the superannuation industry.

The ATO's Practical Compliance Guide 2017/6 on superannuation fund death benefits creates a lack of regulatory certainty for those who provided advice and completed transactions on behalf of clients. A safe harbour – via a regulatory amendment to permit the ATO's administrative concession – is essential not only for super fund trustees but also their advisers such as accountants and financial advisers who have acted in good faith.

Engage on living standards

The Budget message should emphasise the high overall living standards enjoyed by most Australians and provide Budget policy measures that will further help those who are less well-off and or ensure a brighter future for the next generation.

New Zealand's upcoming 'Wellbeing Budget' and Living Standards Framework provides a useful reference point to consider the important, collective impact of policies on community and intergenerational wellbeing.

There is merit in the Government explaining our society's status on a range of multi-dimensional factors (such as financial, social, natural and human capital) and identifying in broad terms how newly announced policies will improve these outcomes.

Our 2019-20 Pre-Budget Submission

CA ANZ advocates on behalf of members with a pre-budget submission on key finance, tax and regulation issues.

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