Date posted: 22/05/2019 4 min read

Coalition win to boost AU economic outlook

Our key policy priorities for the returned government.

In brief

  • The Coalition forms majority government
  • Stable and consistent leadership will continue to be required
  • CA ANZ’s tax, super, financial advice and climate change policy priorities for the returned government

The Coalition's return to government following the Australian Federal Election on 18 May, will need a stable and consistent approach to lift business and consumer confidence and achieve sustained national growth and prosperity.

The policy making process must be more timely, meaningful, consultative and rigorous. Regulation must also be smarter, simpler and more streamlined to reduce red tape and support better law enforcement.

Chartered Accountants Australia and New Zealand (CA ANZ) has set out its tax, superannuation, financial advice and climate change policy priorities for the returned government to help strengthen and protect Australia’s economy, community and environment over the next three years.

Tax

The Coalition has a long list of announced but un-enacted measures, including a number of tax-related bills that lapsed when the election was called. To provide greater certainty for business, the government should announce its position on whether these measures will proceed as announced, proceed with modification or not proceed.

There have been numerous reviews into the operation of Division 7A of the Income Tax Assessment Act 1936, particularly in relation to the treatment of unpaid present entitlements. The significant amounts involved are continuing to grow. CA ANZ urges the government to resolve this long running issue.

CA ANZ encourages the government to prioritise initiatives to improve productivity and innovation for business, such as continued improvements in the R&D Tax Incentive program for start-ups and small-medium enterprises, together with further measures to support the digitalisation of small businesses.

Superannuation

CA ANZ urges the government to continue to engage constructively with industry stakeholders on any changes to superannuation policies and their implementation which may arise from the:

  • Financial Services Royal Commission (FSRC) recommendations, and
  • Productivity Commission (PC) review of the efficiency and competitiveness of Australia's superannuation system.

A key matter to weigh up will be implementation of the FSRC and PC review's similar suggestions about adjusting how employee default funds are selected.

The government should review the current process of assessing the annual concessional contributions made for each superannuant which causes severe tax penalties for those who exceed the various caps. CA ANZ recommends removing the annual contribution cap assessment process and replacing it with lifetime contribution caps, including appropriate transitional arrangements.

The government should also consider:

  • the suitability of joint spousal accounts within superannuation funds, including for pensions
  • adjusting substantially upwards the $450 per month salary threshold for compulsory employer super contributions, and
  • reviewing super fund and tax rules to ensure the risk of elder abuse is minimised.

Finally, the government should announce its intentions about various superannuation policies contained in legislation that lapsed due to the election or had not been introduced into Parliament.

Financial advice

The government should continue to work cooperatively with key stakeholders, including professional bodies, to implement the important recommendations of the FSRC, the Tax Practitioners Board (TPB) review and Financial Adviser Standards and Ethics Authority (FASEA) reforms to improve financial advice standards in Australia and better protect consumers.

There is clearly a need to reduce regulatory complexity following the introduction of seven new FASEA Legislative Instruments, the new disciplinary system for financial advisers and oversight body for ASIC and APRA recommended by the Royal Commission as well as ASIC's Supervisory Cost Recovery Levy.

CA ANZ urges the government to accelerate development and implementation of smarter, simpler and more streamlined regulation and licensing rules that will help to reduce red tape and improve the enforcement of laws, regulations and codes of conduct in the financial advice industry.

Climate change

Climate change policy should not be subject to political changes and instead should provide certainty for the future to enable business and households to transition to the low carbon economy.

CA ANZ strongly supports the recommendation of the 2017 Senate Economics Reference Committee Inquiry into carbon risk, for the government to end the uncertainty regarding climate change policy and develop a stable and consistent policy.

Government should set a clear pathway for Australia to transition to a low emissions economy by 2050 to ensure the path is an achievable trajectory and also to provide long-term certainty for business. Providing certainty will also enable businesses to manage the impacts in the most cost effective way for them by enabling them to plan ahead.

The government should also review the wide range of existing energy efficiency and emission reduction measures holistically to identify where gaps or conflicts lie and to simplify them.

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