The financial services industry has broadly welcomed the Federal Budget, particularly those elements going to providing tax relief on savings and the creation of Australia as a financial services hub for Asia.
Investment and Financial Services Association (IFSA) chief executive, John Brogden said the Budget would greatly advance Australia’s ability to become a global investment hub, while the announcements around reducing the investment withholding tax and establishing a new mandated investment trust regime would all advance Australia’s reputation internationally.
For its part, the Self Managed Superannuation Fund Professionals Association (SPAA) welcomed amendments to the superannuation legislation allowing the Commissioner for Taxation to exercise discretion on excess contributions.
SPAA chief executive, Andrea Slattery said the amendment corrected a major flaw in the current system. By comparison, the accounting bodies provided only luke-warm support with respect to the tax initiatives contained in the Budget.
The Institute of Chartered Accountants in Australia said the measures aimed at simplifying individual tax returns represented the start of a serious tax reform agenda for the country.
“The announcement of a standard $500 tax deduction alongside a simplified personal tax return process, will deliver average compliance cost savings of around $300 a year for over 5 million Australians who currently visit a tax agent every year,” the Institute’s Tax Counsel, Yasser El-Ansary said.
However he said the jury was out on whether or not a $500 deduction would be enough to entice most taxpayers to tick the box and accept the offer.
Similarly, the chief executive of accountantsRus, Adrian Raftery claimed the $500 standard tax deduction announced in the Budget was a fraction of the average currently claimed by taxpayers.
“The average tax deduction claimed by an individual taxpayer is $3,311 according to the latest statistics from the Australian Taxation Office,” he said.
