The Financial Services Council (FSC) has welcomed the introduction of legislation to implement the Corporate Collective Investment Vehicle (CCIV) and the retirement income covenant (RIC).
Sally Loane, FSC chief executive, said the FSC had been advocating for the introduction of the CCIV for many years.
“Foreign capital currently only contributes five per cent of investment into Australian managed funds, $138 billion as a proportion of $2.6 trillion,” Loane said.
“We want to see Australia financial services industry contribute more to post-COVID national economic growth and the CCIV will help achieve this objective.”
Consultation on the CCIV opened in August and the FSC’s submission said more needed to be done to remove barriers to Australia as an exporter of financial services.
The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 was introduced into Parliament this week which included the RIC.
The CCIV regime would allow fund managers to use a corporate structure with flowthrough tax treatment for investment funds and provide international investors, many of whom were not from common law countries, opportunities to invest through a corporate vehicle that is familiar to them.
Loane said the CCIV would reduce tax barriers for Australian fund managers and help deliver an economic windfall as the economy recovers from the COVID-induced downturn.
“The FSC also strongly supports the retirement income covenant, which will require superannuation funds to develop a retirement income strategy for fund members who are retired or nearing retirement,” Loane said.
“The FSC welcomes the Government taking on board feedback from the superannuation industry and implementing a principles-based approach to the covenant.
“There is an urgent need for the retirement income covenant as a growing proportion of Australians move into retirement, and we encourage the parliament to pass the bill without delay.”
