Government rules are holding Australia back to being an international financial services hub as it imposes one of the largest tax burdens on managed funds, according to the Financial Services Council (FSC).
FSC chief executive, Sally Loane, said the country needed to help significant investors and skilled employees move to Australia, remove excessive taxes that penalised investors in financial services, and prioritise the development of corporate collective investment vehicles that were familiar to investors in Asia.
“These reforms would build on Australia’s existing strengths including our high-quality education and training sector, the rule of law, our political stability, and our well-established funds management industry servicing Australia’s superannuation sector,” she said.
Loane pointed to Morningstar research that found Australia’s tax and regulatory regime for managed funds was inferior to 20 other markets including the UK, much of Europe, Hong Kong, Singapore, Thailand, Taiwan, and Korea.
It noted that many other countries exempted investors from capital gains despite the Australian Government planning to increase the capital gains tax (CGT) on managed funds.
“The FSC has done a great deal of work over the past decade supporting the case for Australia to become a global financial services hub, building on the important work of Mark Johnson. We would welcome all efforts by the Australian Government to remove the barriers that are holding back Australia from growing as an international financial centre,” Loane said.
