Archived News for Finance Sector Professionals - December, 2011
The Federal Government has announced it will implement the third and final element of an investment manager regime (IMR), which was a key recommendation of the Johnson Report. The IMR will be backdated to 1 July 2011.
The Minister for Financial Services and Superannuation, Bill Shorten, said "The IMR will provide certainty of tax treatment for the funds management sector, which in Australia has $1.8 trillion of funds under management (or 131 per cent of Australia's GDP) - $61 billion of which comes from offshore, and will further enhance Australia as a financial services centre in the Asia Pacific region."
The announcement means income, gains or losses, which have an Australian source, from portfolio interests or financial arrangements of a foreign managed fund, will be excluded from the calculation of the fund's taxable income (and that of its non-resident investors).
The exemption will not apply to the extent that withholding tax is currently payable on the income.
Furthermore, the exemption will not cover income or gains from an interest, other than a portfolio interest in a publicly traded company, in taxable Australian property.
The exemption will be restricted to foreign managed funds domiciled in countries that are recognised by Australia as engaging in effective exchange of information.
The third element of the IMR has been the subject of a Board of Taxation review. The Board's report - Review of an Investment Manager Regime as it relates to Foreign Managed Funds - can be found on the Board's website at www.taxboard.gov.au. The Government's response to the Board's recommendations can be found here.
Legislation for the first two stages of the IMR, announced in December 2010 and January 2011 respectively, is currently being finalised and is expected to be introduced into Parliament in the first half of 2012.
Mr Shorten said that, as recommended by the Board of Taxation, the Government has decided to extend the previously announced element 2 (which exempts from Australian tax the conduit income of foreign funds portfolio investments) to foreign non-portfolio investments of managed funds.
"The implementation of the IMR for managed funds ensures that Australia's taxing arrangements with regards to passive portfolio investments are in line with international norms and will make Australia a more attractive place to do business for foreign funds", Mr Shorten said.
The Government will consult with industry and tax professionals on the development of the legislation to implement the final element of the IMR.
Storm brews over UniSuper
The National Tertiary Education Union (NTEU) has demanded amendments to existing superannuation agreements to ensure that employers pay shortfalls in superannuation to avoid extensive cuts to the 80,000 employees in the higher education sector.
Government launches $200 million renewable energy venture fund
The Federal Government announced that Southern Cross Venture Partners has been appointed fund manager of the country’s largest renewable energy venture capital fund, making available a total of $200 million to support renewable energy companies from early next year.
APRA announces new Executive General Managers
The Australian Prudential Regulation Authority (APRA) has announced two new senior appointments to the positions of Executive General Manager of the Diversified Institutions Division and Executive General Manager of the Supervisory Support Division.
Insolvency reform package announced
The Federal Government has announced a package of reforms aimed at modernising and hamronising Australia’s insolvency industry.
Government releases retail corporate bond discussion paper
The Federal Government has released a discussion paper for consultation on reforms to develop the country’s retail corporate bond market in Australia.
Report blames government for cost inflation
A report authored by Dr Oliver Mar Hatwich from the Centre for Independent Studies has found that Australia has become one of the most expensive countries to live in, thanks to Federal Government policies.
ANZ breaks from RBA
ANZ has announced it will no longer tie its interest rate decisions to the official cash rate released by the Reserve Bank of Australia (RBA).
NSW launches responsible investment report
The New South Wales Department of Trade and Investment has co-launched the Responsible Investment Association Australasia’s (RIAA) 2011 Benchmark Report.
Government opens $100 million venture fund
The Federal Government has announced $100 million in venture funding as part of the Innovation Investment Fund (IIF).
ASIC to start second phase of advice practice review
The Australian Securities and Investments Commission (ASIC) has announced it will contact 30 Australian financial services licensees to form part of the commission’s review of financial advice industry practice.
Banks pass on cuts
All four of the major Australian banks have passed on Tuesday’s rates cut, with ANZ being the first of to pass on the rate reduction, lowering its rates for mortgages and small business lending by 0.25 per cent, reducing its standard variable rate to 7.3 per cent.
Senior appointments to RBA Board
The Federal Government has announced Dr Phillip Lowe to the position of Deputy Governor of the Reserve Bank and Heather Ridout as a member of the Board.
RBA lowers rates
The Reserve Bank of Australia (RBA) has announced the lowering of the official cash rate by 25 basis points, bringing the country’s official interest rate to 4.25 per cent.
Economic growth beats forecasts
Results published by the Australian Bureau of Statistics (ABS) shows the Australian economy is growing faster than expected, notching up a 1 per cent growth rate in the September quarter.
S&P downgrades Australian banks
Ratings agency Standard & Poor’s (S&P) has downgraded the credit rating of Australia’s big four banks, marking a fall from AA to AA-.
Government extends draw-down relief
The Federal Government has announced the extension of drawdown relief for account-based pensions to the 2012-13 financial year, following a 25 per cent reduction to the minimum payment amounts for such accounts.
Gale leaves Count Financial
The Chairman of Count Financial, Barry Lambert, has announced that Andrew Gale has offered his resignation from the positions of Chief Executive Officer, Managing Director and as a Director of the company.