HENRY TAX REFORM AND ACCOUNTING INDUSTRY RESPONSE

The following industry bodies, professional associations, and other important stakeholders, have responded to the Henry Tax Report:

• Institute of Chartered Accountants in Australia (ICAA) – The Institute says Australia has “taken a timid first step towards serious tax reform”. “There is clearly a lot more work for the government to do in mapping out a tax reform agenda for the decades ahead; [yesterday] was certainly a start, but it didn’t go far enough in meeting our expectations,” said Tax Counsel for the Institute, Yasser El-Ansary.
• CPA Australia – According to CPA Australia, the Government’s “response to proposals in the Henry review is an opportunity missed because it is too narrow in focus”. “CPA Australia would have liked to see a broader, more comprehensive approach, with a clearer and more immediate plan of execution to give business much needed certainty,” said CPA Australia CEO, Alex Malley.
• Taxation Institute of Australia (TIA) – According to the TIA, the Government should allow pre-filled income tax returns for most Australians. Senior Tax Counsel, Robert Jeremenko, said that while the Institute generally welcomed the Henry report and the Government’s response to it, “giving millions of taxpayers a choice to claim a standard deduction for work related expenses should occur sooner rather than later”.
• National Institute of Accountants (NIA) – The NIA has welcomed measures to assist small businesses saying they will provide cash flow benefits for small business.
• Institute of Actuaries of Australia – The Institute has congratulated the Government for boosting the adequacy of superannuation for many workers in its response to the Henry Review, however, it said it believed more work must be done in the short-medium term to tackle problems around Australia’s ageing population.
• Deloitte – According to Deloitte, adoption of the Henry recommendations on personal savings discount and offshore funding will likely have a positive effect on the funding strategies of Australian banks over the longer term.
• Investment and Financial Services Association (IFSA) – IFSA has described the Government’s announcement to increase the superannuation guarantee rate to 12% as “the most significant reform of superannuation in a generation”.
• Australian Bankers’ Association (ABA) – The ABA said each of its key agenda items was addressed in the Henry review. Steven Münchenberg, Chief Executive of the ABA said the Association was pleased to see the emphasis on national savings.
• Australian Petroleum Production & Exploration Association (APPEA) – Although noting it was concerned about the impact of the Government’s response to the Henry review on future gas investment, APPEA said it welcomed the Government’s decision to introduce a resource exploration rebate and retain the existing Petroleum Resources Rent Tax (PRRT) regime.
• Australian Chamber of Commerce and Industry (ACCI) – The ACCI said the Government’s response to the Henry review “is a mixed bag for the business community with welcome steps towards a lower corporate tax rate and small business concessions on depreciation cancelled out by tax hikes on employer superannuation and a new tax on the resources industry”. The ACCI has also issued a media release to “correct the record” in relation to media claims on how the increase to the superannuation guarantee rate to 12% will be funded.
• Australian Retailers Association (ARA) – According to the ARA, the Government’s response to the Henry review had “failed to offer any incentive for small business employment growth”.
• NAB and MLC – NAB and MLC & NAB Wealth, the bank’s wealth management division, have backed the Government’s recommended reforms for the super industry and welcomed the recommendation to increase the super guarantee contribution rate to 12%.
• ClearView – ClearView has welcomed the Government’s changes to superannuation but has warned whether current salary sacrifice arrangements will remain.
• Australian Council of Trade Unions (ACTU) – The ACTU has welcomed the Government’s move to lift the superannuation guarantee contribution rate to 12% by 1 July 2019.
• Australian Council of Social Service (ACOSS) – ACOSS has welcomed the release of the Henry report, but said it was disappointed that Government has ruled out a number of its key recommendations.