Sydney, August 23, 2002: The Australian Bankers’ Association welcomes the Review of International Taxation Arrangements as an important step in further expanding the contribution that the corporate sector generally, and the financial services sector in particular, make to the Australian economy.

Financial services are not only critical to the smooth and safe operation of all Australian businesses through prudent lending and deposit taking activities, the financial services sector is also a key driver of economic growth in its own right.

1.      The financial services industry has been the fastest growing contributor to GDP in recent years.  During the year 1999-2000, the finance and insurance sector contributed 7.2% to Australia's GDP, up from 6.8% in 1998-1999.[1]

2.      The sector has enjoyed one of the fastest growing multifactor productivity rates in Australia at 4.3% per annum.[2]

3.      The financial services sector is Australia’s third largest exporter of services.[3] Since 1986, financial services exports have grown by 15% a year, above the total goods and services export growth average of 9%.[1]

4.      Around thirty percent of bank profits are earned overseas.

David Bell, Chief Executive of the Australian Bankers’ Association, said business has a key role in helping to shape the international tax regime in Australia, changes to which have the potential to stimulate future capital investment, allow Australian companies to raise cost-effective capital, and facilitate the movement of staff with specialist skills.

“The ABA is pleased the Federal Government is seeking to improve Australia’s attractiveness as a global and regional financial centre. In addition, the Federal Treasurer has delivered on an election commitment to consult widely with key stakeholders and industry representatives on Australia’s international tax regime.”

“The ABA sees this review as a continuation of consultation already underway on a number of key areas in tax which affect all businesses, not just the financial services sector.”

“The ABA hopes international tax reform will lead to an increase in the international competitiveness of Australian companies in global business and capital markets,” Mr Bell said.

For further information contact:

Heather Wellard ABA PR
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS