Tax reform welcomed by the banking sector

Sydney, 2 May 2010: The Australian Bankers’ Association (ABA) welcomes the release of the Henry Tax Review Report and the Government’s response which has been announced in Canberra this afternoon.

The Henry report, titled “Australia’s Future Tax System” is a comprehensive and detailed analysis of Australia’s tax and transfer system, which explores many options for reform.

Steven Münchenberg, Chief Executive of the ABA, said: “Each of the ABA’s key agenda items was addressed, with specific and positive recommendations, including our top three priorities. The Henry report will inform discussion on tax reform for many years to come.”

The Government’s response, titled “Stronger, Fairer, Simpler: A Tax Plan For Our Future” provides a solid framework for ongoing tax reform and puts on the short to medium term agenda many priorities identified in the Henry report.

Mr Münchenberg said: “We were pleased to see the emphasis on national savings, which has long been an issue in Australia. We look forward to working with the Government on building on the superannuation reforms announced today, to further improve incentives to save, for example, by removal of the current impediments to saving in deposits.”

“A media statement from the Prime Minister recorded the Government’s intention to address this and other reforms supported by the Henry review, as part of a ‘full second term agenda.’”

All businesses in Australia will welcome the reduction in the company tax rate. Banks and other corporates will also welcome the explicit commitment to retain the dividend imputation system.

Mr Münchenberg said: “Australia’s company tax rate has been a disincentive to direct and portfolio investment in Australia.”

“Our tax rate has been high in comparison with OECD countries and this change will position us closer to the average for similar-size countries. The imputation system has supported neutrality in financing options and integrity in the tax system. We welcome its retention and the certainty it provides to investors.”

The ABA has been a significant contributor to the Henry Review, and looks forward to working with the Government on implementing the Prime Minister’s ‘first wave’ of reforms and on developing the longer-term reform agenda.

For further information: 

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS