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Federal pre-budget an opportunity to address global financial crisis

Publication date: 19 Jan 09 | Source: THE TAX INSTITUTE

Australia’s premier professional tax body, the Taxation Institute of Australia, released its Pre-Budget submission urging the Government to consider a range of measures in the context of its 2009-10 Budget to protect individuals and businesses from the impact of the global financial crisis.

President of the Taxation Institute, Joan Roberts, said there are a number of tax opportunities for the Government to assist individuals and businesses cope with the challenges of the current unprecedented economic circumstances.

“Whilst it’s great that the Government’s current Review of Australia’s Future Tax System is looking at ways to improve our tax-transfer system significantly” said Ms Roberts, “the Government can also act now to provide appropriately targeted tax relief for individuals and businesses in economic crisis before the broader Review runs its course.”

“Our primary concern is for the Government to ensure the ongoing viability of business in the current economic climate” she said.

“This can be done in a number of ways, including increasing capital allowances and the scope of the recently announced investment allowance incentive, providing greater general flexibility for PAYG instalment variations and calculating income instalments, clarifying the Commissioner’s powers to apply refunds against debts due but not payable, and allowing imputation credits to flow through family trusts that are in loss positions.”

The Taxation Institute also believes there is an opportunity for the Government to lessen the impact of the global financial crisis in the past twelve months on superannuation savings. In particular, fund members’ account balances and retirement entitlements have been affected in various ways for those wanting to draw on their benefits through income stream payments such as pensions.

“The Institute recommends the Government consider providing more flexibility in the calculation of superannuation income stream payments to take account of the impact of the financial crisis and ensure super fund members aren’t forced to take income streams that can’t be sustained by their actual account balances” said Ms Roberts.

The other main area of opportunity identified by the Taxation Institute is climate change.

“We are particularly keen to see the Government introduce measures that allow tax relief for early abatement activities and to ensure Australia’s tax laws don’t impede the development of alternative energy sources, in particular geothermal options.”

“The Taxation Institute believes the Government can address these crucial issues in its Budget deliberations as they should not be delayed until the Government acts on the outcomes of its Review in 2010”, concluded Ms Roberts.

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About the Taxation Institute of Australia:  The Taxation Institute is Australia’s largest and most diverse body of tax professionals working together to improve the tax system and the delivery of tax services through education, sharing of information and consultation.

Media Contacts: Joan Roberts, President - Taxation Institute of Australia on 0419 308 141

Dr Michael Dirkis, Senior Tax Counsel - Taxation Institute of Australia on 0417 400 349