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A return to sovereign risk

Published on 01 Jul 12 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The term “sovereign risk” originally referred to the risk that a government might default on its debt or loan obligations. More recently, the term has come to have a wider meaning and, typically in this wider context, it involves changing the rules in the middle of the game so that people who have made investment decisions and structured their enterprise on the basis of the assurances as to what the government will do find that those assurances have proven valueless. In the author’s view, Australian taxation policy unfortunately now exhibits many features of this broader concept of sovereign risk.

Among these are taxes imposed contrary to specific undertakings, retrospective legislation, unknown legislative rules, inappropriate considerations being taken into account in legislative policy, and the changed treatment of existing long-term investments. Recent developments in each of these aspects of taxation governance are considered in turn in this article.

Author profile:

Author Photo - David RUSSELL
David RUSSELL
David is admitted to practice in New South Wales, Queensland, Victoria, the Northern Territory, the Australian Capital Territory, New Zealand, Papua New Guinea and the Courts of Dubai International Financial Centre. He was first appointed Queen’s Counsel in 1986 and holds that office in all the above Australian jurisdictions. He currently practices in Sydney (Ground Floor Wentworth Chambers) and Brisbane (Sir Harry Gibbs Chambers) with a principal focus on revenue law generally. He has acted for Commonwealth and State Governments as well as individuals and corporations. He has had a long connection with the Taxation Institute of Australia including being its President from 1993 to 1995 and President of the Asia Oceania Tax Consultants Association from 1996 to 2000.
Current at 17 May 2008 Current at 07 August 2008 Click here to expand/collapse more articles by David RUSSELL.
 
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