Plans by Australia’s ruling Federal Labor administration to lower corporate taxes face an uncertain future, with major corporations rejecting the government’s options for funding a cut in the company tax rate.
After a previous attempt to cut corporate taxes was derailed in parliament, the government responded by offering a tax reduction on the condition that it was offset by the removal of business tax breaks. To fund the 5 percentage point cut recommended by former treasury secretary Ken Henry, businesses would have to surrender annual tax breaks worth up to A$9.1bn a year.
But the Business Council of Australia (BCA) said it would not support any of the options for funding lower company taxes, which it claimed could do more harm than good.
The rejection from big business casts serious doubt on the ability of Treasury’s business tax working group to reach an agreement with companies on how ‘revenue-neutral’ company tax cuts may be funded. The BCA’s chief executive officer (CEO), Jennifer Westacott, said the proposed cuts to fund lower taxes would damage investment, and risked leaving the economy worse off overall.
‘‘The revenue needed for a material company tax rate cut can’t be found through other business tax changes without very deep impacts on some companies and sectors,’’ she said, adding that the government should instead begin a 10-year reform process to lower company taxes. “We must not underestimate the danger of compromising the viability of our capital investments, which are expected to account for 30% of national economic activity by next year.”
Tax breaks that the Treasury had suggested might be eliminated include those on mining exploration; depreciation rules that benefit airlines and oil companies; support for research and development, and tax breaks on business borrowing.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.