Interest rates are on hold but what are the other key indicators for the year ahead? We break it down.
NAB’s Group Chief Economist, Alan Oster, looks at the key reforms impacting Big business. The Federal Budget focuses on a crackdown on profit shifting, banning of dividend washing, reducing thin capitalisation safe harbour, removal of R&D and exploration incentives.
Big business is a major loser in this year’s budget as the Government plans to clamp down on loopholes to retrieve $4.2 billion over the next four years.
Key reforms are a crackdown on profit shifting, banning of dividend washing, reducing thin capitalisation safe harbour, removal of R&D and exploration incentives, and new requirements for all big businesses to move from quarterly to monthly PAYG tax instalments.
Companies most hit by reforms include multinationals and companies operating in highly geared industries such as infrastructure, resources and private equity. Moreover, there are some concerns that new reforms may discourage foreign investment in Australia.
The Business Council of Australia (BCA) said “the business tax changes announced today represent another lost opportunity to do tax reform properly, which risks reducing our competitiveness and affecting business confidence.” In particular, the BCA cites changes to thin capitalisation rules as a risk that could “(impact) foreign investment, and potentially deterring companies from locating and investing in Australia. Piecemeal tax changes can add to perceptions of country risk when it comes to investing in Australia.”
For further analysis download the fact sheet.
Our team of leading economists, tax and superannuation experts will continue to unpack the Federal Budget 2013 to help you understand what it means. Visit all the latest articles, fact sheets and video commentary – 2013 Federal Budget – Business Research and Insights.
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