THE House of Representatives Committee on Tax and Revenue has commenced an inquiry into the tax treatment of employee share schemes (ESS).

In 2015 the Federal Government made a number of changes aimed at improving the taxation treatment and administrative arrangements for ESS. The Committee will inquire into the effectiveness of the 2015 ESS changes and examine the challenges faced by companies in setting up an ESS arrangement and how taxation treatment affects the structure of current ESS arrangements.

Submissions from interested individuals and organisations are invited by Thursday, March 19, 2020. The preferred method of receiving submissions is by electronic format lodged online using a My Parliament account.

Further information about the inquiry including the terms of reference is available on the Committee’s website.

Public hearings for the inquiry will be held in due course and notified through the Committee’s website.

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TOURISM AUSTRALIA's new pitch to win back international visitors is a welcome step in helping to drive new visitation following the setbacks experienced by tourism businesses across the nation as a result of January's bushfires.

“This is the right time to be hitting the accelerator and encouraging our international visitors back to Australia and this campaign is one of the key demand driver activities the tourism industry has been waiting for," ATEC managing direcgor Peter Shelley said.

"January’s bushfires and the global media focus saw masses of international visitor cancellations and impacted tourism businesses across the country.  These steps towards rebuilding the momentum in some of our key Asian markets including Singapore, Malaysia, Indonesia and India as well as the United Kingdom, will reveal the true story that Australia is still a fantastic place to visit and has as much to offer as ever.

“We’ve missed out on one of the most lucrative booking periods of the year, but the team effort between industry, Tourism Australia and the federal and state governments means we are putting our best efforts towards regaining ground and reviving our $45bn export tourism industry," he said.

“We have to bust the myth that the whole of the country has been devastated by the fires and rebuild confidence in Australia as a great destination.

“Building on the well known and loved campaign theme of ‘There’s nothing like Australia’, this campaign will be able to leverage the ideals of Australia that are already well known and loved across the world.

“ATEC is very glad to see this campaign kick off what will be an ongoing engagement program that will help rebuild visitation over the medium to long term and help get our export tourism industry back on track.” 

www.tourismdrivesgrowth.com.au

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SPEAKING at the 2020 Victorian Farmers Federation Grains Conference in Moama last week, the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell urged small businesses in the grain industry to take steps to future-proof their operations.

“Small businesses have been hit hard over the past 15 years with a spate of insolvencies across larger grain buying businesses leaving millions owed to growers,” Ms Carnell said.

“These Australian grain traders’ insolvencies have cost small business growers more than $50 million since the year 2000.

“It’s important that small businesses in the grains industry do what they can to protect their businesses.

“I’d encourage these small businesses to do their due diligence on customers by making sure they pay on time, checking the business register to confirm details and doing necessary credit checks," Ms Carnell said.

“Grain growers should try to avoid being reliant on one customer to reduce their risk.

“If a customer becomes insolvent, contact the external administrator to make sure you are recorded as a creditor and attend meetings throughout the process.

“Like all small businesses, grain growers should stop supply if they haven’t been paid," Ms Carnell said.

“Insolvencies in the grain industry – particularly the impact it’s had on small businesses – is an issue that is being looked at as part of our ongoing Insolvency Practices Inquiry.”

The final Insolvency Practices Inquiry report is set to be handed down at the end of March.

www.asbfeo.gov.au

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INCREASING foreign investment in venture capital, particularly at the early and seed stages, could give industry and innovation the critical boost it needs, generating greater economic benefits to Australia including higher employment and more patents, leading fund manager, Atlas Advisors Australia, said.

Executive chairman of the top Significant Investor Visa fund manager, Atlas Advisors Australia, Guy Hedley called on the Australian Government to give priority to venture capital under the SIV program.

Mr Hedley’s comments form part of Atlas Advisors Australia’s recent submission in support of the Australian Government’s review of the Business Innovation and Investment Program.

He said while there had been significant growth in venture capital investment to $1 billion in annual commitments, investment in early stage venture capital and seed funding declined by as much as 46 percent in the past four years.

“It is estimated that investment in early stages has been about $75 million spread across 138 deals in fiscal 2019. This is down significantly from $180 million across 270 deals in 2016,” Mr Hedley said.

“This could be significantly increased by boosting the asset allocation towards early stage investments under the SIV’s complying investment framework,” he said.

Australia reported very low venture capital per capita of between $15 and $30, amounting to less than half the OECD average, four times lower than Sweden at $122, United Kingdom at $114, France and Germany at $60.

According to AusIndustry data, 40 percent of the 84 registered venture capital funds didn’t make a single investment in fiscal 2019 and only 14 percent made 10 or more investments.

It was important to consider that the economic benefits, including employment and patents, were driven much higher by allocating to venture capital than to secondary public market equities, Mr Hedley said. 

The venture capital or private equity fund component of the complying investment framework should be skewed more to Early Stage Venture Capital Limited Partnership (ESVCLP) funds and less towards lower risk Venture Capital Limited Partnership (VCLP) investments.

“Even with a strong proportion of new SIV approvals, we are unable to meet the growing demand for seed and early stage venture capital,” Mr Hedley said.

“Where an investor elects to allocate 50 percent of the investment framework into venture capital and growth private equity funds, there should be a reduced visa period of three years or a prioritization of the application for processing.”

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