THE House of Representatives Standing Committee on Economics today tabled the report of its Review of the Reserve Bank of Australia Annual Report 2018 (First Report).

The report provides a summary of issues raised at the public hearing with the Reserve Bank in Sydney on February 22, 2019.

Chair of the committee, Tim Wilson MP, said, "The central scenario remains positive with the RBA expecting Australia’s economy to continue to grow above trend, reaching around 3 per cent by the end of the year. This is supported by rising business investment and higher levels of spending on public infrastructure.

"Inflation continues to remain low and stable with CPI inflation at 1.8 percent over 2018 and underlying inflation at 1¾ per cent. Interest rates continue to remain unchanged at 1.50 percent," Mr Wilson said.

"Outcomes in Australia’s labour market have been better than forecast with the unemployment rate already at 5 percent and expected to move lower to 4¾ per cent over the next couple of years. Wage growth continues to pick up with wages growing faster in almost all industries and states than a year ago.

"Despite the recent housing market adjustment and the protracted period of low household income growth, the Australian economy and financial system continue to remain resilient," Mr Wilson said.

The report is available here.

For further information about the inquiry, visit the committee’s webpage at: www.aph.gov.au/economics

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THE Tax Practitioners Board (TPB) has welcomed the release of a report by the Inspector-General of Taxation and Taxation Ombudsman (IGTO) on the role of the tax profession into the future. 

Released yesterday, the IGTO report, Future of the Tax Profession, examines a range of current and future factors likely to reshape the tax profession and administration of the tax system, such as advances in technology. 

It recognises the significant continuing role of tax practitioners and the importance of considering future changes on their ability to service taxpayers. 

The report suggests potential expansion of the role of the TPB to keep pace with developments in the tax profession and workforce more generally. This is being explored in the recently announced independent review into the TPB and Tax Agent Services Act 2009, chaired by Keith James.

Chair of the TPB, Ian Klug AM, said the IGTO has made six recommendations for the TPB in the report and implementation has commenced.

"The report recommendations correspond with the focus the TPB has been applying to tackling the issue of unregistered providers of tax agent services," Mr Klug said.

"It also recognises the continuing need to work with stakeholders such as professional associations to ensure policy and guidance appropriately caters for all tax practitioners."

The report and the TPB responses are available on the IGTO website.


About the Tax Practitioners Board:
The Tax Practitioners Board regulates tax practitioners in order to protect consumers. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct.

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THE House of Representatives Standing Committee on Economics today presented the report of its inquiry into impediments to business investment.

The Chair of the committee, Tim Wilson MP, said, "Given the significant contribution that business investment makes to Australia’s economy it is important to understand what factors are impeding business investment and how government can best encourage and support new business investment."

Mr Wilson said, "Australia’s stability and strong institutions help to attract business investment. However, the committee recognises that Australia cannot afford to be complacent. Governments at all levels must foster an environment in which businesses have the tools to succeed."

The committee made 12 recommendations to better support Australian businesses and reduce impediments to business investment. These include:

• reducing the company tax rate in Australia to 25 percent for all companies by 2026-27
• setting the instant asset write-off at $25,000 for SMEs on an ongoing basis
• continuing the Australian Government’s focus on improving electricity reliability and price
• reviewing the Export Market Development Grants scheme to ensure that the level of funding is sufficient to assist local small and medium-sized Australian businesses to increase their engagement in the global marketplace
• enhancing National Broadband Network customer outcomes
• continuing to streamline business engagement with government through projects such as the National Business Simplification Initiative
• considering options for streamlining small business engagement with government on workplace relations matters to foster an environment that encourages businesses to take on that first employee then more employees in order to grow their businesses
• enhancing regulatory frameworks by adopting a set of nationally consistent laws on electrical safety and bringing Australian Standards on clothing labels in line with international standards, and
• considering recommitting to the National Science and Innovation Agenda for another four years.

The report is available on the committee’s website.

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THE House of Representatives Standing Committee on Economics today presented the report of its inquiry into the implications of removing refundable franking credits.

The chair of the committee, Tim Wilson MP, said, "The committee has considered the case for removing refundable franking credits for individuals and SMSFs and is of the view the policy is inequitable and deeply flawed.

Mr Wilson said, "In particular, abolishing refundable franking credits will unfairly hit people of modest incomes who have already retired, and who are unlikely to be able to return to the workforce to make up the income they will lose.

"It will force many people, who have saved throughout their lives to be independent in retirement onto the Age Pension. This undermines any objective that it may raise revenue and reduce dependence on taxpayers resulting from an ageing population," Mr Wilson said.

In its submission to the inquiry, the Alliance for a Fairer Retirement System claims that, in 2014-15, over half of those receiving cash refunds for their franking credits had incomes below the $18,201 tax-free threshold of the time, and 96 per cent had taxable incomes of less than $87,000.

Mr Wilson said, "Some have argued that the intention to scrap refundable franking credits is designed to tax the wealthy. This is an unfair characterisation of the 900, 000 Australians who will be affected and could lose up to a third of their income.

"Australia has a tax free threshold of $18,200 for workers, yet the abolition of refundable franking credits would apply an effective 30 percent tax from the first dollar earned. This is fundamentally regressive," Mr Wilson said.

"In consideration of the evidence received during this inquiry, the committee strongly recommends against the removal of refundable franking credits," Mr Wilson said.

The committee also recommended that any policy that could reduce Australian retirees’ income by up to a third should only be considered as part of an equitable package for wholesale tax reform.

The report is available here.

A total of 1777 submissions have been published and are available on the committee’s webpage at: www.aph.gov.au/economics.

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