November
Your Future, Your Super
The Council has been actively engaged in the various phases of consultation
of the Your Future, Your Super reforms because of the implications that
these changes will have on the way superannuation funds develop and
implement their investment strategies will have a significant bearing on
the flow of private capital into Australian businesses over the long-term.
The Council welcomed the new regulations promulgated on 11 November 2021
and reflect the significant attention and discussions that the Council has
had with Government on this important issue for the industry.
In December 2021 the Board had the opportunity to hear from and have an
open discussion with Minister for Superannuation, the Hon. Senator Jane
Hume. The meeting allowed the Minister to hear from Board members on how
the RG97 framework provides challenges for superannuation funds. The
Minister articulated the Government’s perspective on the policies
underpinning its superannuation reforms.
January
Pre-Budget Submission 2022-23
As one of the flagship submissions for the Australian Investment Council, a
comprehensive Pre-Budget
submission was lodged with the Treasury for the 2022-23 federal budget. The submission
focused on key policy areas where Government action can assist the industry
to continue to support investment into high-growth potential Australian
businesses. These areas, explored in detail in the submission included:
1) Addressing skills shortages;
2) Supporting innovation; and
3) Maintaining a steady flow of investment capital.
Relief for Foreign Financial Service Providers
The Council was supportive of the exposure draft legislation in providing a
framework for foreign financial services providers to promote diversified
investment opportunities for Australian Investors and to continue to
encourage of flow of inbound capital. The Council made a
submission
to the Treasury on Exposure Draft Legislation: Relief for Foreign Financial
Services Providers.
February
Employee Share Schemes
Employee Share Schemes (ESS) are an important component of staff
incentivisation in companies within the innovation ecosystem who are often
faced with limited resources during their early stages of growth, despite
the potential to grow into large and sustainable businesses. While reforms
in this area over recent years have significantly improved the ESS regime,
the Council believes there are still opportunities to further enhance how
these schemes operate and how companies are able to remunerate their staff.
We recognise there is further work to be done to align Australia with
comparable jurisdictions as outlined in the Standing Committee on Tax and
Revenue’s report −
Owning a Share of Your Work: Tax Treatment of Employee Share Schemes
− tabled in the Parliament on Monday, 23 August 2021.
The Council made a further
submission
to the Treasury on changes the regulatory and tax arrangements for ESS.
Treasury invited the Council and its advisors for further discussions to
understand the Council’s concerns around the nature of the proposed
disclosure, the penalty regime (including 5 years’ jail time) and the
proposed “cap” for employee ownership.
Corporate Collective Investment Vehicles – Regulatory and Tax
Frameworks
The Corporate Collective Investment Vehicle legislation was passed through
the Parliament in the February Sittings. Now that this legislation has
passed, the Council will continue to advocate for a globally competitive
Limited Partnership Collective Investment Vehicle and for the Government to
prioritise its introduction. The Council will be working with government
stakeholders to progress this investment vehicle as a policy priority.
Prudential Standard SPS 530 – Investment Governance in
Superannuation
The Council has made a
submission
to APRA on Prudential Standard SPS 530. This consultation includes a number
of enhancements to SPS 530 which relate to valuation practices, stress
testing and liquidity management practices for superannuation and called on
APRA to consider IPEV’s past and ongoing work in this regard.
Draft R&D Tax Incentive Determination on clinical trials (Phase
0-III)
The Council has made a
submission
to the Department of Industry, Science, Energy and Resources on a Draft
R&D Tax Incentive Determination on clinical trials (Phase 0-III) for an
unapproved therapeutic good
Changes to the R&D tax incentive were announced in the 2020-21 Federal
Budget that would effectively give the Board of Industry Innovation and
Science Australia the ability to provide determinations in order to
engender greater clarity and certainty on eligible R&D activities for
specific circumstances over and above existing guidance material.
The Council has been invited to attend the R&D Industry Roundtable and
will be closely monitoring developments in this area.
Other Policy & Advocacy Initiatives
Division 6C
The Council has continued to progress discussions with the ATO regarding
Division 6C – Negative Control. Following an industry roundtable on 26 May,
the Council followed up with a letter to the ATO reaffirming the Council’s
position with respect to Division 6C of the Income Tax Assessment Act 1936
as outlined in the ATO Guidance in July 2021. The ATO has indicated that
the process of finalising this matter is taking some time and has strongly
heard the Council’s views and will discuss any final draft with the Council
prior to its finalisation.