By
Christine St Anne & Alice Uribe Wed 12 May 2010
Leading financial services veterans will join a government taskforce after the government announced further budget measures to cement Australia's status as a pre-eminent financial services hub.
Former FPA chief Jo-Anne Bloch and AMP chief executive Craig Dunn will be part of the government's new taskforce promoting Australia as a financial services hub.
The announcement was part of the government's budget measures aimed at promoting Australia as a leading financial services hub.
The taskforce will include Paul Binsted (Lazard), Jo Anne Bloch (former FPA chief now with Mercer), Alf Capito (Ernst & Young), Phil Chronican (ANZ), Jeremy Duffield (Vanguard), Craig Dunn (AMP), Shane Finemore (ex UBS) and Paul Schroder (AustralianSuper).
The taskforce will be chaired by former Macquarie chair Mark Johnson.
The taskforce will focus on the areas of regional engagement in promoting Australia's presence in Asia, engagement with local industry and facilitating industry input on some of the key recommendations of the Johnson report.
The federal treasurer Wayne Swan announced a phase-down in interest withholding tax (IWT).
For local subsidiaries of overseas parents, the IWT rate will be reduced on such borrowings from 10 per cent to 7.5 per cent in 2013/14 and to 5 per cent in 2014/15, the government said.
The government said it is favourably disposed to reducing this rate to zero, subject to its medium-term fiscal objectives.
Additionally, the IWT rate applying to borrowings by any bank branch from its overseas head office will be reduced from 5 per cent to 2.5 per cent in 2013/14 and to zero in 2014/15.
There will also be arrangements to promote cross-border marketing of managed funds, which will be developed following consultation with government. The Investment and Financial Services Association (IFSA) welcomed the government's plans to advance Australia's ability to be a global investment hub.
"The government has adopted the recommendations of the Johnson report on Australia as a global financial centre and will implement many of them in the budget," IFSA chief executive John Brogden said.
"The announcement to reduce interest withholding tax, introduce a new managed investment trust regime and establish a Centre for International Finance and Regulation all advance Australia's standing internationally."
He said these measures will make Australia more attractive for international investment and attract a greater share of global capital.
Infrastructure also took centre stage, with the creation of a new infrastructure fund into which the private sector can invest.
"We asked Infrastructure Australia to develop a national infrastructure pipeline that helps give major investors, like super funds, the certainty they need to commit resources to infrastructure investment," Swan said.
While IFSA remained positive about the potential for a return to surplus in 2012/13, Brodgen was concerned about potential inflation.
"While strong growth projections were welcome, the potential inflationary pressure that could result may have an impact on interest rates in the short term," Brogden said.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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