Australian Government To Encourage PPPs with Tax Reforms

by Mary Swire, Tax-News.com, Hong Kong

12 November 2003

Speaking to the inaugural Asian summit on Public/Private Partnerships (PPP), Australian Federal Treasury official Peter Mullins announced that the government intends to reform taxation law to ensure tax breaks gp to those who shoulder the economic risk of a PPP projects.

Mr Mullins told delegates that the existing legal framework was drafted two decades ago and has not kept pace with the current business environment, which has moved on considerably in that time. Therefore, the government is now taking submissions on new legislation announced in July, and will make a decision on which new proposals to adopt in the near future. Included in the measures will be five ‘tests’ that will attempt to establish who is the economic owner of a PPP project, Mr Mullins explained.

The reforms are also aimed at achieving lower compliance costs and more certainty in the PPP sector, the conference was informed.

Meanwhile, Steve Bracks, the premier of the state of Victoria, which has led the way in PPP investments in recent years, suggested that a national council is needed to promote the market in PPPs and establish standard procedures and practices. This would have the added benefit of encouraging greater international investment in Australian Public/Private Partnership projects, he argued.

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