Australian Government To Lighten Regulatory Burden On Business

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

16 August 2006

Australian Treasurer Peter Costello has announced that the government has accepted many of the recommendations made by the Taskforce on Reducing the Regulatory Burden on Business.

The Taskforce put forward 178 recommendations on actions to reduce red tape, of which Costello has accepted 158, and the government has committed itself to concrete action in specific areas.

Included in the government's plan of action will be: tougher rules for making new regulation, including cost benefit analysis; screening of all regulation at least every five years; work to harmonise State and Territory conveyancing laws; a review of the thresholds for the definition of a large proprietary company; a simplified accounting method to be developed for small restaurants, cafes and caterers; commencement of work on the national streamlining of business names; alignment between the definitions of small business, employer and associate; and aligning training and licensing and mutual recognition of occupational licensing.

The government's final response to the report’s recommendations also includes measures announced in its interim response in April 2006, including: an increase in the minor fringe benefits exemption threshold from A$100 to A$300, effective from 1 April 2007; an increase in the fringe benefits reporting exclusion threshold from A$1000 to A$2000, effective from 1 April 2007; a halving of the incorporation fee from A$800 to A$400, at an estimated cost of A$216.4 million over the budget forward estimates period with effect from 1 July 2006; and allowing companies to make annual reports available on the internet and to send hard copies on request.

The Taskforce was launched by the government in October 2005 to identify practical options for alleviating the compliance burden on the business community from Commonwealth Government regulation. It is chaired by Gary Banks, Chairman of the Productivity Commission, and also includes Dick Humphry, the former Managing Director of the Australian Stock Exchange, Rod Halstead, a corporate law expert with Clayton Utz, and Angela MacRae, a consultant to small business and Chairman of the Independent Contractors Association of Australia.

In response to the Taskforce's report, the government has also announced a comprehensive plan to simplify and streamline the tax rules for superannuation, including greater flexibility with regard to how superannuation savings can be drawn down in retirement.

According to Costello, this will "drastically reduce" the complexity of tax arrangements that currently apply to Australians’ superannuation benefits. Small business tax relief arrangements have also been significantly simplified.

The report also made a number of recommendations relating to corporate and financial services regulation, and Parliamentary Secretary, Chris Pearce, has announced a comprehensive package of corporate law reform proposals. These reforms will be dealt with principally through the Simpler Regulatory System Bill.

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