Room for improvement in consultation process

Key Points

• The Institute’s pre-Budget submission states that a boost to Treasury’s resourcing capabilities is key to developing adequate reforms
• The submission links more effective policy consultation with an improved economic outlook
• The paper also points to proposed changes in the transfer pricing regime, as well as assessing national tax reform, and tax deductions for personal super contributions.

With the federal Budget just over three months away, the Institute is advocating for an increase in resourcing to the Department of Treasury’s Revenue Group.

Our pre-Budget submission states that in order to improve the development and implementation of tax and superannuation policy reforms, the federal government should steer away from reducing expenditure within the department.

'Over the last few months, a number of examples have come to light of particular legislative reforms that have not adhered to best practice consultation guidelines and that providing additional funding for Treasury’s Revenue Group could minimise the likelihood of significant tax policy failures occurring again in the future,' the submission outlines.

The Institute’s Tax Counsel, Yasser El-Ansary, says the government needs to be sufficiently equipped to deal with the challenges of a rapidly moving economy.

'We need to ensure there’s flexibility and room to maneuver, particularly given the commitment to return to surplus in 2012/13. If the economic volatility continues, then the smart thing to do is pull back on that commitment.

'Treasury will need to be vigilant in ensuring that sound policy positions embedded within our tax and super systems are not disturbed by virtue of the government’s political strategy,' Mr El-Ansary says.

Specific tax issues explored within the Institute’s submission include recent announcements about reforms to the transfer pricing regime, the pace of change in the not-for-profit sector, the need for a long-term natural disaster relief fund, and the timetable for the modernisation of the taxation of trust income rules.

Within superannuation, the submission raises issues including the 10 per cent rule on the deductibility of personal superannuation contributions, salary sacrificing and superannuation guarantee contributions, concessional superannuation contribution caps, and the $450 per month threshold for superannuation guarantee contributions.

Article last updated 9 May 2012