Media Release

Boost to resourcing needed for better policy design

The federal government needs to use the forthcoming budget to increase the resourcing of departments responsible for designing and implementing key policy and legislative reforms, according to the Institute of Chartered Accountants in Australia (the Institute).

In its 2012-13 pre-budget submission, the Institute argues against planned cutbacks in expenditure within Treasury’s Revenue Group, in particular, with any reduction in resourcing capability expected to jeopardise the timely development of new policies in the tax and superannuation areas.

“Over the last few months, a number of examples have emerged where particular legislative reforms have not adhered to best practice consultation guidelines, and as a consequence taxpayers have been asked to foot the bill for policy failures. Providing additional funding for Treasury’s Revenue Group is likely to minimise the likelihood of significant tax policy failures occurring again in the future,” the submission reads.

According to the Institute’s tax counsel, Yasser El-Ansary, a boost to resourcing investment will also allow the government to manage the challenges of a rapidly evolving economic climate.

“Treasury will need to be vigilant in ensuring that sound policy positions embedded within our tax and superannuation systems are not disturbed by virtue of the government’s political strategy of returning the budget to surplus in 2012/13,” he says.

The Institute’s submission explores a number of specific tax policy issues including 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.

The submission also raises superannuation issues including the integrity of the superannuation guarantee (SG) rules in light of the proposed increase in the SG from 9 per cent to 12 per cent, as well as the deductibility of personal superannuation contributions, contribution caps and removal of the excess contributions tax.

Article last Updated 30 January 2012