Tuesday, 13 May 2008 
 
 
The Institute of Chartered Accountants in Australia (the Institute) welcomes the Government’s 2008-09 Federal Budget, which has delivered on election promises, made in the areas of both personal and business tax. 
 
Tax Counsel for the Institute, Ali Noroozi, said: “The Government has delivered on its promised personal tax cuts and increased the Low Income Tax Offset, which should provide additional encouragement to participate in the workforce. It is also pleasing to see that the Government remains committed to its aspirational goal of reducing the number of tax scale to three (15 per cent, 30 per cent and 40 per cent respectively) over the next six years.” 
 
"The introduction of means testing, in relation to a number of benefits and concessions, may be justified on equity grounds. However, such tests have administrative costs and may also result in disincentives to workforce participation as income increases and benefits decline", he said. 
 
The Government has also delivered on its election commitments on business tax. The Institute particularly welcomes the measures aimed at reforming the taxation regime affecting property trusts. This had been strongly recommended by the Institute. 
 
Tax Counsel for the Institute, Ali Noroozi, said: "As urged by the Institute, the Labor Government’s first budget has also provided clarity with respect to measures put in train by the previous government."  
 
These measures affect small and big business alike. At the small end, for example, there is improved access to the small business CGT concessions via the small business entity test.  
 
At the big end of town, examples include the commitment to implement stages 3 and 4 of taxation of financial arrangements and alleviating the disruption caused to the Australian capital markets, by the previously announced changes to the consolidation rules following certain CGT roll-overs. 
 
"The priority should now be to expedite the implementation of these measures and remove any remaining uncertainty as soon as possible"’, said Mr Noroozi. 
 
There are also some disappointments in the Budget, such as the reversal of the changes to the family trust election rules and allowing the ATO to charge for valuations required in course of issuing private rulings. 
 
Mr. Noroozi also said: "The Institute supports the Government’s announced tax review, and welcomes the quick action taken following the 2020 summit, in particular, the release of a discussion paper by July 2008. The terms of reference of the review also seem to be appropriate and address a number of issues raised by the Institute, such as tax treatment of the proposed emission trading system. However, the review would benefit from the tax profession being represented on the panel, as well as a stronger business presence." 
 
"Overall the budget is a tough one but delivers on promises and provides more certainty on a number of fronts as well as establishing a comprehensive review of our tax system. We look forward to continue working with the Government to achieve optimal outcomes as soon as practicable," Mr. Noroozi said. 
 
Ends 
 
Media enquiries please contact: 
Jasmine Hogg 
Institute of Chartered Accountants in Australia 
Ph: 0414 202 206 
 
Ali Noroozi 
Institute of Chartered Accountants in Australia 
Ph: 0040 080 832 
 
Notes to editors 
The Institute of Chartered Accountants in Australia (the Institute) is the professional body representing Chartered Accountants in Australia. The Institute is a founding member of the Global Accounting Alliance (GAA), an international accounting coalition formed by the world's premier accounting bodies.  
 
The GAA has a membership of 700,000, and promotes quality professional services, shares information and collaborates on international accounting issues. In Australia, the Institute's reach extends to more than 62,000 of today and tomorrow’s business leaders, representing some 47,000 Chartered Accountants and 15,000 of Australia's best graduates who are currently enrolled in our world-class post graduate Chartered Accountants Program.  
 
Chartered Accountants are highly trained business advisers who offer a wide range of services including business management, financial planning, tax, auditing, forensic accounting and other areas. Through a combination of precise, insightful and ethical thinking, Chartered Accountants are without equal in powering the right business decisions and serving as a financial conscience within the business community.  
 
The Institute was constituted by Royal Charter in 1928 and is focused on leadership, protecting the standards and reputation of the accounting profession and influencing the policies and regulations that affect the industry.