FOREIGN investors using Australian financial advisers, fund managers and brokers to make offshore investments will be exempt from capital gains tax under new proposals designed to boost the under-performing financial services industry.
The recommendation is one of 19 proposals contained in a new report designed to help the sector realise its full potential and market Australia as a regional headquarters for financial services companies.
Among other ideas contained in the Australian Financial Centre Forum (AFCF) final report, released today, is a plan to attract more Islamic investors who, under traditional Sharia law, are not allowed to charge or collect interest payments.
The proposed reforms could also offer greater clarity on tax rules within the financial services sector, Financial Services Minister Chris Bowen told reporters in Sydney.
"I think there's been a case for reform and the government is looking at that reform.
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"I've said continuously that there's more to be done.
"Tax is a key issue to us as a financial hub."
The minister said Sydney and Melbourne would likely remain Australia's financial services heartlands but said other locations could muscle in.
The proposed reforms, if fully realised, could also create an unspecified number of new jobs, he said.
The Government has already adopted some of the ideas and would look to introduce the others pending budgetary priorities and further scrutiny, Mr Bowen said.
AFCF chairman and report co-author Mark Johnson admitted uncertainty over tax had caused overseas investors to shy away from using Australian financial services in the past.
"Tax uncertainty, uncertainty over the rules, is one of the reasons we've been held back," he told reporters.
"We've got a really good system but it hasn't fully blossomed."
The benefits of a fully-performing financial services sector would be felt by all Australians, Mr Johnson added.
Johnson & Johnson accused of paying drug kickbacksProposals to boost financial sector
