The Henry Report

In December 2009, Australia's Future Tax System Review Panel delivered its final report to the Government. This report is more commonly known as the Henry Review after the Secretary to the Treasury, Dr Ken Henry, who chairs the Review Panel.

The Government has said it will consider the Review and release it in early 2010, along with an initial response. At this point in April 2010, there is yet to be any official announcement regarding how the Review will affect our financial future.

The Review took a 'root and branch' approach and examined Australian and State government taxes, and interactions with the transfer system in order to make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges that lie ahead.

Since being established in 2008, the Panel provided many opportunities for people to make a submission and engaged with the community through public meetings and focus groups, meetings with representative business and community groups, discussions with other government departments and agencies, and through its tax-transfer policy conference held in June 2009.

Around 1,500 formal submissions were received, canvassing a wide-range of issues of concern to the community – which helped the Panel shape its recommendations.

In addition, a two-day conference in June 2009 provided an opportunity for leading international experts and a range of academics and stakeholders to debate leading edge tax and transfer policy issues.

Given the time this report has been underway (since May 2008) and the broad scope of its findings, there have reports of the Henry Review being leaked to the media with comments around various issues including the abolition of compulsory tax returns for individuals, cut in the rate of income tax to aging Australians and to mothers considering re-entering the workforce, 50 per cent concessional rate applying to capital gains and more.

What is more, given the degree to which it cuts across everything from Commonwealth/State relations to levels of withholding tax and the future of the superannuation guarantee, the Government’s continuing delays are simply serving to create unnecessary uncertainty.

According to the timeline for the Henry Review http://taxreview.treasury.gov.au/content/Content.aspx?doc=html/timeline.htm , the Secretary to the Treasury, Ken Henry, delivered his panel’s findings to the Government in December. It was always envisaged that the Government would then make the report public “early 2010”.

It is now clear that the Government will utilise at least some of the Henry Review recommendations in framing the May Federal Budget – in the meantime Baker Affleck’s team of tax specialists will keep their “ears to the ground” and their fingers on their calculators ready to keep you informed.

For more information relating to your specific circumstances please contact your Baker Affleck accountant on (07) 5538 3088 or click here to send an email request.