Australia Mulls Measures to Establish Regional Financial Hub

Source: Regulation Asia Editors, Regulation Asia 2020-07-17

Australian Senator Andrew Bragg wrote to Treasurer Josh Frydenberg suggesting reforms to capitalise on Hong Kong’s recent political changes.

Australia’s federal government is considering implementing tax and regulatory concessions to help attract capital and skilled workers to the country and make it an international financial services hub, reports the Australian Financial Review.

Senator Andrew Bragg has reportedly led the push to develop Sydney into a regional financial centre.

A former Financial Services Council policy adviser, Bragg has written to Treasurer Josh Frydenberg suggesting the government include reforms in the October federal budget to capitalise on Hong Kong’s “collapse as a credible financial centre in the region”.

“In light of recent political changes in Hong Kong, an opportunity has emerged for Australia and Sydney to become a stronger regional financial centre,” Bragg said in a 14 July letter to Frydenberg.

Bragg is said to be urging for companies to be given incentives to set up their regional headquarters in Australia, including fast-tracked licence approvals.

He is also proposing a cut in the corporate tax rate towards Asia’s 21 percent average, in order to better compete against Singapore, and for tax rules to be clarified for local fund managers managing foreign assets.

Last week, Prime Minister Scott Morrison also said the government would “look at new incentives and arrangements to attract export-oriented Hong Kong-based businesses to relocate to Australia” and headhunt entrepreneurs from the city.

Australia has also offered a pathway to permanent residency for more than 12,000 Hong Kong people in response to the implementation of a new national security law in the city.

In a statement, the Financial Services Council welcomed the financial service hub initiative, saying Australia “needs to help significant investors and skilled employees move to Australia, remove excessive taxes that penalise investors in financial services, and prioritise the development of corporate collective investment vehicles that are familiar to investors in Asia.”

Financial Services Council CEO Sally Loane pointed to a recent Morningstar study, which showed Australia imposes one of the largest tax burdens on managed funds.

“Reductions in Australian taxes and red tape would make our market much more attractive to overseas investors and improve our global standing,” she said.

Australian reform

Australia Mulls Measures to Establish Regional Financial Hub

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