The budget does not address the structural challenges for the Australian tax system in the current economic environment, with the Government leaving that to be addressed as part of its taxation white paper (Re:think) process.

Issues which are being debated include potentially broadening the scope and increasing the rate of GST, reducing the tax concessions for superannuation earnings, adjusting the imputation system to remove the bias to domestic equities and limiting the tax benefits associated with negatively geared investment properties. Each of these presents its own challenges, with the potential for winners and losers from such changes. Given the political situation in Australia, it is hard to see measures to address any of these issues being implemented before the next election in late 2016 or early 2017.  

On the international tax front, the government is continuing its discussions with the United Kingdom about mechanisms to address the diversion of profits in light of the introduction of a diverted profits tax in the UK. And the government has reiterated its strong support for the OECD proposals to address base erosion and profit shifting at an international level.  We continue to live in “interesting times” for multinationals.