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Australia: 'Not For Profits' To Lose Out From Liberals' PPL Scheme

27 August 2013   (0 Comments)
Posted by: Author: Mary Swire
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Author: Mary Swire

Australia's ruling Labor party has warned that the not-for-profit sector will be one of the "big losers" if the Opposition's plans for a paid parental leave system go ahead.

The introduction of a PPL scheme is among the Opposition Coalition's headline election pledges. If it wins on September 7, mothers will be offered 26 weeks of PPL at their actual wage or the national minimum wage (whichever is greater), plus superannuation. To fund this measure, a 1.5 percent levy will be imposed on companies earning more than AUD5m (USD4.5m) in taxable income a year. The Coalition says that just 3,000 business would be affected, and that a parallel 1.5 percent reduction in the headline company tax rate will help offset costs.

The Labor election campaign has made much of the levy's potential knock-on effects, focusing on what it says is Liberal leader Tony Abbott's "refusal to provide franking credits" as part of the tax. The latest claim is that Australia's charities and universities have to pay for the "unfair and expensive" scheme.

Figures from the Australian Taxation Office show that imputation credits are a growing source of revenue for charities, universities, and medical research institutes. More than AUD800m was refunded in 2011-12, up 54 percent on the previous year.

Labor has seized on submissions to the Not-For-Profit Sector Tax Concession Group as examples of the apprehension felt about possible changes to franking arrangements. Universities Australia warned that "limiting franking credit refunds would cause significant income losses for universities and cause large economic inefficiencies," while the Australian Association of Medical Research has said that this would limit the ability to fund core research and medical equipment.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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