The commitment comes as the push continues for Australia to export its financial services, with the ambition of becoming a regional financial hub.
Australia’s signing of the Asia Region Funds Passport earlier this year was vital to this, enabling Australian fund managers to provide financial services to the growing Asian market.
As the agreement won’t take effect until the end of 2017, the Australian government will be looking to use this time to cut regulatory measures, to ensure Australia is able to compete with countries such as Hong Kong and Singapore.
Central to this plan are the recommendations made in the Australia as a Financial Centre report, which include the removal of the withholding tax rates applied to foreign-raised funding, and overseas banks.
Financial Services Council CEO Sally Loane has welcomed the government’s announcement to resolve what she called “a significant barrier to exporting Australian financial services and products”.
“Creating a competitive and easy-to-understand withholding tax regime will set Australia up to compete in the Asia Region Funds Passport and will also position the industry to capitalise on the north Asian free trade agreements,” she said.
“Australia’s financial services sector has the potential to be the next growth engine of the Australian economy. Policy changes to increase our financial services exports are a fundamental element of ensuring Australia benefits from the growing pool of wealth in the Asian region,” she added.