Delays in passing legislation to reform the offshore banking unit regime could hurt Australia and undermine the perception of foreign investors.
The Australian Financial Markets Association (AFMA) has expressed concern about a possible delay in passing legislation that would update Australia’s offshore banking unit (OBU) regime, saying a delay could hurt the reputation of the country and deter international investors.
In March, the Australian Treasury announced its intention to reform the country’s OBU regime, in order to avoid being labeled a harmful tax regime by the EU and the OECD. The amendment bill is currently stuck with an unrelated question regarding the disclosure of JobKeeper’s payment details.
AFMA says OBU reform legislation must be ‘passed without delay’ to avoid harming Australia, affect how it is viewed by foreign investors and avoid negative consequences for European investments in Australian Residential Mortgage Backed Securities.
The Australian Securitization Forum (ASF) also said the bill must be passed without delay to avoid financial sanctions or restrictions from OECD and EU countries.
According to AFMA, without the passage of the bill, Australia runs the risk of being considered a non-cooperative jurisdiction by the EU, which would have an impact on cross-border trade.
“It is vital to focus energy now on designing a viable replacement, as the uncertainty over future fiscal parameters is itself a competitive disadvantage for Australia,” AFMA said.