Date
Recommendation 1:
The Working Group recommends that:
- the Government note the savings options identified in this report; and
- further analysis and consultation be undertaken before taking a decision to implement them.
Recommendation 2:
The Working Group considers that loss carry back would be a worthwhile reform in the near term and could be implemented consistent with a model that:
- is limited to companies;
- provides a two-year loss carry back period on an ongoing basis;
- limits the amount of losses that can be carried back by applying a cap of not less than $1 million;
- limits the amount of refunds to a company’s franking account balance; and
- is phased in from 2013-14 with an initial one year carry back period.
Recommendation 3:
The Working Group recommends that the Government, as a matter of priority, undertake further analysis with a view to developing a model for reforming the same business test. One model for improving the existing loss integrity rules could involve a combination of:
- modifying the existing SBT so that it better aligns with the modern business environment; and
- introducing an alternative statutory drip-feed mechanism calculated on a straight line basis.