Former government advisor “disappointed” with tax increase

A former government adviser and investment banker, Mark Johnson, has critisised Labor’s budget measure to double the tax on foreigners investing in Australian managed investments.

Under plans in the budget the tax will rise to 15%.

Mark Johnson, who was central to the Government’s push to become a major financial services player in the Asia-Pacific region, says the budget decision to double the withholding tax for foreigners investing in managed investment trusts is “disappointing”, according to a report by the Australian Financial Review.

“My initial reaction is one of disappointment because it does seem to be an unwelcome signal to overseas investors,” Johnson said, according to the AFR.

Johnson said he will be asking Treasury for an explanation for its decision.

The Government said Australia’s withholding tax rates remained internationally competitive.