Changes proposed in the Budget to the taxation of managed investment trusts will be considered in a separate Bill to be introduced in the Parliament in coming days, said Assistant Treasurer David Bradbury.
The Gillard Government has made sure that the 15 per cent withholding tax for managed investment trusts proposed in the 2012-13 Budget change brings us into line with or better than the US, Canada, Hong Kong and the UK and is still half the rate it was when we came to office in 2007.
"Under the former Howard Government the rate of withholding tax for managed investment trusts was 30 per cent - double the rate proposed in the Budget," said Mr Bradbury.
"It took a Labor Government to slash the Coalition's high rate of taxation to help encourage investment.
"The Coalition is spreading lies about the Government's proposed changes in the Budget to divert attention from the fact that the tax rate was double under the Howard Government in which Tony Abbott and Joe Hockey were senior Ministers."
In 2007, when Labor first proposed cutting the rate in half, from 30 per cent to 15 per cent, then-Treasurer Peter Costello called it ‘a tax cut for foreigners':
"Apparently [Labor] would rather give tax relief to foreigners than to Australians and I think that is a misguided priority."
(Doorstop, 10 May 2007)
When the reduction in the withholding tax rate was brought to the Parliament, a string of Coalition MPs and Senators spoke against the measure, saying it was unnecessary.
"I do not see a reason for going below 15 per cent."
(Andrew Laming MP, House of Representatives, 18 June 2008)"The question is: do we need to go over the top in giving tax breaks to foreign investors? I say we do not. "
(Judi Moylan MP, House of Representatives, 18 June 2008)"It does not appear that this rate [30 per cent] of withholding tax was necessarily a barrier for investment."
(Michael Keenan MP, House of Representatives, 18 June 2008)
"The Coalition's weasel words on this issue just demonstrate its shameful record when it comes to reforming the withholding tax rate and encouraging investment in Australia."