Hon Dr Michael Cullen
Minister of Finance
Hon Peter Dunne
Minister of Revenue
17 July 2008 Media Statement
Australia, NZ agree to progress work on mutual recognition of imputation and franking credits
The Australian and New Zealand governments are open to the idea of moving toward mutual recognition of imputation and
franking credits between firms that invest in each other’s country, Australian Treasurer Wayne Swan and New Zealand
Finance Minister Michael Cullen said today.
Dr Cullen said the lack of mutual recognition was a difficult policy issue, but was of significant concern to the
business community.
"Under current arrangements investors on both sides of the Tasman are being
double-taxed," Dr Cullen said. "And investment flows between us are distorted in a way which doesn’t sit well with wider
moves towards a Single Economic Market.
"I am pleased that the Treasurer has expressed openness to investigating this issue and to explore possible solutions.
It is clear that any solution must be a win-win for both economies."
The first step in the process is to determine whether it is practical and feasible to introduce mutual recognition. And
if it is practical, then the second issue is to determine the potential costs and benefits to each economy, the
Ministers said.
Hon Swan invited the New Zealand Treasury to make a formal submission on mutual recognition to the Australia’s Future
Tax System review which was recently established by the Federal Labor Government and is anticipated to issue its final
report by the end of 2009.
New Zealand Revenue Minister, Hon Peter Dunne, who attended the session of the bilateral talks on taxation issues, said
that he welcomes the fact that mutual recognition is now formally on the agenda for both countries given its importance
to the trans-Tasman business community.
ENDS