ANZ CEO says high taxes prevent Australia from being top Asian financial hub

ANZ Group chief executive Nuno Matos said on Tuesday that Australia had some of the ingredients needed to become a regional financial hub, but its unfavourable tax regime was holding it back.

Matos said Australia had developing capital markets and a big pool of domestic savings through its compulsory pension system, two conditions that were important to becoming a top hub.

But Australia lacked a tax regime capable of attracting foreign capital, unlike other financial centres in the Asia-Pacific region, he said.

“You also need to have very favourable taxation (to be a financial hub). And in that case, Australia does not have it,” the Portuguese-born former HSBC executive told a conference in Sydney.

He said capital was not attracted to high-tax environments.

“Hong Kong and Singapore, they are basically 0% tax on capital,” Matos said.

Australia should not “expect to be a financial hub if you don’t attract capital, financial capital”, he said, adding that “capital taxation needs to be different”.

In June, Australia’s parliament passed legislation scrapping the 50% capital gains tax discount on assets held for more than a year from July 1, 2027, returning to the pre-1999 policy of taxing inflation-indexed gains, with a 30% minimum tax on net capital gains.

Australia’s parliament also passed legislation last week broadening the types of assets on which foreign residents are subject to capital gains tax.