Business Newsroom

La Trobe Business School

Tag: Mark Morris

Our industry connections make you career ready

What you do at university is important to us.

However, it’s what you do after university that interests us the most. We know that studying is a significant investment, so we’re committed to making sure you graduate ready for work.

With the employment landscape evolving constantly, the best way to make sure we’re teaching the right skills is to go straight to the source. That’s why we work closely with industry to find out what they want in graduates – both right now and in the future.

Developing the degrees industry needs

We’re constantly reinvigorating our courses to prepare you for roles in emerging fields of employment. We work directly with industry to identify skill gaps and develop degrees to address them.

For example, our industry partner Cisco has identified that there are currently a million cybersecurity jobs opening globally, with demand projected to rise in the coming years.

In response to this demand, we’ve developed our new suite of cybersecurity degrees with input from Cisco, Optus, Australia Post, Australian Signals Directorate (ASD), Cisco, Hewlett Packard Enterprise, Symantec, Atlassian and Cloudera.

Simone Bachmann, Head of Information, Security, Innovation and Culture and Australia Post, says, ‘we need people with problem solving skills, we need innovators, we need people with legal and regulatory skills, we need communicators and educators to help people understand the problem.’ These degrees address the growing need for cybersecurity professionals with interdisciplinary skills.

Our Master of Sport Analytics (developed with leading sports clubs and technology companies), Master of Business Analytics (with 20 per cent of the curriculum taught by industry experts) and Master of Data Science (addressing a data analytics skills shortage) are other examples of our industry relationships preparing students for the future of work.

Future-facing industry partnerships

We’ve established relationships with major organisations to make sure we stay at the forefront of industry developments.

Our partnership with Optus, which focuses on cybersecurity, will result in scholarships and Work Integrated Learning (WIL) opportunities for our students, as well as employment pathways for graduates.

We work closely with a number of sporting clubs, including Melbourne City Football Club, Carlton Football Club, AFL Player’s Association, Bendigo Spirit and IPL Kings XI Punjab to give our students access to work placements as well as research and internship opportunities.

We’re also the only university to offer an accredited art subject at the National Gallery of Victoria (NGV). As learning partner for the NGV’s summer exhibition, we’ve offered the subject Summer at the NGV for the past four years – in 2017, students were able to study the work of British icon David Hockney.

Preparing you for success with industry insights

Technology is advancing at an incredible rate, which means that many of today’s roles won’t even exist in the future.

It’s our job to prepare you for the roles of the future. We do this by helping you develop the flexibility and transferable skills you need to adapt to the changing market.

We’ve spoken to a number of employers, including PwC, Commonwealth Bank, Alfred Health, Thoughtworks, Pfizer, CSIRO, Melbourne Football Club, Telstra, Bureau of Meteorology, Deloitte, Certified Practicing Accountants and more to identify the core skills and attributes that employers value most highly.

We’ve used these insights to develop Career Ready, a program that supports you to build the attributes employers want. The program includes an app, a dedicated support team, an on-campus recruitment agency, and a range of activities you can participate in to build your skills.

First-hand industry experience

We’re also making sure our students come into contact with industry while they’re still studying.

With our Professors of Practice program, we’re championing a shift in how industry can contribute to education. Our Professors of Practice are industry professionals employed by the university to advise on curriculum, and, in some cases, teach.

Mark Morris, a Professor of Practice in the Department of Accounting, says, ‘I try to provide insights as to what they will find in the workplace wherever I can, because this is exactly the kind of knowledge that can give them an edge to stand out from the crowd.’

Work Integrated Learning (WIL) opportunities place students in organisations, giving them the opportunity to apply their theoretical knowledge in a real industry environment. After graduation, many of our students are employed by their WIL employer.

This post was originally published on the NEST blog.

POP Mark Morris interviews Leigh Conlan: Career change is the only constant (or Doors a Latrobe Economic Degree can Unlock)

In this two-part blog entry, Professor of Practice Mark Morris discusses what innovation means in accounting, as well as what a career in accounting entails today, together with Leigh Conlan from Specialist Accounting Services. Leigh is also a La Trobe Business School graduate graduating in 1982 with a Bachelor in Economics.

Mark Morris: II understand that you are an alumni of La Trobe University

Leigh Conlan: Yes Mark, I studied economics and graduated in 1982 from La Trobe University. Following the completion of my degree with La Trobe, I was able to branch out into a variety of roles in both the public and private sectors.

Mark Morris: It seems these days that university graduates these days don’t have a job for life. Can you share with me your experience in relation to changes in your career?

Leigh Conlan: Absolutely. I have been fortunate to work for a number of organisations in a variety of capacities including accounting, economics, tax advisory, legislative analysis, and R&D consulting. I started out as a tax investigator with the ATO which was interesting work for a graduate as it allowed me to get a great perspective on private enterprise and in particular smaller organisations where accounting and the law intersect. Following this role, I transitioned to the ACCC which was then the Trade Practices Commission where I was heavily involved in litigation and policy objectives. What I found interesting in this role was, more specifically, price fixing collusion and conspiracy activities and investigations.

Mark Morris: So you were a corporate cop Leigh?

Leigh Conlan: Yes, essentially.

Mark Morris: And then you came over to private enterprise?

Leigh Conlan: That’s right, I came over to the dark side and started consulting in private enterprise. I worked for a number of big firms and was a partner of one of the larger accounting firms in Australia before I started my own practice.

Mark Morris: And what has your experience been like in respect of changes in roles?

Leigh Conlan: What I have found is that there is nothing wrong with a change of career and that change should always be embraced. In these modern times it is not only organisations that need to be agile and adaptive but this also applies to employees and individuals. To a certain extent change and being adaptive is a part of Australia’s history. Automation, fast changing technological and geopolitical changes will dictate market behaviour and employment opportunities.

Mark Morris: So how do you keep abreast of new developments in government policy and public-private collaboration?

Leigh Conlan: Well I am a member of the National Reference Group which is a peak body of private practitioners, the ATO and AusIndustry. I represent the CPA’s on that group which me enables to interface between public policy developments and issues from industry. I am also a member of the State Reference Group which provides further practical application.

Mark Morris: I gather that your ability to adapt and change led you to starting your accounting practice?

Leigh Conlan: Correct, I started Specialist Accounting Services a number of years back with a focus on providing high quality services in the fields of indirect tax and R&D advice.

Mark Morris: Can you tell me a little more about Specialist Accounting Services and how you differentiate yourselves against other service providers in this space?

Leigh Conlan: Sure. We differentiate ourselves by being an organisation which has the expertise across a range of industries relating to R&D. Specialist Accounting Services also employs a range of specialised technical consultants from the engineering and bio medical fields to leverage expertise in accordance with clients in these respective fields. This enables a better understanding of our clients’ needs and enables a smooth process through the R&D tax application process. This also empowers us to have a nurturing a close and positive working relationship with our clients. We also carry out services in respect of litigation support and competition policy assistance. Lastly, we provide a high quality service enabling our clients to receive a beneficial tax outcomes in accordance with the government legislation and the AusIndustry framework.

Mark Morris: Well, thank you for your time today Leigh. It has been a pleasure talking with you

Leigh Conlan: It was my pleasure. Thanks Mark.

POP Mark Morris interviews Leigh Conlan: Supercharging R&D and collaboration

Professor of Practice Mark Morris (left) and Leigh Conlan (right)

In this two-part blog entry, Professor of Practice Mark Morris discusses what innovation means in accounting, as well as what a career in accounting entails today, together with Leigh Conlan from Specialist Accounting Services. Leigh is also a La Trobe Business School graduate graduating in 1982 with a Bachelor in Economics.

Mark Morris: I am pleased to introduce Leigh Conlan of Specialist Accounting Services to discuss the recent government innovation statement and incentives that the government has introduced for both private and research organisations in respect of R&D. Leigh, Good morning.

Leigh Conlan: Good Morning Mark.

Mark Morris: Now Leigh, I understand you run a consultancy practice in the R&D space and you advise a broad range of clients.

Leigh Conlan: That’s correct Mark, we run a specialist practice service and in fact, operate under a company name Specialist Account Services Pty Ltd.

Mark Morris: That’s great Leigh. Tell me about some of your clients.

Leigh Conlan: Well we advise a range of clients from small medium enterprises through to large corporations and government departments. We offer a professional assistance to all businesses and research providers in the matters of R&D tax incentives and government grants

Mark Morris: That’s a good segue into my next topic which is around the innovation statement released by the government. What do you think the government’s approach is in this regard Leigh?

Leigh Conlan: As you know Mark, the innovation statement is built on four key pillars but it is important to keep in mind Mark that this is the first time that there has been a comprehensive tying together of all of the research and development governmental policy objectives.

Mark Morris: So can you provide some further insight into the four pillars that the government has outlined in the innovation statement

Leigh Conlan: Well briefly speaking these four pillars as outlined in the National Innovation and Science Agenda statement being ‘Culture and capital’, ‘Collaboration’, ‘Talent and skills’, ‘Government as an exemplar’. Within these pillars are specific areas that the government is targeting. For example the government has set up a $20Billion Medical Research Fund to increase funding in the areas of medical research and innovation. Another example, which may relate to La Trobe, is the government R&D funding of $2.8Billion to universities and the higher education sectors. There are also other funding initiatives such as cyber security innovation and other IT projects the government has initiated. These overall projects form only a snapshot of government funding examples but provides a glimpse of the overall innovation policy and where the government is heading in respect of stimulating research and development.

Mark Morris: So what is the majority emphasis of the government funding Leigh?

Leigh Conlan: Well Mark, the big spend by the government is still the R&D tax incentive which equates to just over $4.5Billion per annum. While the majority of that money goes into business, it should be kept in mind that research service providers also greatly benefit from this policy and there are valuable private business spinoffs from research organisations.

Mark Morris: When you talk about R&D, it’s not all lab coat style research projects is it?

Leigh Conlan: Not at all. We see R&D in areas where you would not ordinarily think that R&D would apply. Research and Development takes place in a variety of forms and industries. Some examples may be building and construction, on farms and of course software development. We have come across a number of private organisations, particularly those which are small scale, which were under the misconception that many of their activities would not be considered R&D when in actual fact they may be.

Mark Morris: Can you talk a little more about such products and processes in this regard?

Leigh Conlan: Well, many organisations are undertaking the development of products using a scientific methodology to determine outcomes and therefore creating new knowledge as a result of these activities.  It is also very exciting to see a variety of small to medium enterprises across Australia undertaking a number of dynamic projects which involve Research and Development as well as new commercialisation of innovative products.

Mark Morris: So given you are across many organisations who are at the cutting edge of technology, I assume that you have other areas you advise on?

Leigh Conlan: That’s correct. Specialist Accounting Services is unique as we have technical expertise and we can assist in a variety of capacities including comprehensive advice in the areas of commercialisation, government development and early stage development grants, government support programs and investing in early stage development funding.

Mark Morris: So can you provide more detail in regards to government incentives and programs that you advise in?

Leigh Conlan: Sure, one such program is around the commercialisation Australia program which provides funding of up to $200,000 to assist new organisations and those wanting to test the viability of product commercialisation. Also we have provided advice in relation to cooperative research centre (CRC) project grants as well. The CRC and associated grants is an outcome focused programme designed to support industry while supporting collaboration between industry, research and the community in a competitive framework.

Mark Morris: Have there been many changes by the government in relation to government grants and assistance?

Leigh Conlan: Yes there have been changes in regards to the tech sector that were previously restricted on applying for grants. These have now been removed to stimulate commercialisation and the development of novel IP across a broader range of industries across Australia. We see the government’s focus in this domain is on stimulating new knowledge, local IP and bringing innovative products to market in order to stimulate economic and employment growth.

Mark Morris: So have you seen many examples where universities specifically benefit from the R&D tax incentive scheme?

Leigh Conlan: Yes Mark I have seen this a number of times where universities are providing services to private organisations and where both benefit from the close collaboration undertaken. One such example is one our clients in the ehealth domain where a prominent Victorian university provided research assistance in evaluating IT architecture suitable for gathering information around broad based and large scale health records.

Mark Morris: So this is all research and development expenditure around software and IT?

Leigh Conlan: Correct Mark, we have also been involved with a number of initiatives in the private sector relating specifically to analytics and big data projects.

Mark Morris: Can you elaborate on how these initiatives may provide beneficial outcomes for the private sector, RSPs as well as the general public?

Leigh Conlan: We have seen a number of initiatives carried out by the big four banks in relation to blockchain. The key objective of blockchain is to develop a distributed database ledger which can continuously update records between parties and therefore improve the efficiency of banking transactions.

Mark Morris: That’s very interesting. Do you see any other developments relating to big data in the private sector?

Leigh Conlan: Actually we have also seen developments in the Telecommunications sector where a number of Australian telco’s have been building big data lakes and utilising these data repositories for a number of practical applications such as geolocation, product marketing and improving operational uptime.

For the second part of this interview, keep an eye on the Business Newsroom blog!

LBS’s Mark Morris: “What is the future of accounting?”

MM_Future

Recently, LBS Professor of Practice Mark Morris gave a presentation on the Future of Accounting at the Australian Tax Office. In the presentation, Mark speaks about how the ATO has adapted themselves to a changing world in the past, and how he thinks they can adapt themselves to new technology in the future. Mark looks at what the key drivers are of the profession changing in the framework of a globalised world, and where tax firms are and need to be now. He addresses questions like ‘How can firms stay ahead of the curve?’, ‘What skillset do they need?’ and ‘What strategies do tax firms need to develop for a market in 2020?’

To know what his answers to these questions are, watch Mark Morris’s presentation in full, below:

 

Is it Student Refund Time?

Mark Morris La Trobe Business School Professor of Practice

By Mark Morris [1]

For many students there are probably few more off-putting or intimidating chores than the prospect of preparing and lodging an income tax return with the Australian Taxation Office (the ATO).

However, where the income tax deducted from a student’s part-time job exceeds the total income tax payable for the tax year the only way in which a student can generally obtain a refund of the overpaid income tax is by lodging an income tax return.

Of course other students will be legally required to lodge a return and pay tax where insufficient income tax been retained from their salary, or where they derive other categories of assessable income in respect of which they have not paid enough income tax.

So how do students navigate their way around the complex and seemingly impenetrable world of Australian tax?

Well here are a few tips to guide you on your way in working out whether you need to lodge an Australian income tax return for the year ended 30 June 2016, and how to prepare a return should you need to file one with the ATO.

  1.  Are you an Australian tax resident?

The first step is to work out if you are an Australian resident for Australian income tax purposes.

If you were born in Australia and continue to live here, you will be regarded as an Australian resident for income tax purposes as this is the country in which you reside.

However, it is important for international students to recognise that being a resident for Australian tax purposes is quite different to being a permanent resident for Australian immigration purposes, and that they may sometimes unknowingly be an Australian tax resident.

Very broadly, an international student may be regarded as residing in Australia if they are here for such a period of time that their behavior reflects a degree of continuity, routine or habit that is consistent with residing in Australia.

Whilst it is a question of fact in each case as a broad rule of thumb the ATO takes the view that living in Australia for six months is a period of time which is generally consistent with a person residing here for tax purposes.

For example, in one of the ATO’s binding public taxation rulings it held that an overseas student who came to Australia to attend a pre-arranged 4-year university course was an Australian resident even though he left after 6 months to return to his home country following a family illness as his living and working arrangements whilst in Australia were consistent with someone whose pattern of behavior was that they resided in Australia[2].

Accordingly, if you are unsure whether you are an Australian resident for income tax purposes you should contact the ATO or a registered tax agent to obtain more clarity as to whether or not you are an Australian resident in working out your tax rights and obligations.

  1. What happens if you are an Australian tax resident?

Assuming you are regarded as an Australian resident for tax purposes what are some of the key tax implications you need to consider.

On the plus side you will be entitled to a tax free threshold which will mean that you do not pay any income tax for the year ended 30 June 2016 if your total taxable income was $18,200 or less.

Accordingly, if you worked part time and derived salary income from which income tax was deducted by your employer you will be able to obtain a tax refund of any Pay As You Go (PAYG) tax retained from your salary income if your total taxable income was $18,200 or less.

In practice, most individual resident taxpayers will also usually be entitled to a tax credit being the low income tax offset which means that no tax will typically be payable if that person’s taxable income is below $20,542. However, the amount of this this tax offset reduces tax payable but is not in itself refundable.

On the negative side you will be subject to tax on all your assessable income for the year ended 30 June 2016 regardless of where it was sourced. For example, an overseas student would need to include both their Australian salary income and any interest income earned in a bank account held in their home country.

In addition, Australian residents are subject to a 2% Medicare levy but only where their taxable income exceeds certain thresholds.

By contrast a non-resident is only taxable on assessable income which has an Australian source being generally locally derived investment income. However, such income will be subject to tax at a rate of 32.5% for any taxable income derived up to $80,000 as there is no tax-free threshold for non-resident individuals.

  1. What do I need if I want to lodge a return for the 2016 year?

Most students who have been employed would have already been issued a tax file number which is a prerequisite for every individual lodging an income tax return.

If for some reason you are lodging a return but do not have a tax file number you will need to apply for one from the ATO either directly or by using a registered tax agent.

You should then collate all the records and information you will need to prepare you income tax return including, amongst others, any payment summary, bank interest statements, dividend slips, invoices and receipts.

Assuming you have a tax file number you may consider preparing and lodging your income tax return on-line using the ATO’s myTax product if your tax affairs are reasonably simple. Further details on myTax can be found, here.

Otherwise it may be prudent to contact a registered tax agent to ensure you identify all your entitlements and to ensure that your income tax return is correctly prepared.

Regardless of how you lodge your return you will need to disclose full bank account details when preparing your income tax return if you expect to receive a tax refund.

  1. What types of income need to be included in your return?

As discussed, as an Australian resident you will be taxed on all of your assessable income wherever it is derived.

Some of the more common types of assessable income include the following:

  • Salary and wages (whether as a full-time, part-time or casual employee);
  • Allowances and bonuses (where received during the 2016 income year);
  • Tips and gratuities (such as those received working in hospitality jobs);
  • Fees received is an independent contractor under a contract for service;
  • Any business income derived during the year (not being income derived from carrying on a hobby);
  • Australian government payments and allowances including, amongst others, Newstart allowance, youth allowance, AuStudy payments and certain other educational and training allowances;
  • Interest income;
  • Dividend income (including the amount of any franking credit tax offset for any franking credit attached to a dividend paid by an Australian resident company);
  • Any distributions received as a beneficiary from a family trust or as a partner in a partnership; and
  • Capital gains arising from the disposal of certain CGT assets (which is a highly complex area requiring specialist expertise).

The total of such assessable income may be reduced by eligible deductions which may take the form of work-related deductions, self-education expenses in certain circumstances and personal deductions.

  1. What type of work-related deductions can you claim?

You may be entitled to claim a deduction for expenses directly incurred in the course of gaining or producing your assessable income. However, you will not be able to claim an outright deduction which is capital in nature although you may be able depreciate certain capital assets like a computer over time for tax purposes. In addition, you will not be entitled to claim a deduction for expenditure which is private in nature such as the cost of conventional clothing (e.g. suits) purchased for work purposes.

Some of the more common types of deductions you may be able to claim are as follows:

  • Work-related subscription and union fees;
  • Protective clothing and certain work uniforms (including compulsory work uniforms required by your employer);
  • Home office expenses (where you are required to work at home after hours and have a separate room allocated in your home study for that purpose);
  • Employment related telephone mobile and internet costs; and
  • Travel expenses between worksites (but excluding travel between home and work)).

You may also be entitled to claim a deduction for the cost of tools of trade, briefcases and calculators costing less than $300 to the extent to which you use it for work-related purposes.

However, you will only generally be able to claim any work related expenses costing $300 or more if you have retained all the relevant invoices and receipts.

  1. When are self-education costs allowable?

Broadly, self-education expenses are only deductible to the extent that the course of study undertaken will either maintain or improve your skills in your current occupation.

Accordingly, you will not be entitled to claim the costs of your course if you’ve not yet embarked on a particular career. Nor will you be able to claim such costs if you have decided to change careers and have incurred such expenses in studying a new area of expertise.

However, you will be able to claim a deduction for self-education expenses where the study or training you are undertaking is likely to enhance your chances of promotion or increase your income earning capacity in your existing occupation.

Further details as to when self-education expenses are allowable or not are set out in Taxation Ruling TR98/9 which can be downloaded, here.

Eligible self-education costs include, amongst others, course fees, textbooks, stationary, travel costs and the depreciation of items such as laptops, tablets and printers. However, it is necessary to add back $250 of any self-education expenses as being non-allowable.

Finally, any Higher Education Loan Program (HELP) repayments are non-deductible.

  1. What other personal deductions may be allowable?

Donations of $2 dollars or more to a deductible gift recipient (e.g. a charity like the Red Cross) will be allowable provided you have kept copies of receipts for any gifts made.

You can also claim a deduction for any fee paid to a registered tax agent during the year ended 30 June 2016 for the cost of managing your tax affairs. However, any amount paid to a registered tax agent to assist you in in preparing your 2016 income tax return will only be deductible in the year ended 30 June 2017.

  1. What tax offsets can you claim?

Whilst tax deductions may reduce assessable income tax offsets are directly applied as a credit to reduce tax payable.

Certain tax offsets may also result in a refund to the extent that the tax credit exceeds tax payable.

The most common tax offsets that a student may claim include the beneficiary tax offset, the franking credit tax offset and the small business tax offset.

A beneficiary tax offset may be available where a student receives a newstart allowance, youth allowance, Austudy payments and certain other Commonwealth education or training programs.

The calculation of this offset can be complex but this offset may not only reduce tax payable on the amount of Government benefits received but also assessable income received from other sources.

Further details on the beneficiary tax offset can be found, here.

A resident company may pass on a tax credit for tax it has paid to shareholders when it pays such shareholders a franked dividend. Such a tax credit can be claimed as a franking credit tax offset which may also result in a tax refund where the franking credit exceeds tax payable.

Finally, where a student is also carrying on a business that individual may be entitled to the small business income tax offset for the year ended 30 June 2016 being 5% of the income tax payable on the portion of an individual’s taxable income that is ‘total net small business income’. An individual is only able to claim one small business tax offset for an income year irrespective of the number of sources of small business income derived by that individual and the maximum amount of the offset is capped to $1,000 per year. The application of this offset is also quite complex and specialist advice should be sought if you intend to claim it.

  1. What are some of the potential traps to watch out for?

There are special rules to discourage adults from splitting income with their children (i.e. minors) aged under 18 at the end of the year unless that minor is engaged in a full-time occupation, receives a carer allowance, disability support pension or double orphan pension or a person who is disabled or a beneficiary under a special disability trust.

Where the minor is subject to these special rules, penalty tax rates apply to such children receiving dividends, interest, rent, royalties or a family trust distribution.

Where such income is between $417 and $1,307 tax will be paid on the excess of income over $416 at a rate of 68% whilst any amount of such income in excess of $1,307 will be subject to tax at a rate of 47%.

  1. Where do I go for help?

If you believe that you required to lodge an income tax return or that you may wish to lodge a return in order to obtain your tax refund, you may wish to either contact the ATO or look at their website for more details on the ATO’s website.

Should you want to get independent tax advice then try to locate an accountant who has the tax expertise to makes sure you lodge a correct income tax return but make sure that the accountant is also a registered tax agent who has been legally authorised to provide such services.

And if you are entitled to a tax refund go get it!

[1] La Trobe University has used reasonable care and skill in compiling the content of this general commentary. However, it should not be relied upon as advice in any circumstances, and no warranty is provided by either the University or the author concerning the accuracy and completeness of these materials. Accordingly, they disclaim all and any liability to any person in respect of reliance on any of the matters raised in these materials, and professional advice should be sought from an appropriately qualified registered tax agent where required.             

 [2] Refer to Example 8 of Taxation Ruling TR98/17.

Watch: LBS Professor of Practice Mark Morris speaks about changes in the world of Australian taxes on CPA-Australia Panel

MM_CPA
Recently, La Trobe Business School’s Professor of Practice Mark Morris was invited speak on a high-level panel regarding the new Standard Business Rerporting (SBR)-enabled practitioner lodgment service. The panel was hosted by CPA Australia. This new service will replace the old Electronic Lodgement Service (ELS). Along with ATO Assistant Commissioner Andrew Watson and Keith Clissold FCPA, Mark spoke about what it means for these changes to be put through from a practitioner’s perspective, why they are necessary and what this means for the future of the accountancy profession. The panel was moderated by Gavan Ord, Manager Business Investment Policy, at CPA Australia.

Watch the segments in full on YouTube.

LBS Professor of Practice Profiles – Mark Morris: “I always wanted to teach.”

Mark Morris La Trobe Business School Professor of Practice
From early 2015, La Trobe Business School has introduced a team of Professors of Practice, staff with extensive industry experience. As one of the first Business Schools in Australia to pioneer this concept, LBS’s goal is that the Professors of Practice will provide their students with professional and practical insights into the business world, and that they will form a connection between industry and LBS students, contributing to the students’ business knowledge and employability.

Appointed as one of the Department of Accounting’s Professors of Practice, Mark Morris’s extensive tax experience in industry is a considerable resource to LBS and to the university. “I think I have a very unusual career,” he says, “in that I have been exposed to most facets of tax in virtually all market segments since I joined the profession over 30 years ago.”

Starting out in the big four accounting firms, Mark moved on to be the Tax Manager for Foster’s Brewing Group Ltd. After this, he spent eight years as the Tax Counsel at Mobil Oil Australia Ltd and then worked as the Group Tax manager at GM Holden Ltd. Thereafter he was a Tax Principal with two mid-market chartered accounting firms before ending up as the Senior Tax Counsel at CPA Australia for more than nine years.

At CPA Australia, Mark’s role involved consulting with Treasury and the Australian Taxation Office on the design, interpretation and administration of all Federal taxation laws, including liaison with a diverse range of members over a wide array of issues. Mark was also heavily involved in providing media comment on pressing issues, through both traditional and new media, either as a direct commentator or by presenting the organisation’s views on tax developments.

Mark has also presented at numerous professional forums about contemporary issues impacting the tax profession and the broader community “I am fortunate that I have garnered a wide range of experience and knowledge across various environments which I can bring to the table to the La Trobe Business School,” Mark comments, “And I always wanted to teach. So, this seemed like a great opportunity to share my insights with students who I hope benefit from some of my professional experiences.”

Having worked with a number of LBS students, Mark recognises that students need an adaptive skillset in today’s job market more than ever. According to him, being able to bring practical examples of what happens in the real world into the classroom is one of the main tasks of a Professor of Practice. Mark comments: “I try to provide insights as to what they will find in the workplace wherever I can, because this is exactly the kind of knowledge that can give them an edge to stand out from the crowd. With the rise of Big Data, new technologies, outsourcing and a competitive market, graduates need to have a clear strategy when it comes to their skillset, their personal branding, and their industry connections.”

In Mark’s opinion, having the Professors of Practice in place adds further value to LBS and helps to build bridges between industry, students, and the broader community. “We create plenty of meaningful research at La Trobe Business School. If we can combine this intellectual resource with engaging teaching methods we can hopefully infuse our students with a greater commercial skill set as well as a strong theoretical foundation, which can make an enormous difference for graduates and future employers.” Mark says. “In that sense, being a Professor of Practice is a terrific role, because not only do we get to be very creative in our teaching, but we can also actively add value through our industry experience and connections. And when we create and reinforce strong relationships with several professional organisations – as La Trobe Business School has done – students will be able to get relevant work experience, while employers benefit from a pair of extra hands on deck. In this type of situation, everybody wins.”

 

The Reform We Have To Have: The Superannuation Challenge

Mark Morris La Trobe Business School Professor of Practice
By Mark Morris

Like many baby boomers I am reluctantly coming to terms with the need to bump up my superannuation contributions so that I can fund a reasonable lifestyle in retirement.

However, I find it hard to generate much enthusiasm for the prospect given the tantalising alternatives of an annual trip to London or an upgrade of the family car. Nonetheless the rationalist in me knows it is something I should do.

Accordingly, one of the very last things I want to grapple with when I struggle to make extra superannuation contributions is yet another barrage of tax changes to our superannuation laws.

However, I accept that tax changes to our superannuation regime are now inevitable as the costs of maintaining the existing superannuation rules are unsustainable and difficult to justify in the more straightened times we live in.

In part, this is because Treasury’s 2014 Tax Expenditures Statement vividly illustrates the burgeoning costs of maintaining our current superannuation regime most of which was set in place way back in May 2006 when the country was thriving under the mining boom. For example, Treasury estimated that the cost of maintaining the concessional tax treatment of employer sponsored contributions alone would be $18.1 billion for the 2016-17 year.

At the same time the Turnbull Government needs to urgently find sufficient revenue to finance the cuts in corporate and personal tax rates needed to lift national investment and productivity in a period of falling revenues.

In this context it looks increasingly unlikely that such cuts will be fully financed through an increase in the Goods and Services Tax rate and/or base, especially given the Opposition’s commitment to fight such reforms.

Accordingly, the Turnbull Government is slowly but surely building up its rhetoric on superannuation reform including its oft mentioned references to tax reform which is both fair and equitable.

In doing so it rarely refers to the fact that it is easier to sell superannuation reform where the impact of cost savings only hit home at some vague point in the future as opposed to GST reform where increased prices will immediately hit the hip pocket.

You really grasp such reforms are almost fated to occur when the Financial Services Council urge the Federal Government to cut back superannuation concessions for high income earners as they did on January 14. When a peak body representing superannuation and management funds calls for a revamp of superannuation concessions for the wealthy you know that a major overhaul to the superannuation regime is almost certainly on the agenda.

Hence, as there is growing consensus that there needs to be some form of superannuation reform, what policy options are available to effect those changes? Especially if the Federal government wants to generate sufficient revenue to help finance more broad-based tax reform?

In my view the Federal government should consider four major policy changes.

First and foremost there is real merit in revisiting Recommendation 18 of the Henry Tax Review which proposed that the tax on superannuation contributions be abolished, and that superannuation contributions should be taxed as income in the hands of individuals at their marginal rates, albeit subject to a 15% refundable tax offset.

In these circumstances a high income earner subject to the current highest marginal rate of tax of 49% would obtain a 15% tax offset in respect of any employer superannuation contributions made whilst a low income earner on the 19% tax rate would similarly receive a 15% tax offset thereby leading to a more equitable tax treatment of superannuation contributions.

We would therefore avoid the current scenario where a multi-millionaire’s superannuation fund effectively pays 15% tax on contributions received being the same 15% tax rate that would apply to a fund receiving employer contributions made on behalf of a sales assistant deriving an annual taxable income of $40,000.

Deloitte recently championed a variant of this proposal in its publication “Shedding light on the debate – Myth busting tax reform” which it suggested would generate a reform dividend of around $6 billion in the 2016-17 year. Not surprisingly similar changes are also the centrepiece of the recent modelling undertaken by the Financial Services Council in tandem with PWC on possible superannuation reforms.

Second, the Turnbull Government should consider the former Government’s proposal that income derived by a fund in pension mode should only be tax-free up to $100,000 a year with any excess subject to tax at a rate of 15%. Whilst this change was only expected to generate around $350 million back in April 2013 the revenue take from such a proposal could be further increased if transitional relief under that measure was ditched and a more punitive rate than 15% applied to funds generating $300,000 or more taxable income per year.

Third, we should revisit the notion that funds are entitled to a refund for excess imputation credits. It is wholly appropriate that funds should be able to extinguish their 15% tax liability during the contributions phase but another thing altogether to allow them to also get a refund of the 15% surplus franking credits on dividends franked at 30% in the dollar.

Finally, it makes little sense that funds in the contribution phase should only pay an effective tax rate of 10% on any capital gains made, being a one third discount on the 15% tax rate that applies to such funds. In a sense this is a doubling up of concessions as the fund is already subject to a low rate of tax being 15% and does not require an additional CGT concession to encourage investment.

Of course we should all recognise that implementing the above changes will invariably mean that some people are worse off being predominantly high income earners.

As is the case with any tax reform some will lose and will have to wear some grief.

However, such changes are absolutely crucial if we are to sustain a superannuation regime which is both robust and fair, and which will provide the additional revenue needed to finance much needed tax reform.

Put simply, superannuation tax reform is a change we have to have if the country is to prosper.

“Near Enough is Good Enough”

Mark Morris La Trobe Business School Professor of Practice
By Mark Morris

It’s not often that I intuitively align the laborious machinations of industry policy deliberations in Canberra with the wise intonations of the Rolling Stones but that is exactly how I responded after I digested the Federal Government’s National Innovation and Science Agenda report issued on Monday 7 December 2015.

As Mick and Keith once sagely wrote ‘You can’t always get what you want but if you try sometime you find you get what you need.’ This pretty much sums up the overall impact of the myriad of changes announced which collectively makes Australia a far more attractive place in which to invest in innovative businesses. This is the case even if the report falls short of the cutting edge vision of economies like the United Kingdom.

On the plus side it is clear that the Federal Government has commendably adopted a multi-disciplinary approach to improving research and development (R&D) and related commercialisation. It has done this by proposing measures that enhance access to venture capital, drive closer collaboration between universities and industry, improve educational outcomes in science, technology, engineering and maths, ensure digital by default delivery of government services and capitalises on the growth of big data and the need to leverage it for the benefit of the economy through advanced data analytics.

As such the Federal Government is seeking to apply a more holistic view on innovation policy along the lines championed by the Cutler Review of the National Innovation System way back in 2008. This was before the Global Financial Crisis derailed the process to the point where we did not need a Minister for Science as if that distracted us from the fixation of repairing the Budget Deficit.

Crucially the tax settings of the new innovation regime are also a considerable improvement over the status quo. Tax incentives are not only available for companies undertaking R&D but also for investors who provide the venture capital to fund the commercialisation of any resulting R&D.

Accordingly, the Federal Government has finally recognised that tax breaks need to be provided over the life cycle of a business to encourage entrepreneurs to conduct and invest in risky projects which may ultimately not be viable especially in the new rapidly dynamic and volatile digital economy.

As a case study to the Report highlights the retention of the existing refundable R&D tax offset allows start-up companies to leverage tax credits to help finance eligible research and development. This is so, even if it appears that the offset will be retrospectively cut from 45% to 43.5% from 1 July 2015).

This has been augmented by new tax breaks which allow individual investors a 20% non-refundable tax offset for investments in certain start-ups, and a capital gains tax exemption where investments held in such companies are held for more than three years but less than 10 years. In addition, partners in early stage venture capital limited partnerships (ESVCLP) will get a 10% non-refundable tax offset on capital invested in the partnership which can now raise funds of up to $200 million in early stage development of eligible activities.

Taken collectively there is therefore much to be praised in the new package.

So where does it fall down?

Firstly, the Report flags that there will be yet another review of the efficacy of the R&D incentive by the newly created Innovation and Science Australia Board. This concession has been around in various forms since 1985 and has had almost as many reboots or variants as the James Bond franchise. The last thing that an innovative entrepreneur wants to see is uncertainty as to whether it will still be around to help finance their initial R&D so let’s hope it is enhanced and not diminished.

Secondly, the take up in ESVCLP has tended to be relatively low as high wealth investors with surplus cash want some control over their venture capital investment. This is not the case with this investment vehicle where your investment is generally capped to a maximum 30% interest. I do not see that radically changing because of the prospect of a 10% non-refundable tax offset. And the proposed rules on other investors are typically over-restrictive.

Thirdly, and perhaps most importantly, the Report does not address our internationally uncompetitive corporate tax rates of 28.5% and 30%. Additionally, the demarcation between those tax rate regimes can itself be a practical nightmare to navigate.

How does this compare to the United Kingdom’s 18% corporate tax rate to apply from 1 July 2020, and particularly to royalties and capital gains arising from intellectual property subject to their patent box regime which will likely be subject to further concessional tax treatment?

I would suggest not that well even if it is not an apple to apple comparison.

It’s true that businesses don’t do things solely because of a tax break but a whopping differential in tax rates could be a deciding factor in a mobile digital world as to where you want to invest your capital in innovative products and processes.

However, even if the proposed changes fall short of addressing all facets of our international competitiveness they do signal that our Federal Government is finally serious about instilling an innovation mentality and culture in our businesses, universities and the broader community.

Which leads us back to Mick and Keith.

Maybe the announced changes are not what we ideally want in becoming an international trendsetter on innovation but maybe it’s what we need to allow us to nationally lift our head and embrace being part of the new innovative digital economy.

And given where we have been perhaps that is enough at this point.

 

Seminar: The Future of the Tax Profession

FutureTaxProf
La Trobe University’s Centre for Public Sector Governance, Accountability and Performance (CPSGAP) invites you to attend its Seminar on “Future of the Tax Profession” on Monday 30 November 2015.

Abstract

The seminar will address a number of points including:

  • Digital transformation of the tax regime especially the introduction of standard business reporting
  • The ATO’s reinvention program and the way it is challenging conventional paradigms of tax administration
  • The parallel changes facing the tax profession and its response to various challenges including, amongst others, digital disruption, offshoring, globalisation and a more informed public
  • The roadmap ahead for change with emphasis on adaptiveness and changing skill sets.

Access the event flyer, here.

Speakers

Colin Walker ATO La Trobe Business School La Trobe UniversityColin Walker is an Assistant Commissioner in the Tax Practitioner Lodgment Strategy and Compliance Support group of the Australian Taxation Office (the ATO) and is currently responsible for managing the relationship between the ATO and tax practitioners and other intermediaries in the tax and superannuation system.

Colin has previously held a variety of senior roles with the ATO including the development and implementation of significant new legislative programs including the Tax Consolidations regime, the Review of International Tax, the Childcare Rebate, the former Minerals Resource Rent Tax and the Petroleum Resource Rent Tax.

He also has extensive experience with the International Monetary Fund providing in country technical assistance in tax and customs policy and administration in many overseas developing countries.

Mark Morris La Trobe Business School Professor of PracticeMark Morris is a Professor of Practice in Taxation in La Trobe University’s Business School where he teaches both undergraduate and postgraduate taxation and actively contributes to broader industry engagement initiatives between the Business School and the tax profession and other key stakeholders.

Mark also Co-Chairs the ATO’s ‘Future of the Tax Profession 2016’ working group with Colin which comprises senior representatives from the ATO, professional bodies, software developers and practitioners concerning the implementation of the ATO’s standard business reporting initiative.

He has over 30 years experience in senior tax roles in chartered accounting, industry and professional bodies including his former long-term role as Senior Tax Counsel with CPA Australia.

Seminar

Date: Monday 30 November 2015

Time: 4.00pm – 6.00pm

Venue: Level 20, 360 Collins Street, Melbourne

RSVP: Please respond by Friday 20 November, 5.00pm, via the La Trobe web page.

© 2017 Business Newsroom

Theme by Anders NorenUp ↑