AWU welcomes Government changes to Employee Share Schemes
02 July 2009
The Rudd government has reversed key elements of its crackdown on employee share schemes following strong union lobbying about Federal Budget measures which hurt many AWU members.
" These changes will offer more generous tax treatment of shares issued to workers, " Paul Howes, AWU National Secretary said.
Original Budget announcements hit workers' share rights
" This change of heart by the government should ensure AWU members participating in Employee Share Schemes will no more be disadvantaged."
Under the original arrangements announced on Budget night, all discounts on shares and rights provided under an employee share scheme would have been assessed in the income year in which shares and rights were acquired.
Business reacted sharply by suspending ESOPs
The crackdown sparked a backlash from union members after a wave of suspensions of employee share schemes by major companies.
The key new concessions include raising the threshold at which a $1000 tax break is no longer available from $150,000 to $180,000.
This carries further an earlier concession that increased the threshold from $60,000 to $150,000.
Joint union lobby campaign wins important concessions
The changes will also allow the deferral of tax for up to $5000 worth of shares under some salary sacrifice-based employee share schemes.
Another key change will allow tax to be deferred where shares are subject to performance criteria or their sale is subject to time restrictions.
Paul Howes said the AWU welcomes these changes which were the result of the AWU joining with a number of unions lobbying the government for concessions.
Employee share schemes will now be workable under new regime
" We believe those employee share plans which were put on hold should now be re-activated and made workable under the new regime.
" These changes will guarantee that workers are not disadvantaged by unintended consequences of a scheme designed to claw back the excesses of the big end of town," Paul Howes said.
National Secretary: Paul Howes