Unions welcome changes to employee share ownership

12 June 2009

In a submission to Treasury today, four unions welcomed the Government's proposed changes to employee share ownership schemes (ESOPs).

The proposed amendments, announced last week, would lift the income threshold from $60,000 to $150,000 for tax exemption on share allocations up to $1,000. They would undo unpopular measures announced in the 2009 Federal Budget.

The unions, whose members were most affected, opposed changes to ESOPs, arguing their members on modest incomes were being penalised in the attempt to close tax loopholes used by executives.

The unions-the Australian Services Union; Australian Workers' Union; Finance Sector Union; and Shop, Distributive and Allied Employees Association-made a joint submission regarding Treasury's proposal on Friday.

"We're pleased the Government has recognised that employee share ownership isn't a tax loophole for ordinary workers," said Leon Carter,

FSU National Secretary. "When shares vest or are sold, they are declared on tax returns."

"Giving employees a small allocation of shares in a company is vastly different to millionaire executives exploiting tax loopholes. Comparing them never made sense and we welcome this change of heart."

After the Budget, some employers announced suspensions or cancellations, which the unions said they hoped would be re-instated.

"We now need to see a change of heart from employers who announced suspension or cancellation of employee share schemes," said Mr Carter.

Mr Carter said the new limit of $150,000 is fair and reasonable.

ASU Assistant National Secretary Linda White said, "Many workers do earn more than $60,000 a year, but nobody would consider them rich. The revised limit reflects the juggling act that mortgages, families and modern life brings, while ensuring executives pay their fair share of tax like every Australian."