Groups of formerly disengaged and uncommitted employees will soon be queueing at HR’s door to ask for copies of your company’s new employee share scheme (ESS), or so runs the unwritten subtext of the Australian Federal Government’s new proposals in respect of employee participation in business ownership.

After much deliberation the Australian Federal Government has produced the Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015 which, if passed, will make it easier and more tax-friendly from 1 July 2015 for employees to participate in your ESS.

Some of the positives are:

  • the taxing point for options may be deferred to the time of exercise;
  • fewer administrative headaches where global ESS plans are offered to Australian employees; and
  • employees of eligible start-up companies will qualify for concessional tax treatment, for example there will be a tax exemption on shares provided at a discount of up to 15%.

Australian companies with confidence in their future will now be dusting off their old incentive policies and making sure their ESS plans are structured to take advantage of the new tax deferral plans.  Multi-nationals will no doubt be talking up their global plans to their Australian employees with a whole new vigour.

Let’s all get rich together’ could become the new workplace mantra. Or not, depending on how well the Government has judged the mood of the moment in relation to worker participation.