Queensland Reds winger Sefa Naivalu has joined Australia’s post-World Cup European exodus, with French club Stade Francais announcing he has signed a three-year deal.
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Rugby union’s player drain to Europe could intensify and the A-League’s bid to attract more marquee players become even tougher as a result of proposed tax changes in the federal budget which have “blindsided” Australia’s elite athletes.
The Australian Athletes Alliance (AAA) has written to Treasurer Scott Morrison requesting an urgent meeting to discuss measures it says will “undermine the viability of Australia’s sporting industry.”
The changes would stop all athletes – including semi-professionals, aspiring Olympians and the elite – from reducing their tax bill by licensing their name and image rights to another entity.
The effect is that portion of their earnings from sponsorships and the like would no longer be taxed at the lower company tax of 27.5 per cent and would be included in their assessable income.
While the impact would be significant for all sports – especially women’s athletes, whose image-related income can sometimes exceed their actual salaries – it is likely to hit codes played internationally the hardest.
That includes rugby and soccer, which already face challenges in keeping top Australian talent in the country.
Rugby Union Players Association CEO Ross Xenos fears it will only encourage more Australians to head to countries like France, England and Ireland, which have more favourable tax systems for athletes.
“Retaining our top talent is, year on year, becoming a bigger challenge as the European markets grow their commercial capacity,” Xenos told AAP.
“These sorts of image rights structures have been important. Without them we either need to accept the fact we won’t be able to keep as many of our top athletes.
“Or, if to maintain a competitive roster of our top players for international success of the Wallabies, this change to tax interpretation would put inflationary pressure on player salaries, which further undermines the money sport can invest in community and grassroots.”
Similarly, Professional Footballers Australia chief John Didulica said soccer will struggle to keep players in Australia, as well as bring big names like Alessandro Del Piero to the country.
“It’s not like the players have concocted some sort of exotic scheme to avoid paying their full whack of tax,” Didulica told AAP.
“These are principles that have been in place, legally, for decades.
“We’re now giving players another reason to leave Australia and go to other markets.”
AAA general secretary Jacob Holmes suggested the implications of the move hadn’t been “fully considered” by the government.