TAXES announced by Australia for Hong Kong-managed pension funds are not likely to have an adverse impact on portfolios, finance experts say. Fund managers say this is because the Australian equity portion in funds is less than five per cent on average. The taxation measures, due to take effect on July 1 in Australia, will not drive fund managers away from Australian equities either. Hong Kong-managed pension funds will be subject to withholding tax of 10 per cent on interest and 30 per cent on certain types of dividends on Australian equities, under the new laws. The measures will close a loophole which helped lessen the tax impact on dividends and income liabilities of Australian expatriates' retirement savings. Hong Kong fund managers said they would take these taxes into consideration in future allocations in their portfolios. Even assuming a 30 per cent tax on dividends the impact would be minimal because Australian equities represent less than five per cent on average of Hong Kong-managed retirement funds. Moreover, said a Jardine Fleming fund manager, the yield on Australian securities is less than 3.5 per cent at present. Wardley pension fund managers said that only three per cent of the company's total pension portfolio of HK$26 billion was invested in Australian equities. Wardley will not avoid Australian equities, and the tax legislation will be taken into account in making allocations among equities in different countries, said fund manager George Chan. Australian and New Zealand assets in Indosuez's Tasman Fund amount to US$4 million (about HK$30 million), according to spokesman Patrick Cushion.