Commonwealth of Australia Explanatory Memoranda

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CORONAVIRUS ECONOMIC RESPONSE PACKAGE AMENDMENT (ENDING JOBKEEPER PROFITEERING) BILL 2021

                             2019-2021




     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                              SENATE




CORONAVIRUS ECONOMIC RESPONSE PACKAGE AMENDMENT (ENDING
             JOBKEEPER PROFITEERING) BILL 2021




                EXPLANATORY MEMORANDUM




              (Circulated by authority of Senator McKim)
CORONAVIRUS ECONOMIC RESPONSE PACKAGE AMENDMENT
(ENDING JOBKEEPER PROFITEERING) BILL 2021

OUTLINE

This Bill will have the effect of:
          Delaying the ability of certain entities to claim any GST input credits for ten years,
           or until they pay the amount of JobKeeper they received equal to the amount of
           profits made and/or executive bonuses paid during the Financial Year period in
           which it received the JobKeeper payment. These entities do not include businesses
           with an annual turnover of less than $50 million.
          Requiring the Australian Taxation Office to publish a list of all entities in receipt of
           JobKeeper payments, and how much they received, excluding those with an annual
           turnover of less than $50 million.

This Bill is required to ensure that large corporations do not profiteer from JobKeeper
payments, and to introduce transparency measures around the receipt of JobKeeper funds by
large corporations.

NOTES ON CLAUSES

Clause 1: Short Title

This clause provides for the Act to be cited as the Coronavirus Economic Response Package
Amendment (Ending Jobkeeper Profiteering) Bill 2021.

Clause 2: Commencement

This clause provides for the whole of this Act to commence the day after it receives Royal
Assent.

Clause 3: Schedules

Each Act specified in a Schedule to this Act is amended or repealed as is set out in the
applicable items in the Schedule. Any other item in a Schedule to this Act has effect
according to its terms.

Schedule 1--Amendments

Amends the Coronavirus Economic Response Package (Payments and Benefits) Act 2020
Item 1

Inserts definitions for annual turnover, jobkeeper payment and jobkeeper scheme in section 6
of the Act.

Item 2
Inserts section 19A, defining when an entity has profiteered from jobkeeper payments, and
setting out that such entities will have their entitlement to claim input tax credits delayed for a
ten year period or until the entity voluntarily pays the sum which it profiteered from
jobkeeper payments, whichever is the earlier.

A entity with an annual turnover of more than $50 million for the financial year is considered
to have profiteered from jobkeeper payments if one or more of the following applies:

        The entity made a profit;

        The entity paid dividends to shareholders of an entity;

        The entity paid a bonus to an executive of an entity.

Section 19A also provides for a reduced input credit deferral period and specifies the limit on
the amount entities would need to pay in order to achieve this. For example, an entity that
received $50 million in jobkeeper payments and made $20 million in profits would need to
pay back $20 million in order to end the input credit deferral period. An entity that received
$50 million in jobkeeper payments and made $60 million in profits would need to pay back
$50 million in order to end the input credit deferral period. The entity is also required to give
written notice to the Commissioner stating the payment has been made, the amount of the
payment and the date the payment was made.

Inserts section 19B, requiring the Commissioner of Taxation to publish information about
each entity that has received jobkeeper payments, if the annual turnover for a financial year in
which the entity received a jobkeeper payment is more than $50 million. The information to
be published includes:

        The name of the entity and its ABN;

        The total amount of jobkeeper payments received by the entity;

        The details of any voluntary payment the entity has made for the purposes of section
         19A and the date of the payment, if applicable;

        Any further information prescribed by the rules.
                  Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011


Coronavirus Economic Response Package Amendment (Ending Jobkeeper Profiteering)
                                   Bill 2021


This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.


Overview of the Bill
This Bill will have the effect of:
          Delaying the ability of certain entities to claim any GST input credits for ten years,
           or until they pay the amount of JobKeeper they received equal to the amount of
           profits made and/or executive bonuses paid during the Financial Year period in
           which it received the JobKeeper payment. These entities do not include businesses
           with an annual turnover of less than $50 million.
          Requiring the Australian Taxation Office to publish a list of all entities in receipt of
           JobKeeper payments, and how much they received, excluding those with an annual
           turnover of less than $50 million.


Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.


                                     Senator Nick McKim

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