Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TREASURY LAWS AMENDMENT (2022 MEASURES NO. 1) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Assistant Treasurer and Minister for Financial Services,
the Hon Stephen Jones MP)
Table of Contents
Glossary................................................................................................. iii
General outline and financial impact ...................................................... 1
Recovery grants for Cyclone Seroja ............................ 7
Transitional provisions relating to the repeal of the
Superannuation (Resolution of Complaints) Act 1993 11
Income tax and withholding exemptions for the FIFA
Women's World Cup .................................................. 19
Minor and technical amendments .............................. 21
Statement of Compatibility with Human Rights .......... 45
Attachment 1 Ramsay Review - Regulation Impact Statement ....... 51
Glossary
This Explanatory Memorandum uses the following abbreviations and acronyms.
Abbreviation Definition
AFCA Australian Financial Complaints
Authority
AFCA Act Treasury Laws Amendment (Putting
Consumers First--Establishment of the
Australian Financial Complaints
Authority) Act 2018
ASIC Australian Securities and Investments
Commission
Bill Treasury Laws Amendment (2022
Measures No. 1) Bill 2022
Disaster Recovery Funding Disaster Recovery Funding
Arrangements 2018 Arrangements which were set out in a
determination made by the then Minister
for Law Enforcement and Cyber Security
on 5 June 2018
FIFA Fédération Internationale de Football
Association (International Federation of
Association Football)
FWWC2023 Pty Ltd Wholly owned FIFA subsidiary
established for the purpose of delivering
the 2023 FIFA Women's World Cup
ITAA 1936 Income Tax Assessment Act 1936
ITAA 1997 Income Tax Assessment Act 1997
Legislation Act Legislation Act 2003
MYEFO Mid-Year Economic and Fiscal Outlook
Ramsay Review 2017 Review of the Financial System
External Dispute Resolution and
Complaints Framework
Glossary
Abbreviation Definition
Registrar The Registrars appointed under the
Business Names Registration Act 2011,
the Corporations Act 2001, the
Commonwealth Registers Act 2020, and
the National Consumer Credit Protection
Act 2009.
SCT Superannuation Complaints Tribunal
Superannuation Complaints Act Superannuation (Resolutions of
Complaints) Act 1993
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
General outline and financial impact
Schedule 1 - Recovery grants for Cyclone
Seroja
Outline
Schedule 1 to the Bill amends the ITAA 1997 to provide further support for small
businesses and primary producers impacted by Cyclone Seroja in April 2021. This
Schedule makes grants received in relation to Cyclone Seroja under Category C of the
Disaster Recovery Funding Arrangements 2018 non-assessable and non-exempt
income for income tax purposes.
Date of effect
Schedule 1 to the Bill applies to grants paid in 2021-2022 and later income years.
Proposal announced
Schedule 1 to the Bill fully implements the Cyclone Seroja - tax treatment of
qualifying grants measure from the 2021-22 MYEFO.
Financial impact
Schedule 1 to the Bill is expected to have no impact on receipts over the forward
estimates period.
Human rights implications
Schedule 1 to the Bill does not raise any human rights issues. See Statement of
Compatibility with Human Rights -- Chapter 5.
Compliance cost impact
Schedule 1 to the Bill is unlikely to have more than a minor regulatory impact.
1
General outline and financial impact
Schedule 2 - Transitional provisions relating to
the repeal of the Superannuation (Resolution of
Complaints) Act 1993
Outline
Schedule 2 to the Bill amends the AFCA Act to facilitate the closure and any
transitional arrangements associated with AFCA replacing the SCT.
Schedule 2 to the Bill provides for the transfer of records and documents from the SCT
to ASIC, the remittal of matters on appeal by the Federal Court, and introduces a rule-
making power to allow the Minister to prescribe other matters of a transitional nature.
Date of effect
Schedule 2 to the Bill will come into effect the day after Royal Assent.
Proposal announced
Schedule 2 to the Bill partially implements the measure Superannuation Complaints
Tribunal--completion of casework from the 2019-20 Budget.
Financial impact
Nil.
Human rights implications:
Schedule 2 to the Bill does not raise any human rights issues. See Statement of
Compatibility with Human Rights -- Chapter 5.
Compliance cost impact
The estimated compliance costs impact for the specific measures contained in
Schedule 2 to the Bill are nil.
Summary of regulation impact statement
The Ramsay Review1 has been certified as being informed by a process and analysis
1
Details of the Ramsay Review and the final report are available at:
https://treasury.gov.au/review/review-into-dispute-resolution-and-complaints-framework/
2
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
equivalent to a Regulation Impact Statement.2
Impact
The package of reforms to the external dispute resolution framework in response to the
Ramsay Review, including the measures enacted through the AFCA Act, are estimated
to have a compliance cost impact of $43.85 million each year. The estimated
compliance costs impact for the specific measures contained in Schedule 2 to the Bill
are nil.
Main points
• The Government has been informed of the regulatory impacts of
various reform options by the Ramsay Review. The Ramsay Review
was commissioned by the Government in May 2016 and led by an
expert panel, chaired by Professor Ian Ramsay.
• Extensive consultation with both industry and consumer stakeholders
was undertaken as part of the Ramsay Review.
• The review panel found that the framework that existed at the time was
a product of history rather than design and that reform is needed. The
panel identified that the existence of multiple external dispute
resolution schemes with overlapping jurisdictions means that:
- it is difficult to achieve comparable outcomes for
consumers with similar complaints;
- it is more difficult for consumers to progress disputes
involving firms that are members of different schemes;
and
- there is an increased risk of consumer confusion.
• Alternative reform options were considered and included having
targeted reforms to the SCT and establishing a statutory tribunal.
• The review found that the dispute resolution arrangements for
superannuation were not effective and that superannuation disputes
should be resolved by an ombudsman scheme, rather than a statutory
tribunal (such as the SCT).
• A Regulation Impact Statement is at Attachment 1.
2
Details of the certification process are available at: https://obpr.pmc.gov.au/published-impact-
analyses-and-reports/new-financial-sector-dispute-resolution-and-complaints
3
General outline and financial impact
Schedule 3 - Income tax and withholding
exemptions for the FIFA Women's World Cup
Outline
Schedule 3 to the Bill amends the ITAA 1997 and the ITAA 1936 to provide income
tax and withholding tax exemptions for FIFA and its wholly owned subsidiary
FWWC2023 Pty Ltd for activities associated with delivering the 2023 FIFA Women's
World Cup.
Date of effect
1 July 2020 to 31 December 2028 inclusive.
Proposal announced
Schedule 3 to the Bill implements the measure FIFA 2023 Women's World Cup -
income tax exemptions for FIFA and host entity from the 2021-22 MYEFO.
Financial impact
The amendments in Schedule 3 to the Bill are estimated to result in an unquantifiable
decrease in receipts over the forward estimates period.
Human rights implications
Schedule 3 to the Bill does not raise any human rights issues. See Statement of
Compatibility with Human Rights -- Chapter 5.
Compliance cost impact
Low.
Schedule 4 - Minor and technical amendments
Outline
Schedule 4 to the Bill makes minor and technical amendments to various laws in the
Treasury, Social Services and Veterans' Affairs portfolios.
4
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Date of effect
Part 1 of Schedule 4 to the Bill commences on 21 June 2022.
Part 2 of Schedule 4 to the Bill commences on the day after the Bill receives Royal
Assent.
Part 3 of Schedule 4 to the Bill commences at the start of the first quarter occurring
after Royal Assent.
Part 4 of Schedule 4 to the Bill commences the day after this Bill receives Royal
Assent.
Part 5 of Schedule 4 to the Bill commences from 5 April 2022.
Proposal announced
Schedule 4 to the Bill fully implements the miscellaneous and technical amendments
measure announced on 9 February 2022.
Financial impact
The financial impact is unquantifiable but expected to be small.
Human rights implications
Schedule 4 to the Bill raises human rights issues. See Statement of Compatibility with
Human Rights -- Chapter 5.
Compliance cost impact
Schedule 4 to the Bill has no compliance cost impact.
5
Recovery grants for
Cyclone Seroja
Table of Contents:
Outline of chapter .................................................................................. 7
Context of amendments ......................................................................... 7
Comparison of key features of new law and current law ........................ 8
Detailed explanation of new law ............................................................ 8
Commencement, application, and transitional provisions ...................... 9
Outline of chapter
1.1 Schedule 1 to the Bill amends the ITAA 1997 to provide further support for
small businesses and primary producers impacted by Cyclone Seroja in
April 2021. The Schedule makes grants received in relation to Cyclone Seroja
under Category C of the Disaster Recovery Funding Arrangements 2018
non-assessable and non-exempt income for income tax purposes.
Context of amendments
1.2 Grant payments made to businesses are generally assessable income for
income tax purposes. However, certain grant payments related to natural
disasters have been made exempt or non-assessable non-exempt income under
Divisions 51, 52 and 59 of the ITAA 1997. These include payments for
disaster recovery assistance in relation to the 2020 bushfires, Cyclone Yasi and
the 2019 floods.
1.3 In the 2021-2022 MYEFO, the then Government committed to making certain
grants related to Cyclone Seroja non-assessable and non-exempt income for
income tax purposes. This effectively increases the value of these grants for
small businesses and primary producers recovering from the impacts of
Cyclone Seroja.
7
Recovery grants for Cyclone Seroja
Comparison of key features of new law and
current law
Table 1.1 Comparison of new law and current law
New law Current law
Grants provided under Category C of the Grants provided under Category C of the
Disaster Recovery Funding Disaster Recovery Funding
Arrangements 2018 to small businesses, Arrangements 2018 to small businesses, and
and primary producers with a farm primary producers with a farm enterprise of
enterprise of any size, that were affected by any size, that were affected by Cyclone
Cyclone Seroja are non-assessable and non- Seroja are assessable as income for income
exempt income for income tax purposes, tax purposes.
meaning that they are not subject to income
tax.
Detailed explanation of new law
1.4 Schedule 1 to the Bill amends the ITAA 1997 to provide that a payment is not
assessable income or exempt income for income tax purposes if:
• for the purposes of the Disaster Recovery Funding Arrangements 2018,
the payment is a recovery grant paid to a small business or primary
producer as part of a Category C measure; and
• it relates to Cyclone Seroja.
[Schedule 1, item 2, section 59-105 of the ITAA 1997]
1.5 Schedule 1 to the Bill does not change the tax treatment for other assistance
payments related to Cyclone Seroja, such as the payment of a Disaster
Recovery Allowance within the meaning of the Social Security Act 1991. It
does not change the tax treatment of any payments made to individuals,
households, not-for-profits, or other entities that do not meet the definition of a
small business or primary producer as defined in the Disaster Recovery
Funding Arrangements 2018.
[Schedule 1, item 2, section 59-105 of the ITAA 1997]
1.6 Cyclone Seroja impacted Australia in April 2021 and is sometimes referred to
as Tropical Cyclone Seroja or Severe Tropical Cyclone Seroja.
[Schedule 1, item 2, section 59-105 of the ITAA 1997]
Schedule 1 to the Bill also updates the index in section 11-55 of the
ITAA 1997 to refer to relevant Cyclone Seroja recovery grants as a type of
non-assessable non-exempt income.
[Schedule 1, item 1, section 11-55 of the ITAA 1997]
8
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Commencement, application, and transitional
provisions
1.7 The amendments made by Schedule 1 to the Bill apply to assessments for the
2021-2022 income year and later income years. No relevant grants were paid
in the 2020-2021 income year. Under the relevant grant guidelines,
applications for claims close on 31 March 2023 and clean up and recovery
activities after 30 June 2023 are not eligible for reimbursement.
9
Transitional provisions
relating to the repeal of the
Superannuation (Resolution of
Complaints) Act 1993
Table of Contents:
Outline of chapter ................................................................................ 11
Context of amendments ....................................................................... 12
Summary of new law............................................................................ 12
Comparison of key features of new law and current law ...................... 13
Detailed explanation of new law .......................................................... 13
Transfer of records and documents to ASIC ................................. 13
Protected information .................................................................... 15
Federal Court power...................................................................... 15
Transitional Rules.......................................................................... 16
Application and transitional provisions ................................................. 17
Outline of chapter
2.1 Schedule 2 to the Bill amends the AFCA Act to facilitate the closure and any
transitional arrangements associated with AFCA replacing the SCT.
2.2 Schedule 2 to the Bill amends the AFCA Act to provide for the transfer of
records and documents from the SCT to ASIC, includes an express power for
the Federal Court to remit cases back to AFCA instead of the SCT, and
introduces a rule-making power to allow the Minister to prescribe other matters
of a transitional nature.
11
Transitional provisions relating to the repeal of the Superannuation (Resolution of Complaints)
Act 1993
Context of amendments
2.3 The SCT is a statutory tribunal established under the Superannuation
Complaints Act which considers complaints about superannuation.
2.4 In 2017, the Ramsay Review found that the existence of multiple financial
services external dispute resolution schemes with overlapping jurisdictions
means resulted in difficulties in achieving comparable outcomes for consumers
with similar complaints. The Ramsay Review also found long-standing
problems with the arrangements for resolving superannuation complaints in the
SCT.
2.5 In the Government's response to the Ramsay Review, the Government
announced the creation of a new framework for dispute resolution with a 'one
stop shop' external dispute resolution scheme which will be known as AFCA.
The purpose is to improve outcomes for consumers in the financial system.
2.6 With the introduction of the AFCA Act, AFCA replaced the SCT, as well as
other bodies such as the Financial Ombudsman Service, and the Credit and
Investments Ombudsman. Since 1 November 2018, AFCA has been the
external dispute resolution body for complaints against financial firms, as well
as superannuation disputes. It is a company limited by guarantee. The AFCA
Act received Royal Assent on 5 March 2018.
2.7 Under Schedule 3 to the AFCA Act, the Superannuation Complaints Act was
repealed on 5 March 2022.
2.8 In the 2019-20 Budget, the Government announced it would provide an
additional $2.3 million over three years from 2020-21 to ASIC for the SCT to
resolve outstanding complaints by 31 December 2020, after which the SCT
ceased operations. This funding would also assist ASIC with any other
administrative requirements needed to facilitate the wind down of the SCT.
Summary of new law
2.9 Schedule 2 to the Bill amends the AFCA Act to assist in the closure of the SCT
and to efficiently facilitate any transitional arrangements associated with
moving the handling of superannuation complaints from the SCT to AFCA.
2.10 Schedule 2 to the Bill amends the AFCA Act to insert a provision dealing with
the transfer of records and documents from the SCT to ASIC. These records
and documents are taken to be protected information for the purposes of
section 127 of the ASIC Act.
2.11 Schedule 2 to the Bill also includes a power for the Federal Court to remit
cases back to AFCA, where ordinarily, these would be remitted to the SCT
12
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
2.12 Schedule 2 to the Bill also introduces a rule-making power to the AFCA Act to
allow the Minister to prescribe matters of a transitional nature.
Comparison of key features of new law and
current law
Table 2.1 Comparison of new law and current law
New law Current law
The AFCA Act includes a rule-making No equivalent.
power for prescribing matters of a
transitional nature relating to the closure of
the SCT.
Records and document previously held by No equivalent.
the SCT are transferred to ASIC. Such
records and documents are protected
information.
In making an appeal determination, the No equivalent.
Federal Court may remit cases back to
AFCA to remake a decision, where
originally, these would be remitted back to
the SCT.
Detailed explanation of new law
2.13 Schedule 2 to the Bill amends the AFCA Act to assist in the closure of the SCT
and to efficiently facilitate any transitional arrangements associated with
moving the handling of superannuation complaints from the SCT to AFCA.
Transfer of records and documents to ASIC
2.14 The repeal of the Superannuation Complaints Act occurred on 5 March 2022..
2.15 ASIC becomes the administrator of any document in possession of the SCT at
the time of closure.
[Schedule 2, item 2, subsection 33(2) of Schedule 3 to the AFCA Act]
2.16 In their role as administrator, ASIC will respond to any freedom of information
requests, as well as prepare and disclose relevant documents to AFCA or the
Federal Court where necessary for the purposes of AFCA or the Federal Court
undertaking their functions.
13
Transitional provisions relating to the repeal of the Superannuation (Resolution of Complaints)
Act 1993
2.17 Under the Superannuation Complaints Act, a party may appeal to the Federal
Court on questions of law from a determinations made by the SCT. Disclosure
to the Federal Court from ASIC will be in the course of this appeal process.
Where the request for information would have previously gone to the SCT, it
will now be directed to ASIC for information regarding that original
determination.
2.18 In disclosing this information, ASIC must comply with the principles
contained in the Privacy Act 1988 and section 127 of the ASIC Act. Under this
section, disclosure to AFCA and the Federal Court for the purposes of their
role and function is considered to be an 'authorised disclosure.'
2.19 In practice, the transfer of records or documents will not include the physical
transfer of documents from the SCT to ASIC. These documents are already
physically held by ASIC as the SCT is staffed by members of the staff of ASIC
who have been made available to the SCT under former section 62 of the
Superannuation Complaints Act. The systems and storage used by the SCT for
their documents and records are the same systems and storage as ASIC.
Therefore, the existence of these provisions are operational for ASIC to be
transferred legal responsibility of these documents or records following the
closure of the SCT.
2.20 This applies to any record or document that was in the SCT's possession
immediately before the closure of the SCT. Possession applies broadly to
include any:
• member of the SCT; or
• member of the staff of ASIC who had been made available to the SCT
under section 62 of the Superannuation Complaints Act.
[Schedule 2, item 2, subsection 33(1) of Schedule 3 to the AFCA Act]
2.21 In considering what information is to be transferred to ASIC, the phrase
'records or documents' is an intentionally broad phrase to capture all electronic
and physical documents currently held by the SCT. These may include
historical documents. However, nothing in the transfer of document is intended
to amount to disclosure for the purposes of waiving legal professional
privilege.
2.22 The words 'record' and 'document' are defined in section 25 of the Acts
Interpretation Act 1901.
2.23 Record is defined to include information stored or recorded by means of a
computer.
2.24 Document is defined in as any record of information, and includes:
• anything on which there is writing; and
• anything on which there are marks, figures, symbols or perforations
having a meaning for persons qualified to interpret them; and
14
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
• anything from which sounds, images or writings can be reproduced
with or without the aid of anything else; and
• a map, plan, drawing or photograph.
2.25 Despite the transfer, these documents or records continue to be Commonwealth
records for the purposes of the Archives Act 1983. Therefore, following the
transfer, ASIC will have responsibility for the disposal and archiving of these
documents in line with their responsibilities under the Archives Act 1983. This
position is clarified in the note to section 33 of Schedule 2 to the Bill.
Protected information
2.26 Schedule 2 to the Bill ensures that the transferred records or documents will be
considered 'protected information' for the purposes of section 127 of the ASIC
Act.
[Schedule 2, item 2, subsection 33(3) of Schedule 3 to the AFCA Act]
2.27 This provision safeguards against any unauthorised disclosure of sensitive and
personal information that may be contained in the transferred documents and
records. These safeguards reflect the privacy and confidentiality provisions
contained in the Superannuation Complaints Act which prohibit disclosure of
sensitive information.
2.28 Section 127 of the ASIC Act requires that ASIC will take all reasonable
measures to protect information that has been classified as 'protected
information' from unauthorised use or disclosure. Disclosure to the Federal
Court and AFCA are considered to be an 'authorised disclosure'.
2.29 However, a document or record that has already been lawfully made available
to the public will not be covered by section 127 of the ASIC Act.
[Schedule 2, item 2, subsection 33(3) of Schedule 3 to the AFCA Act]
2.30 The effect of this is that a document that is already public (such as an annual
report) will not have the same confidentiality requirements as personal or
sensitive information.
Federal Court power
2.31 Schedule 2 to the Bill includes an express provision for appeals of SCT
determinations to the Federal Court following the repeal of the Superannuation
Complaints Act.
[Schedule 2, item 2, subsection 34(1) of Schedule 3 to the AFCA Act]
2.32 Under the Superannuation Complaints Act, a party may appeal to the Federal
Court on questions of law from a determination made by the SCT. The Federal
Court may hear and determine the appeal and make an order as it thinks
15
Transitional provisions relating to the repeal of the Superannuation (Resolution of Complaints)
Act 1993
appropriate. The same appeal process is available for determinations made by
AFCA under the AFCA Act.
2.33 The orders that may be made by the Federal Court on an appeal include an
order affirming or setting aside the determination of the SCT or an order
remitting the matter to be determined again by the SCT in accordance with the
directions of the Federal Court.
2.34 Without limiting the powers of the Federal Court, the provision provides that
the Federal Court may make an order remitting the matter back to AFCA
where this would have ordinarily been remitted back to the SCT. The
determination will then be made by AFCA in accordance with the directions of
the Federal Court.
[Schedule 2, item 2, subsection 34(2) of Schedule 3 to the AFCA Act]
Transitional Rules
2.35 Schedule 2 to the Bill provides that the Minister may, by legislative
instrument, make rules of a transitional nature (including prescribing any
saving or application provisions) relating to the repeal included in Schedule 3
to the AFCA Act.
[Schedule 2, item 2, subsection 35(1) of Schedule 3 to the AFCA Act]
2.36 A broad rule-making power provides flexibility for the Government to address
any additional issues that emerge to accommodate the closing of the SCT, and
the repeal of the Superannuation Complaints Act.
2.37 The rules will provide for transitional issues such as providing appropriate
operational requirements that will assist AFCA with the handling of the SCT
cases and may provide further specificity of ASIC's role as administrator
following the closure of the SCT.
2.38 Any such rules would be a legislative instrument under section 8 of the
Legislation Act. Therefore, these rules will be subject to the disallowance
process which will allow for appropriate parliamentary oversight and scrutiny
(section 42 of the Legislation Act). The rules will also be subject to sunsetting
(section 50 of the Legislation Act).
2.39 To avoid doubt, the rules may not do the following:
• create an offence or civil penalty;
• provide powers of:
- arrest or detention; or
- entry, search or seizure;
• impose a tax;
16
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
• set an amount to be appropriated from the Consolidated Revenue Fund
under an appropriation the AFCA Act;
• directly amend the text of the AFCA Act.
[Schedule 2, item 2, subsection 35(2) of Schedule 3 to the AFCA Act]
Application and transitional provisions
2.40 The transitional measures in Schedule 2 to the Bill commence on the day after
the Bill receives Royal Assent.
17
Income tax and
withholding exemptions for the FIFA
Women's World Cup
Table of Contents:
Outline of chapter ................................................................................ 19
Context of amendments ....................................................................... 19
Summary of new law............................................................................ 20
Detailed explanation of new law .......................................................... 20
Outline of chapter
3.1 Schedule 3 to the Bill amends the ITAA 1997 and the ITAA 1936 to provide
income tax and withholding tax exemptions for FIFA and its wholly owned
subsidiary associated with delivering the 2023 FIFA Women's World Cup.
Context of amendments
3.2 As part of Australia's bid to co-host the 2023 FIFA Women's World Cup,
FIFA and a locally established Australian subsidiary (FWWC2023 Pty Ltd)
were provided with certain tax exemptions for activities associated with the
2023 FIFA Women's World Cup.
3.3 Section 50-45 of the ITAA 1997 provides income tax exemptions for entities in
the sporting, cultural, film and recreational fields. This section supports the
encouragement and development of sport, culture, film, and recreation in
Australia.
3.4 Prior to these amendments, FIFA and its wholly owned subsidiary were not
entitled to income tax exempt status in Australia.
3.5 The income and withholding tax exemptions provided in the Bill are consistent
with and informed by the precedent set by the tax exemptions provided to the
International Cricket Council for the T20 World Cup under section 50-45 of
the ITAA 1997.
19
Income tax and withholding exemptions for the FIFA Women's World Cup
Summary of new law
3.6 The Bill provides income tax and withholding exemptions for FIFA and
FWWC2023 Pty Ltd for a specific period to support the hosting and delivery
of the 2023 FIFA Women's World Cup.
3.7 This is achieved by amending the ITAA 1997 and the ITAA 1936.
Detailed explanation of new law
3.8 The Bill amends the ITAA 1936 to provide an exemption from withholding tax
for FIFA and FWWC2023 Pty Ltd.
[Schedule 3, item 1, section 128B(3)(a)(i) of the ITAA 1936]
3.9 The Bill amends the ITAA 1997 to add FIFA and FWWC2023 Pty Ltd to the
table that lists tax-exempt entities in the tax law.
[Schedule 3, item 2, (table item headed "sports, culture or recreation") of
section 11(5) of the ITAA 1997]
3.10 The income tax exemption applies for a fixed period, which is linked to
undertaking and delivering the 2023 FIFA Women's World Cup.
[Schedule 3, item 3, section 50-45 of the ITAA 1997]
3.11 The effect of the Bill is that FIFA and FWWC2023 Pty Ltd are exempt from
paying tax on ordinary or statutory income from 1 July 2020 to
31 December 2028 inclusive, provided their income (ordinary or statutory)
relates to the 2023 FIFA Women's World Cup.
[Schedule 3, item 3, section 50-45 of the ITAA 1997]
20
Minor and technical
amendments
Table of Contents:
Outline of chapter ................................................................................ 21
Context of amendments ....................................................................... 21
Summary of new law............................................................................ 22
Detailed explanation of new law .......................................................... 22
Parts 1 and 2 - Registries modernisation amendments ................. 22
Part 3 - Amendments commencing first day of next quarter .......... 36
Part 4 - Other amendments ........................................................... 37
Part 5 - Amendments of Acts in other portfolios to allow
commutation of certain income streams ........................................ 40
Commencement, application, and transitional provisions .................... 43
Commencement ............................................................................ 43
Application..................................................................................... 43
Outline of chapter
4.1 Schedule 4 to the Bill makes minor and technical amendments to various laws
in the Treasury, Social Services and Veterans' Affairs portfolios.
4.2 The amendments make minor and technical changes to address unintended
outcomes and ensure that the law gives effect to the original policy intent.
Context of amendments
4.3 Minor and technical amendments are periodically made to Treasury legislation
to remove anomalies, correct unintended outcomes, and generally improve the
quality of laws. Making such amendments gives priority to the care and
maintenance of Treasury portfolio legislation.
21
Minor and technical amendments
4.4 The process was first supported by a recommendation of the 2008 Tax Design
Review Panel, which was appointed to examine how to reduce delays in the
enactment of tax legislation and improve the quality of tax law changes. It has
since been expanded to all Treasury portfolio legislation.
4.5 Schedule 4 to the Bill also makes consequential amendments to social security
and veterans' affairs portfolio laws that affect Treasury portfolio legislation.
Summary of new law
4.6 The minor and technical amendments address technical deficiencies and
legislative uncertainty in various Treasury laws by:
• addressing unintended outcomes;
• correcting typographical errors;
• fixing incorrect legislative references; and
• enhancing readability and administrative efficiency.
Detailed explanation of new law
Parts 1 and 2 - Registries modernisation amendments
4.7 The Government is implementing the Modernising Business Registers program
which seeks to establish a modern government regulatory regime that is
flexible, technology neutral and governance neutral.
4.8 The primary focus of the amendments to various Acts that implement the
program is to delay the automatic commencement of those Acts until the
systems supporting the program are ready.
Amendment to the Business Names Registration (Fees) Amendment
(Registries Modernisation) Act 2020
Retrospective delay to automatic commencement
4.9 Schedule 4 to the Bill retrospectively delays the automatic commencement of
Schedule 1 to the Business Names Registration (Fees) Amendment (Registries
Modernisation) Act 2020 from 22 June 2022 until 1 July 2026 or an earlier date
if specified by Proclamation. The effect of this change is that the delay to the
commencement date happened on 21 June 2022. This prevents automatic
commencement before IT systems supporting the Modernising Business
Registers Program are ready.
22
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
[Schedule 4, item 1, section 2 of the Business Names Registration (Fees)
Amendment (Registries Modernisation) Act 2020]
4.10 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.11 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.12 The retrospective change is necessary to ensure that Schedule 1 to the Business
Names Registration (Fees) Amendment (Registries Modernisation) Act 2020
does not operate to require persons and companies to take actions that are not
yet supported by the IT systems between 22 June 2022 and until the date they
are ready. This change does not adversely impact on the rights of any entity.
4.13 This amendment commences on 21 June 2022.
Transitional provision - validation
4.14 The validation provision validates actions taken in the interim period (between
22 June 2022 and the day before the amendments in Part 2 of Schedule 4 to the
Bill take effect) which are in accordance with the law of 21 June 2022. The
effect of these amendments is to preserve existing registry arrangements as at
21 June 2022, and validate actions taken in accordance with the law during the
interim period.
[Schedule 4, item 11, section 2 of the Business Names Registration (Fees)
Amendment (Registries Modernisation) Act 2020]
4.15 This provision is necessary to remove doubt that the law as of 21 June 2022
applied throughout the interim period. This unwinds the effect of the automatic
commencement of the postponed items under the various Acts supporting the
Modernising Business Registers Program.
4.16 These amendments commence on the day after the Bill receives Royal Assent.
Application provision
4.17 Schedule 4 to the Bill also inserts an application provision into the Business
Names Registration (Fees) Amendment (Registries Modernisation) Act 2020
which allows the application day of item 1 of Schedule 1 to the Business
Names Registration (Fees) Amendment (Registries Modernisation) Act 2020 to
be specified by a notifiable instrument. However, if an instrument specifying
an application day is not made, the item applies from 1 July 2026.
4.18 The notifiable instrument may specify a single application day generally or a
day in relation to some matter (and possibly other days in relation to other
matters). This allows a differentiated application in relation to matters in
different tranches of the Modernising Business Registers Program.
23
Minor and technical amendments
4.19 The effect of a differentiated application is that the amendment made by item 1
of Schedule 1 to the Business Names Registration (Fees) Amendment
(Registries Modernisation) Act 2020 will apply only in relation to the matters
specified in a notifiable instrument after the day specified in the notifiable
instrument. The provision amended by this item as in force immediately before
the commencement of these amendments will continue to apply until 1 July
2026 in relation to other matters (or until an earlier date if specified in a
notifiable instrument). This allows the application of amendments made by this
item to align with the roll out of IT systems even if matters affected by the item
are in different tranches of the Modernising Business Registers Program.
[Schedule 4, item 11, section 3 of the Business Names Registration (Fees)
Amendment (Registries Modernisation) Act 2020]
4.20 These amendments commence on the day after the Act receives Royal Assent.
Amendment to the Corporations (Fees) Amendment (Registries
Modernisation) Act 2020
Retrospective delay to automatic commencement
4.21 Schedule 4 to the Bill retrospectively delays the automatic commencement of
Schedule 1 to the Corporations (Fees) Amendment (Registries Modernisation)
Act 2020 from 22 June 2022 until 1 July 2026 or an earlier date if specified by
Proclamation. The effect of this change is that the delay to the commencement
date happened on 21 June 2022. This prevents automatic commencement
before IT systems supporting the Modernising Business Registers Program are
ready.
[Schedule 4, item 2, section 2 of the Corporations (Fees) Amendment
(Registries Modernisation) Act 2020]
4.22 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.23 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.24 The retrospective change is necessary to ensure that Schedule 1 to the
Corporations (Fees) Amendment (Registries Modernisation) Act 2020 does not
operate to require persons and companies to take actions that are not yet
supported by the IT systems between 22 June 2022 and until the date they are
ready. This change does not adversely impact on the rights of any entity.
4.25 This amendment commences on 21 June 2022.
24
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Amendment to the Financial Sector Reform (Hayne Royal Commission
Response--Better Advice) Act 2021
Retrospective delay to automatic commencement
4.26 Schedule 4 to the Bill retrospectively amends the commencement of Part 3 of
Schedule 1 to the Financial Sector Reform (Hayne Royal Commission
Response--Better Advice) Act 2021 to commence on 1 July 2026 or an earlier
date if specified by Proclamation (instead of 22 June 2022). The effect of this
change is that the delay to the commencement date happened on 21 June 2022.
4.27 This unlinks the commencement of Part 3 of Schedule 1 to the Financial
Sector Reform (Hayne Royal Commission Response--Better Advice) Act 2021
from the commencement of item 1150 of Schedule 1 to the Treasury Laws
Amendment (Registries Modernisation and Other Measures) Act 2020 and
prevents potential automatic commencement before IT systems supporting the
Modernising Business Registers Program are ready.
4.28 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.29 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.30 The retrospective change is necessary to ensure that Part 3 of Schedule 1 to the
Financial Sector Reform (Hayne Royal Commission Response--Better Advice)
Act 2021 does not operate to require persons and companies to take actions that
are not yet supported by the IT systems between 22 June 2022 and until the
date they are ready. This change does not adversely impact on the rights of any
entity.
4.31 Schedule 4 to the Bill also amends the commencement of Schedule 2 to the
Financial Sector Reform (Hayne Royal Commission Response--Better Advice)
Act 2021 to commence on a day or days to be fixed by Proclamation, or on
28 October 2025 if an earlier date is not fixed. This flexible approach to
commencement is necessary to allow the timing of commencement to align
with the time when IT systems supporting the Modernising Business Registers
Program are ready.
[Schedule 4, item 3, section 2 of the Financial Sector Reform (Hayne Royal
Commission Response - Better Advice) Act 2021]
4.32 These amendments commence on 21 June 2022.
25
Minor and technical amendments
Amendment to the National Consumer Credit Protection (Fees)
Amendment (Registries Modernisation) Act 2020
Retrospective delay to automatic commencement
4.33 Schedule 4 to the Bill retrospectively delays the automatic commencement of
Schedule 1 to the National Consumer Credit Protection (Fees) Amendment
(Registries Modernisation) Act 2020 from 22 June 2022 until 1 July 2026 or an
earlier date if specified by Proclamation. The effect of this change is that the
delay to the commencement date happened on 21 June 2022. This prevents
automatic commencement before IT systems supporting the Modernising
Business Registers Program are ready.
[Schedule 4, item 4, section 2 of the National Consumer Credit Protection
(Fees) Amendment (Registries Modernisation) Act 2020]
4.34 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.35 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.36 The retrospective change is necessary to ensure that Schedule 1 to the National
Consumer Credit Protection (Fees) Amendment (Registries Modernisation) Act
2020 does not operate to require persons and companies to take actions that are
not yet supported by the IT systems between 22 June 2022 and until the date
they are ready. This change does not adversely impact on the rights of any
entity.
4.37 This amendment commences on 21 June 2022.
Amendment to the Treasury Laws Amendment (2021 Measures No. 1)
Act 2021
Retrospective delay to automatic commencement
4.38 Schedule 4 to the Bill retrospectively amends the commencement of Part 4 of
Schedule 2 to the Treasury Laws Amendment (2021 Measures No. 1) Act 2021
to be on a day or days to be fixed by Proclamation or on 1 July 2026 if an
earlier date is not fixed (instead of 22 June 2022). The effect of this change is
that the delay to the commencement date happened on 21 June 2022. This
prevents commencement before IT systems supporting the Modernising
Business Registers Program are ready.
[Schedule 4, item 5, section 2 of the Treasury Laws Amendment (2021
Measures No. 1) Act 2021]
26
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
4.39 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.40 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.41 The retrospective change is necessary to ensure that Part 4 of Schedule 2 to the
Treasury Laws Amendment (2021 Measures No. 1) Act 2021 does not operate
to require persons and companies to take actions that are not yet supported by
the IT systems between 22 June 2022 and until the date they are ready. This
change does not adversely impact on the rights of any entity.
4.42 This amendment commences on 21 June 2022.
Amendment to the Treasury Laws Amendment (Registries Modernisation
and Other Measures) Act 2020
Retrospective delay to automatic commencement
4.43 Schedule 4 to the Bill retrospectively amends the commencement of items 1 to
1258 and items 1262 to 1467 of Schedule 1 to the Treasury Laws Amendment
(Registries Modernisation and Other Measures) Act 2020 to be on a day or
days to be fixed by Proclamation or on 1 July 2026 if an earlier date is not
fixed (instead of 22 June 2022). The effect of this change is that the delay to
the commencement date happened on 21 June 2022. This prevents
commencement before IT systems supporting the Modernising Business
Registers Program are ready.
[Schedule 4, items 6 and 7, section 2 of the Treasury Laws Amendment
(Registries Modernisation and Other Measures) Act 2020]
4.44 The previous automatic commencement date of 22 June 2022 was based on
information known at the time and prior to detailed design work being
completed to support the build of IT systems to deliver the Modernising
Business Registers Program.
4.45 It was not possible to complete the build of these systems by 22 June 2022 and
the delay of the automatic commencement date to 1 July 2026 is intended to
allow sufficient time so that the supporting legislation aligns with the IT
delivery schedule.
4.46 The retrospective change is necessary to ensure that Part 4 of Schedule 2 to the
Treasury Laws Amendment (2021 Measures No. 1) Act 2021 does not operate
to require persons and companies to take actions that are not yet supported by
the IT systems between 22 June 2022 and until the date they are ready. This
change does not adversely impact on the rights of any entity.
27
Minor and technical amendments
4.47 Items 359, 1315, and 1414 of Schedule 1 to the Treasury Laws Amendment
(Registries Modernisation and Other Measures) Act 2020 are repealed. Those
items would have inserted application and transitional provisions relating to the
Treasury Laws Amendment (Registries Modernisation and Other Measures)
Act 2020 into the Business Names Registration (Transitional and
Consequential Provisions) Act 2011, the Corporations Act 2001, and the
National Consumer Credit Protection (Transitional and Consequential
Provisions) Act 2009. Part 2 of the present amendments provides replacement
application and transitional provisions.
[Schedule 4, item 8]
4.48 The above amendments to section 2 do not affect the commencement of any
items of Schedule 1 to the Treasury Laws Amendment (Registries
Modernisation and Other Measures) Act 2020 that commenced before the
commencement of this amendment.
[Schedule 4, item 9]
4.49 These amendments commence on 21 June 2022.
Transitional provision - validation and continuation of delegations
4.50 The validation provision validates actions taken in the interim period (between
22 June 2022 and the day before the amendments in Part 2 of Schedule 4 to the
Bill take effect) which are in accordance with the law of 21 June 2022. The
provision also preserves delegations which are in force on 21 June 2022 and
any act done by the delegate in the interim period pursuant to that delegation.
The effect of these amendments is to preserve existing registry arrangements as
at 21 June 2022, and validate actions taken in accordance with the law and
delegations during the interim period.
[Schedule 4, item 15, items 1465 and 1466 of Schedule 1 to the Treasury
Laws Amendment (Registries Modernisation and Other Measures) Act 2020]
4.51 This provision is necessary to remove doubt that the law and delegations as of
21 June 2022 applied throughout the interim period. This unwinds the effect of
the automatic commencement of the postponed items under the various Acts
supporting the Modernising Business Registers Program.
4.52 For example, the corporate collective investment vehicle regulatory and tax
framework applies from 1 July 2022 during the interim period. If during the
interim period, actions were taken to provide some form of registration for a
corporate collective investment vehicle, those actions, in whatever capacity
they were done, would be treated as if the law as on 21 June 2022 applied, with
the validation provision explicitly validating those actions as though they did
happen under the 21 June 2022 law, and then as amended from 1 July 2022
(for the Corporate Collective Investment Vehicle Framework and Other
Measures Act 2022).
4.53 These amendments commence on the day after the Bill receives Royal Assent.
28
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Application provision
4.54 Schedule 4 to the Bill also inserts an application provision into the Treasury
Laws Amendment (Registries Modernisation and Other Measures) Act 2020
which allows the application days of items of Part 2 of Schedule 1 to the
Treasury Laws Amendment (Registries Modernisation and Other Measures)
Act 2020 to be specified by a notifiable instrument. However, if an instrument
specifying an application day is not made in relation to any items (or any
matters in relation to any items), the items apply from 1 July 2026.
4.55 The application provision can also apply to items to be specified by legislative
instrument to affect the application day for items in a Schedule to any Act that
amends any of the Acts listed below that deals with a matter related to a
government registry and commences after the interim period but before 1 July
2026:
• the A New Tax System (Australian Business Number) Act 1999;
• the A New Tax System (Goods and Services Tax) Act 1999;
• the Australian Prudential Regulation Authority Act 1998;
• the Income Tax Assessment Act 1997;
• the Superannuation Industry (Supervision) Act 1993;
• the Taxation Administration Act 1953;
4.56 These items are not affected by the validation and continuation of delegation
provisions.
4.57 The notifiable instrument may specify a single application day generally or a
day in relation to some matter for an amending item (and possibly other days in
relation to other matters). The notifiable instrument may apply to a single item
or a class of items described in the instrument. This allows a differentiated
application in relation to matters and items. The purpose of this approach is to
enable flexibility in the timing and scope of application of the amendments in
relation to matters in different tranches of the Modernising Business Registers
Program.
4.58 However, this flexibility remains bounded by the scope of the amending items
and their eventual automatic application (if not applied earlier). Any notifiable
instruments will only specify the dates on which the items necessary to support
a particular tranche of the Modernising Business Registers Program will apply
in relation to the matters covered by the IT roll out (such as the particular
registers being transferred from ASIC to the Registrar in that tranche).
4.59 The effect of a differentiated application is that the amendments made by items
of Part 2 of Schedule 1 to the Treasury Laws Amendment (Registries
Modernisation and Other Measures) Act 2020 or those to be specified by
legislative instrument will apply only in relation to the matters specified in a
notifiable instrument after the day specified in the notifiable instrument. The
29
Minor and technical amendments
provisions amended by these items as in force immediately before the
commencement of these amendments will continue to apply until 1 July 2026
in relation to other matters (or until an earlier date if specified in a notifiable
instrument). This allows the application of amendments made by these items to
align with the IT roll out even where particular items relate to matters in
different tranches of the Modernising Business Registers Program.
[Schedule 4, item 15, items 1465 and 1467 of Schedule 1 to the Treasury
Laws Amendment (Registries Modernisation and Other Measures) Act 2020]
4.60 Schedule 4 to the Bill also updates the provision that allows both ASIC and the
Registrar to complete actions begun by ASIC before the application of the
Registries Modernisation amendments. The provision is extended to
encompass actions commenced under provisions in Acts modified by the
Treasury Laws Amendment (Registries Modernisation and Other Measures)
Act 2020 that were not specified in the provision as originally drafted.
[Schedule 4, item 15, item 1468 of Schedule 1 to the Treasury Laws
Amendment (Registries Modernisation and Other Measures) Act 2020]
4.61 These amendments commence on the day after the Bill receives Royal Assent.
Amendment to the Australian Securities and Investments Commission
Act 2001
Transitional provision - validation and continuation of delegations
4.62 The validation provision validates actions taken in the interim period (between
22 June 2022 and the date the amendments in Part 2 of Schedule 4 to the Bill
take effect) which are in accordance with the law of 21 June 2022. The
provision also preserves delegations (including sub-delegations such as those
under section 110 of the Public Governance, Performance and Accountability
Act 2013) which are in force on 21 June 2022. The effect of these amendments
is to preserve existing registry arrangements as at 21 June 2022, and validate
actions taken in accordance with the law and delegations during the interim
period.
[Schedule 4, item 10, sections 337 and 338 of the Australian Securities and
Investment Commission Act 2001]
4.63 This provision is necessary to remove doubt that the law and delegations as of
21 June 2022 applied throughout the interim period. This unwinds the effect of
the automatic commencement of the postponed items under the various Acts
supporting the Modernising Business Registers Program.
4.64 These amendments commence on the day after the Bill receives Royal Assent.
Application provision of item 102 of Schedule 1 to the Treasury Laws Amendment
(Registries Modernisation and Other Measures) Act 2020
4.65 Schedule 4 to the Bill amends the application provision in the Australian
Securities and Investments Commission Act 2001 to allow the application days
of the amendment to section 12A made by item 102 of Schedule 1 to the
30
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Treasury Laws Amendment (Registries Modernisation and Other Measures)
Act 2020 to be specified by a notifiable instrument. However, if an instrument
specifying an application day is not made in relation to any items (or any
matters in relation to any items), the items apply from 1 July 2026.
4.66 The notifiable instrument may specify a single application day generally or a
day in relation to some matter for an amending item (and possibly other days in
relation to other matters). The notifiable instrument may apply to a single item
or a class of items described in the instrument. This allows a differentiated
application in relation to matters and items. The purpose of this approach is to
enable flexibility in the timing and scope of application of the amendments in
relation to matters in different tranches of the Modernising Business Registers
Program.
4.67 However, this flexibility remains bounded by the scope of the amending items
and their eventual automatic application (if not applied earlier). Any notifiable
instruments will only specify the dates on which the items necessary to support
a particular tranche of the Modernising Business Registers Program will apply
in relation to the matters covered by the IT roll out (such as the particular
registers being transferred from ASIC to the Registrar in that tranche).
4.68 The effect of a differentiated application is that the amendments made by item
102 of Part 1 of Schedule 1 to the Treasury Laws Amendment (Registries
Modernisation and Other Measures) Act 2020 will apply only in relation to the
matters specified in a notifiable instrument after the day specified in the
notifiable instrument. The provisions amended by these items as in force
immediately before the commencement of these amendments will continue to
apply until 1 July 2026 in relation to other matters (or until an earlier date if
specified in a notifiable instrument). This allows the application of
amendments made by these items to align with the IT roll out even where
particular items relate to matters in different tranches of the Modernising
Business Registers Program.
[Schedule 4, item 10, section 339 of Australian Securities and Investment
Commission Act 2001]
4.69 This amendment commences on the day after the Bill receives Royal Assent.
Amendment to the Business Names Registration (Transitional and
Consequential Provisions) Act 2011
Transitional provision - validation and continuation of delegations
4.70 The validation provision validates actions taken during the interim period
(between 22 June 2022 and the day before the amendments in Part 2 of
Schedule 4 to the Bill take effect) which are in accordance with the law of 21
June 2022. The provision also preserves delegations which are in force on 21
June 2022. The effect of these amendments is to preserve existing registry
arrangements as at 21 June 2022, and validate actions taken in accordance with
the law and delegations during the interim period.
31
Minor and technical amendments
[Schedule 4, item 12, items 1 and 2 of Schedule 4 to the Business Names
Registration (Transitional and Consequential Provisions) Act 2011]
4.71 This provision is necessary to remove doubt that the law and delegations as of
21 June 2022 applied throughout the interim period. This unwinds the effect of
the automatic commencement of the postponed items under the various Acts
supporting the Modernising Business Registers Program.
4.72 These amendments commence on the day after the Bill receives Royal Assent.
Application provision
4.73 Schedule 4 to the Bill amends the application provision in the Business Names
Registration (Transitional and Consequential Provisions) Act 2011 to allow
the application days of items of Part 2 of Schedule 1 to the Treasury Laws
Amendment (Registries Modernisation and Other Measures) Act 2020 to be
specified by a notifiable instrument. However, if an instrument specifying an
application day is not made in relation to any items (or any matters in relation
to any items), the items apply from 1 July 2026.
4.74 The notifiable instrument may specify a single application day generally or a
day in relation to some matter for an amending item (and possibly other days in
relation to other matters). The notifiable instrument may apply to a single item
or a class of items described in the instrument. This allows a differentiated
application in relation to matters and items. The purpose of this approach is to
enable flexibility in the timing and scope of application of the amendments in
relation to matters in different tranches of the Modernising Business Registers
Program.
4.75 However, this flexibility remains bounded by the scope of the amending items
and their eventual automatic application (if not applied earlier). Any notifiable
instruments will only specify the dates on which the items necessary to support
a particular tranche of the Modernising Business Registers Program will apply
in relation to the matters covered by the IT roll out (such as the particular
registers being transferred from ASIC to the Registrar in that tranche).
4.76 The effect of a differentiated application is that the amendments made by items
of Part 2 of Schedule 1 to the Treasury Laws Amendment (Registries
Modernisation and Other Measures) Act 2020 will apply only in relation to the
matters specified in a notifiable instrument after the day specified in the
notifiable instrument. The provisions amended by these items as in force
immediately before the commencement of these amendments will continue to
apply until 1 July 2026 in relation to other matters (or until an earlier date if
specified in a notifiable instrument). This allows the application of
amendments made by these items to align with the IT roll out even where
particular items relate to matters in different tranches of the Modernising
Business Registers Program.
[Schedule 4, item 12, items 1 and 3 of Schedule 4 to the Business Names
Registration (Transitional and Consequential Provisions) Act 2011]
32
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
4.77 Schedule 4 to the Bill also makes changes to other items in Schedule 4 of the
Business Names Registration (Transitional and Consequential Provisions)
Act 2011 which are necessary because of the amendments to the application
provision.
[Schedule 4, item 12, items 4 to 6 of Schedule 4 to the Business Names
Registration (Transitional and Consequential Provisions) Act 2011]
4.78 These amendments commence on the day after the Bill receives Royal Assent.
Amendment to the Corporations Act 2001
Transitional provision - validation and continuation of delegations
4.79 The validation provision validates actions taken during the interim period
(between 22 June 2022 and the day before the amendments in Part 2 of
Schedule 4 to the Bill take effect) which are in accordance with the law of 21
June 2022. The provision also preserves delegations which are in force on 21
June 2022. The effect of these amendments is to preserve existing registry
arrangements as at 21 June 2022, and validate actions taken in accordance with
the law and delegations during the interim period.
[Schedule 4, item 13, sections 1650 and 1650A of the Corporations Act 2001]
4.80 This provision is necessary to remove doubt that the law and delegations as of
21 June 2022 applied throughout the interim period. This unwinds the effect of
the automatic commencement of the postponed items under the various Acts
supporting the Modernising Business Registers Program.
4.81 For example, the corporate collective investment vehicle regulatory and tax
framework applies from 1 July 2022 during the interim period. If during the
interim period, actions were taken to provide some form of registration for a
corporate collective investment vehicle, those actions, in whatever capacity
they were done, would be treated as if the law as on 21 June 2022 applied, with
the validation provision explicitly validating those actions as though they did
happen under the 21 June 2022 law, and then as amended from 1 July 2022
(for the Corporate Collective Investment Vehicle Framework and Other
Measures Act 2022).
Application provision
4.82 Schedule 4 to the Bill amends an application provision in the Corporations
Act 2001 to allow the application days of the following items to be specified by
notifiable instrument:
• items of Part 2 of Schedule 1 to the Treasury Laws Amendment
(Registries Modernisation and Other Measures) Act 2020;
• items of Part 3 of Schedule 1, or of Schedule 2, to the Financial Sector
Reform (Hayne Royal Commission Response--Better Advice) Act
2021;
33
Minor and technical amendments
• items of Part 4 of Schedule 2 to the Treasury Laws Amendment
(2021 Measures No. 1) Act 2021; and
• items to be specified by legislative instrument which are in a Schedule
in any Act that amends the Corporations Act 2001 that deals with a
matter related to a government registry and commences after the
interim period but before 28 October 2025. These items are not
affected by the validation and continuation of delegation provisions.
4.83 However, if an instrument specifying an application day is not made in relation
to any items (or any matters in relation to any items), the items apply from 1
July 2026.
4.84 The notifiable instrument may specify a single application day generally or a
day in relation to some matter for an amending item (and possibly other days in
relation to other matters). The notifiable instrument may apply to a single item
or a class of items described in the instrument. This allows a differentiated
application in relation to matters and items. The purpose of this approach is to
enable flexibility in the timing and scope of application of the amendments in
relation to matters in different tranches of the Modernising Business Registers
Program.
4.85 However, this flexibility remains bounded by the scope of the amending items
and their eventual automatic application (if not applied earlier). Any notifiable
instruments will only specify the dates on which the items necessary to support
a particular tranche of the Modernising Business Registers Program will apply
in relation to the matters covered by the IT roll out (such as the particular
registers being transferred from ASIC to the Registrar in that tranche).
4.86 The effect of a differentiated application is that the amendments made by items
of Part 2 of Schedule 1 to the Treasury Laws Amendment (Registries
Modernisation and Other Measures) Act 2020, items of Part 3 of Schedule 1,
or of Schedule 2, to the Financial Sector Reform (Hayne Royal Commission
Response--Better Advice) Act 2021, and items of Part 4 of Schedule 2 to the
Treasury Laws Amendment (2021 Measures No. 1) Act 2021 will apply only in
relation to the matters specified in a notifiable instrument after the day
specified in the notifiable instrument. The provisions amended by these items
as in force immediately before the commencement of these amendments will
continue to apply until 1 July 2026 in relation to other matters (or until an
earlier date if specified in a notifiable instrument). This allows the application
of amendments made by these items to align with the IT roll out even where
particular items relate to matters in different tranches of the Modernising
Business Registers Program.
[Schedule 4, item 13, sections 1650 and 1650B of the Corporations Act 2001]
4.87 Schedule 4 to the Bill also makes changes to other sections in Part 10.35 of the
Corporations Act 2001 which are necessary because of the amendments to the
application provision.
[Schedule 4, item 13, sections 1650C & 1650D of the Corporations Act 2001]
34
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
4.88 These amendments commence on the day after the Bill receives Royal Assent.
Amendment to the National Consumer Credit Protection (Transitional and
Consequential Provisions) Act 2009
Transitional provision - validation and continuation of delegations
4.89 The validation provision validates actions taken during the interim period
(between 22 June 2022 and the day before the amendments in Part 2 of
Schedule 4 to the Bill take effect) which are in accordance with the law of 21
June 2022. The provision also preserves delegations which are in force on 21
June 2022. The effect of these amendments is to preserve existing registry
arrangements as at 21 June 2022, and validate actions taken in accordance with
the law and delegations during the interim period.
[Schedule 4, item 14, items 1 and 2 of Schedule 7 to the National Consumer
Credit Protection (Transitional and Consequential Provisions) Act 2009]
4.90 This provision is necessary to remove doubt that the law and delegations as of
21 June 2022 applied throughout the interim period. This unwinds the effect of
the automatic commencement of the postponed items under the various Acts
supporting the Modernising Business Registers Program.
Application provision
4.91 Schedule 4 to the Bill amends the application provision in the National
Consumer Credit Protection (Transitional and Consequential Provisions)
Act 2009 to allow the application days of items of Part 2 of Schedule 1 to the
Treasury Laws Amendment (Registries Modernisation and Other Measures)
Act 2020 to be specified by a notifiable instrument. However, if an instrument
specifying an application day is not made in relation to any items (or any
matters in relation to any items), the items apply from 1 July 2026.
4.92 The notifiable instrument may specify a single application day generally or a
day in relation to some matter for an amending item (and possibly other days in
relation to other matters). The notifiable instrument may apply to a single item
or a class of items described in the instrument. This allows a differentiated
application in relation to matters and items. The purpose of this approach is to
enable flexibility in the timing and scope of application of the amendments in
relation to matters in different tranches of the Modernising Business Registers
Program.
4.93 However, this flexibility remains bounded by the scope of the amending items
and their eventual automatic application (if not applied earlier). Any notifiable
instruments will only specify the dates on which the items necessary to support
a particular tranche of the Modernising Business Registers Program will apply
in relation to the matters covered by the IT roll out (such as the particular
registers being transferred from ASIC to the Registrar in that tranche).
4.94 The effect of a differentiated application is that the amendments made by items
of Part 2 of Schedule 1 to the Treasury Laws Amendment (Registries
35
Minor and technical amendments
Modernisation and Other Measures) Act 2020 will apply only in relation to the
matters specified in a notifiable instrument after the day specified in the
notifiable instrument. The provisions amended by these items as in force
immediately before the commencement of these amendments will continue to
apply until 1 July 2026 in relation to other matters (or until an earlier date if
specified in a notifiable instrument). This allows the application of
amendments made by these items to align with the IT roll out even where
particular items relate to matters in different tranches of the Modernising
Business Registers Program.
[Schedule 4, item 14, items 1 and 3 of Schedule 7 to the National Consumer
Credit Protection (Transitional and Consequential Provisions) Act 2009]
4.95 Schedule 4 to the Bill also makes changes to other items in Schedule 7 of the
National Consumer Credit Protection (Transitional and Consequential
Provisions) Act 2009 which are necessary because of the amendments to the
application provision.
[Schedule 4, item 14, item 4 of Schedule 7 to the National Consumer Credit
Protection (Transitional and Consequential Provisions) Act 2009]
4.96 These amendments commence on the day after the Bill receives Royal Assent.
Part 3 - Amendments commencing first day of next
quarter
Amendment to the Fringe Benefits Tax Assessment Act 1986
4.97 In 2013 the Fringe Benefits Tax Assessment Act 1986 was amended by the Tax
Laws Amendment (2013 Measures No. 2) Act 2013 to make minor changes to
the FBT regime to ensure it operated as intended and to correct anomalies that
resulted from introduction of the Australian Charities and Not-for-profits
Commission Act 2012.
4.98 The 2013 amendments, which also inserted substantive special conditions
contained in Division 50 of the ITAA 1997 modified section 65J to improve
readability, using a table format which explicitly cross-referenced the income
tax exemption entity provisions. They also included consequential changes to
the FBT exemptions for certain tax exempt not-for-profit employers.
4.99 An unintended consequence of the amendments was that income tax exempt
not-for-profit private health insurers operating hospitals were inadvertently
excluded from accessing the exemption in respect of their hospital employees.
4.100 The legislation fixes this unintended consequence by removing the direct link
between the eligibility for the FBT rebate and access to elements of the FBT
exemption for hospital employees, restoring access to the exemption to certain
tax exempt not-for-profit societies and associations.
36
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
[Schedule 4, item 17, section 57A of Fringe Benefits Tax Assessment
Act 1986]
4.101 The legislation has been drafted to prevent any overlap between those
employees covered by the $30,000 exemption cap and those covered by the
$17,000 exemption cap as set out in subsection 5B(1E) of the Fringe Benefits
Tax Assessment Act 1986. The legislation also ensures that the original intent
of the amendments made in 2012 and 2013, which extended new special
conditions in Division 50 of the ITAA 1997, also applied to FBT.
[Schedule 4, item 16, section 5B of Fringe Benefits Tax Assessment
Act 1986]
4.102 This amendment applies retrospectively to the 2017-18 FBT year and later
FBT years. This retrospective application aligns the amendment with the FBT
amendment period. The retrospective application is appropriate as it ensures
that the legislation operates as intended and it is wholly beneficial to affected
stakeholders.
[Schedule 4, item 18]
Part 4 - Other amendments
4.103 The Financial Sector Reform (Hayne Royal Commission Response--Better
Advice) Act 2021 implemented the Government's response to
recommendation 2.10 of the Financial Services Royal Commission Final
Report by establishing the Financial Services and Credit Panel, located within
ASIC, as the single disciplinary body for relevant providers.
4.104 The Financial Sector Reform (Hayne Royal Commission Response--Better
Advice) Act 2021 also introduced a new registration system for relevant
providers to improve the accountability and transparency of the financial
services sector.
4.105 The Financial Sector Reform (Hayne Royal Commission Response--Better
Advice) Act 2021 commenced on 1 January 2022.
Amendments to the ASIC Act and Corporations Act 2001
4.106 A Financial Services and Credit Panel can be convened by ASIC to consider
certain suspected misconduct by, or circumstances relating to, a relevant
provider. A 'relevant provider' is an individual who is authorised to provide
personal advice to retail clients in relation to relevant financial products.
4.107 If a Financial Services and Credit Panel deems it necessary, it can take certain
actions against the relevant provider. Many of these actions come in stages,
such as making an instrument imposing an administrative sanction, and then
giving notice of that instrument to the relevant provider.
4.108 However, prior to the amendments in this Bill, the Corporations Act 2001
required the affected person to be a relevant provider at each stage of the
37
Minor and technical amendments
process. This has the unintentional consequence of not achieving the policy
intent in the following four areas.
1. Prohibition orders
4.109 A Financial Services and Credit Panel has the power to make a registration
prohibition order that cancels a relevant provider's registration. This order also
provides that the relevant provider is not to be re-registered until a certain date.
4.110 Schedule 4 to the Bill provides that an order not to be re-registered applies to a
person who is or was the relevant provide and ensures that it does not matter
that person may have ceased to be a relevant provider.
[Schedule 4, items 21 and 22, section 921L of the Corporations Act 2001]
2. Giving a notice
4.111 A Financial Services and Credit Panel may make an instrument imposing an
administrative sanction against a relevant provider. If they do so they must also
give a notice to the relevant provider of that instrument.
4.112 It is possible that some time may pass between when the instrument is made
and when the notice is given. It is also possible that in this time the relevant
provider may cease to be a relevant provider (e.g., because they left a company
that held a financial services licence).
4.113 Schedule 4 to the Bill ensures that a notice of administrative action may be
given to any affected person (i.e., the person against whom the instrument is
made), whether the person is a relevant provider at the time the copy of the
instrument is given.
[Schedule 4, items 23-25, section 921M of the Corporations Act 2001]
3. Varying and revoking an instrument
4.114 Once an instrument imposing an administrative sanction is made, a Financial
Services and Credit Panel may vary or revoke the instrument. The law states
that a variation or revocation can occur either on ASIC's initiative or upon
application by the relevant provider.
4.115 Schedule 4 to the Bill provides for an instrument made by a Financial Services
and Credit Panel to be varied or revoked, whether or not the person is a
relevant provider at the time the variation or revocation is sought. It also allows
the affected person to apply for a variation or revocation, whether or not the
person is a relevant provider at the time the variation or revocation is sought.
[Schedule 4, items 26-29, section 921N of the Corporations Act 2001]
4. Recommendations to ASIC
4.116 A Financial Services and Credit Panel has powers under section 921Q of the
Corporations Act 2001 where it reasonably believes that a relevant provider
has contravened a restricted civil penalty provision.
38
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
4.117 In these situations, a Financial Services and Credit Panel may make a
recommendation to ASIC that it apply to the court for a civil penalty against a
relevant provider.
4.118 Schedule 4 to the Bill makes it clear that the power in section 921Q of the
Corporations Act 2001 can be used against a person who was a relevant
provider at the time of the alleged contravention, whether or not the person is a
relevant provider at the time the recommendation is made. This amendment
ensures that a person who is alleged to have contravened a restricted civil
penalty provision is not able to avoid civil proceedings by ceasing to be a
relevant provider.
[Schedule 4, items 30 and 31, section 921Q of the Corporations Act 2001]
Consequential amendments
4.119 To support these amendments, the legislation makes a consequential
amendment to the Australian Securities and Investments Act 2001 to reflect the
revised section heading for section 921N of the Corporations Act 2001.
[Schedule 4, item 20, section 157 of the Australian Securities and
Investments Commission Act 2001]
4.120 These amendments commence on the day after the Bill receives Royal Assent.
Amendments to the ASIC Act
4.121 The Financial Sector Reform (Hayne Royal Commission Response--Better
Advice) Act 2021 provides that a member of a Financial Services and Credit
Panel should be paid in accordance with an amount determined by the
Remuneration Tribunal.
4.122 The Financial Sector Reform (Hayne Royal Commission Response--Better
Advice) Act 2021 does not allow the Remuneration Tribunal to determine an
amount of renumeration for a member of a Financial Services and Credit
Panel.
4.123 To address this, Schedule 4 to the Bill provides that a member of a Financial
Services and Credit Panel is to be paid the remuneration that is determined by
the Remuneration Tribunal. It also provides that Minister may prescribe, by
legislative instrument the allowances that are payable.
4.124 Section 143 of the Australian Securities and Investments Commission Act 2001
(which was inserted by the Financial Sector Reform (Hayne Royal Commission
Response--Better Advice) Act 2021) provides for allowances of members of a
Financial Services and Credit Panel only. However, section 143 should also
cover remuneration, as well as allowances, of members of a Financial Services
and Credit Panel.
4.125 The amendments amend the provision to provide for the remuneration of FSCP
members as well as for allowances. No allowances or remuneration are payable
until a panel is convened to hear a matter.
39
Minor and technical amendments
4.126 These amendments commence on the day after the Bill receives Royal Assent.
[Schedule 4, item 19, section 143 of the ASIC Act]
Other amendments to the Corporations Act 2001
4.127 Under section 1017BA of the Corporations Act 2001, trustees of regulated
superannuation funds are obliged to make certain information publicly
available. These obligations are not intended to extend to self-managed
superannuation funds or small APRA funds.
4.128 The Treasury Laws Amendment (Self Managed Superannuation Funds)
Act 2021 amended the Corporations Act 2001 (and other Acts) to increase the
maximum number of allowable members in a self managed superannuation
fund and small APRA fund from four to six. Consequential amendments in that
Act and the Treasury Laws Amendment (Your Future, Your Super) Act 2021 to
various Treasury laws give effect to this change. The consequential
amendment to section 1017BA(1) of the Corporations Act 2001 was not
included in either Act.
4.129 The amendment in Schedule 4 to the Bill makes that consequential change to
ensure self managed superannuation funds and small APRA funds do not need
to comply with the obligation to publish the required information about the
fund.
[Schedule 4, item 32, section 1017BA of the Corporations Act 2001]
4.130 The amendment commences on the day after the Bill receives Royal Assent.
[Schedule 4, item 33, section 1697 of the Corporations Act 2001]
Part 5 - Amendments of Acts in other portfolios to
allow commutation of certain income streams
4.131 Part 5 of Schedule 4 to the Bill makes amendments to Acts in other portfolios
to provide for certain commutations for the purposes of not exceeding the
transfer balance cap. These amendments apply to market-linked and life
expectancy products only.
4.132 Commutation is the process of converting a superannuation income stream into
a lump sum.
4.133 The transfer balance cap was implemented on 1 July 2017. The transfer
balance cap limits the total amount of superannuation that can be transferred
into a retirement phase pension, where there is no tax on investment earnings.
4.134 Recipients of certain superannuation income stream products were unable to
address excess transfer balance amounts, for example holders of Capped
Defined Benefit Income Streams (CDBIS) commuting a CDBIS pension to a
non-CDBIS pension.
40
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
4.135 Early in 2022 the Treasury Laws Amendment (Allowing Commutation of
Certain Income Streams) Regulations 2022 (the Regulations) addressed this
problem by amending three regulations to provide for partial commutations of
excess transfer balance amounts through commutation authorities issued by the
Commissioner of Taxation. However, for certain products, partially
commuting the income stream means that the product could lose its asset-test
exempt status for social security means tests, which could result in reduced
social security income and a future debt being raised against the recipient. This
is contrary to the policy intent, as these commutations are only occurring
because they are required to reduce their transfer balance account.
4.136 Public consultation identified the need to amend the Social Security Act 1991
and the Veterans' Entitlements Act 1986 for the Regulations to take effect as
intended.
Amendment to the Social Security Act 1991
4.137 The Schedule amends the Social Security Act 1991 to insert a new
subparagraph (ivc) after subparagraph 9B(2)(h)(ivb) to allow life expectancy
income streams to be commuted to the extent necessary in order to comply
with section 136-80 in Schedule 1 to the Taxation Administration Act 1953.
4.138 Subsection 9B(2) of the Social Security Act 1991 sets out the characteristics
that the contract or governing rules of an income stream must possess so that
the life expectancy income stream can qualify for asset-test exempt status
under section 9B. One of the characteristics that the rules must specify include
that the income stream cannot be commuted except in the circumstances listed
in paragraph (2)(h).
[Schedule 4, item 34, section 9B(2) of the Social Security Act 1991]
4.139 The schedule amends the Social Security Act 1991 to insert a new
subparagraph (via) after subparagraph 9BA(2)(f)(vi) to allow market-linked
income streams to be commuted to the extent necessary in order to comply
with section 136-80 in Schedule 1 to the Taxation Administration Act 1953.
4.140 Subsection 9BA (2) sets out the characteristics that the contract or governing
rules of an income stream must possess so that the market-linked income
stream can qualify for asset-test exempt status under section 9BA. One of the
characteristics that the rules must specify include that the income stream
cannot be commuted except in the circumstances listed in paragraph (2)(f).
[Schedule 4, item 35, section 9BA(2) of the Social Security Act 1991]
Amendment to the Veterans' Entitlements Act 1986
4.141 The Veterans' Entitlements Act 1986 has the same rules as the Social Security
Act 1991 for exempting certain income streams from the asset-test. This
Schedule makes the same amendments to ensure that where an income stream
is partially commuted as required by a commutation authority under section
41
Minor and technical amendments
136-80 in Schedule 1 to the Taxation Administration Act 1953, it still meets the
definition of asset-test exempt income stream. This is limited to market-linked
and life expectancy income streams only.
[Schedule 4, items 36 and 37, sections 5JB(2) and 5JBA(2) Veterans'
Entitlements Act 1986]
Commencement
4.142 The amendments in Part 5 commence retrospectively from 5 April 2022, when
the Regulations commenced.
4.143 Retrospective commencement is needed to avoid disadvantaging people who
have started the commutation process between 5 April 2022 and when this Act
receives Royal Assent.
4.144 People who exceed the transfer balance cap may be required to commute the
excess under Division 136 of the Taxation Administration Act 1953.
4.145 As mentioned above, the Regulations made on 5 April 2022 provided for
partial commutations of market-linked and life expectancy products to address
excess transfer balance amounts. The Regulations enabled excesses arising
from affected income stream products to be commuted via the Commissioner
of Taxation issuing a commutation authority to a superannuation income
stream provider. The provider is then required to commute the income stream
under section in Schedule 1 to 136-80 of the Taxation Administration Act
1953.
4.146 Where superannuation providers have changed their governing rules to allow
for this type of commutation for these types of products, those income streams
would lose the asset-test exemption they may have under the Social Security
Act 1991 and the Veterans' Entitlements Act 1986.
4.147 To avoid this negative impact for recipients of these income streams, the
amendments outlined above commence retrospectively from 5 April 2022. This
ensures that from the date that these commutations could legally occur, they
are permissible for asset-test exempt income streams under the Social Security
Act 1991 and the Veterans' Entitlements Act 1986.
4.148 The amendments ensure that commutation made in compliance with the
regulations made on 5 April 2022 does not result in the individual losing their
assets test exempt status in relation to the product commuted, with the resultant
potential reduction of future veterans or social security payments and/or debts
for past payments being raised against that individual.
4.149 No recipient of these income streams will be disadvantaged by this
retrospective commencement. The retrospective commencement is appropriate
as it is wholly beneficial and gives full effect to the original policy intent.
42
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Commencement, application, and transitional
provisions
Commencement
4.150 The amendments commence on the first day of the first quarter following
Royal Assent of the Bill.
[Clause 2, table item 4]
Application
4.151 The income tax and tax withholding exemptions apply from 1 July 2020 to
31 December 2028 inclusive. This covers the intended period of operation of
activities to support planning for, operation of and winding up of activities
arising from the 2023 FIFA Women's World Cup.
[Schedule 3, item 3, paragraph (a) of table item 9.4 and paragraph (b) of
table item 9.5 of section 50-45 of the ITAA 1997]
4.152 Although the exemptions apply retrospectively from 1 July 2020, they are
wholly beneficial to the affected entities as they ensure that no income tax is
payable on specified income and they also exempt certain withholding tax
obligations.
43
Statement of
Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Table of Contents:
Schedule 1 - Recovery grants for Cyclone Seroja .............................. 46
Overview ....................................................................................... 46
Human rights implications ............................................................. 46
Conclusion .................................................................................... 46
Schedule 2 - Transitional provisions relating to the repeal of the
Superannuation (Resolution of Complaints) Act 1993 ......................... 46
Overview ....................................................................................... 46
Human rights implications ............................................................. 47
Conclusion .................................................................................... 48
Schedule 3 - Income tax and withholding exemptions for the FIFA
Women's World Cup ............................................................................ 48
Overview ....................................................................................... 48
Human rights implications ............................................................. 49
Conclusion .................................................................................... 49
Schedule 4 - Minor and technical amendments .................................. 49
Overview ....................................................................................... 49
Human rights implications ............................................................. 49
Conclusion .................................................................................... 50
45
Statement of Compatibility with Human Rights
Schedule 1 - Recovery grants for Cyclone
Seroja
Overview
5.1 Schedule 1 to the 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.
5.2 Schedule 1 to the Bill amends the ITAA 1997 to provide further support for
small businesses and medium and large primary producers impacted by
Cyclone Seroja in April 2021. Schedule 1 to the Bill makes grants received
under Category C of the Disaster Recovery Funding Arrangements 2018 in
relation to Cyclone Seroja non-assessable and non-exempt income for income
tax purposes.
Human rights implications
5.3 Schedule 1 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
5.4 Schedule 1 to the Bill is compatible with human rights as it does not raise any
human rights issues. Statement of Compatibility with Human Rights
Schedule 2 - Transitional provisions relating to
the repeal of the Superannuation (Resolution of
Complaints) Act 1993
5.5 Schedule 2 to the 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
5.6 Schedule 2 to the Bill amends the AFCA Act to facilitate the closure and any
transitional arrangements associated with AFCA replacing the SCT.
46
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
5.7 Schedule 2 to the Bill amends the AFCA Act to provide for the transfer of
records and documents from the SCT to ASIC, includes an express power for
the Federal Court to remit cases back to AFCA instead of the SCT, and
introduces a rule-making power to allow the Minister to prescribe matters of a
transitional nature.
Human rights implications
The right to protection from arbitrary or unlawful interference with privacy
and reputation
5.8 Schedule 2 to the Bill engages, or may engage, the right to privacy which is
contained in Article 17 of the ICCPR.
5.9 Article 17 of the ICCPR contains the right to protection from arbitrary or
unlawful interference with privacy and reputation. The UN Human Rights
Committee has not defined 'privacy' but it is generally understood to comprise
of a freedom from unwanted and unreasonable intrusions into activities that
society recognises as falling within the sphere of individual autonomy. The
collection and sharing of information (public or otherwise) may be considered
to engage and offend the right to privacy.
5.10 The right in Article 17 may be subject to permissible limitations, where these
limitations are authorised by law and are not arbitrary. In order for an
interference with the right to privacy to be permissible, the interference must
be authorised by law, be for a reason consistent with the ICCPR and be
reasonable in the particular circumstances. The UN Human Rights Committee
has interpreted the requirement of 'reasonableness' to imply that any
interference with privacy must be proportional to the end sought and be
necessary in the circumstances of any given case.
5.11 Where records and documents are transferred to ASIC following the closure of
the SCT, these records and documents may contain personal or sensitive
information relating to individuals who bought complaints to the SCT. This
information is received as 'protected information' under section 127 of the
Australian Securities and Investments Act 2001 which prohibits disclosure and
unauthorised use unless in specified circumstances.
5.12 Prior to the SCT's closure, outstanding cases that were not able to be resolved
were transferred to AFCA for resolution. Disclosure from ASIC will generally
be from a request by AFCA for any information relating to these outstanding
cases.
5.13 Under the Superannuation (Resolutions of Complaints)
Act 1993, a party may appeal to the Federal Court on questions of law from a
determination made by the SCT. Disclosure to the Federal Court from ASIC
will be in the course of this appeal process. Where the request for information
47
Statement of Compatibility with Human Rights
would have previously gone to the SCT, it will now be directed to ASIC for
information relating to the original determination.
5.14 Where ASIC does disclose this information, either to AFCA or the Federal
Court, ASIC must comply with disclosure and retention principles contained in
the Privacy Act 1988 and section 127 of the Australian Securities and
Investments Act 2001. Under this section, disclosure to AFCA and the Federal
Court for the purposes of their role and function is considered an 'authorised
disclosure'.
5.15 Based on the above factors, if there is interference with the right to privacy this
is considered to be permissible as it is reasonable, proportionate and necessary
to achieve the legitimate objective of maintaining consumer confidence in the
financial services and consumer credit industry. Therefore, to the extent that
Schedule 2 to the Bill engages the right to privacy, it is consistent with Article
17 of the ICCPR as it subject to limitations that are authorised by law and are
not arbitrary.
Conclusion
5.16 Schedule 2 to the Bill is compatible with human rights as it does not raise any
human rights issues.
Schedule 3 - Income tax and withholding
exemptions for the FIFA Women's World Cup
Overview
5.17 Schedule 3 to the 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.
5.18 Schedule 3 to the Bill amends section 50-45 of the ITAA 1997 to prescribe
FIFA and its wholly owned Australian subsidiary, FWWC2023 Pty Ltd, as
income tax exempt for a certain period associated with delivering the
2023 FIFA Women's World Cup.
5.19 Schedule 3 to the Bill also amends section 128B(3)(a)(i) of the ITAA 1936 to
prescribe FIFA and its wholly owned Australian subsidiary, FWWC2023 Pty
Ltd, as exempt from withholding tax for a certain period associated with
delivering the 2023 FIFA Women's World Cup.
48
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
Human rights implications
5.20 Schedule 3 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
5.21 Schedule 3 to the Bill is compatible with human rights as it does not raise any
human rights issues.
Schedule 4 - Minor and technical amendments
Overview
5.22 This Schedule 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.
5.23 Schedule 4 to the Bill makes a number of miscellaneous and technical
amendments to various laws in the Treasury portfolio. The amendments are
part of the Government's ongoing commitment to the care and maintenance of
Treasury portfolio legislation.
5.24 The amendments make minor and technical changes to correct typographical
and number errors, repeal inoperative provisions, remove administrative
inefficiencies, address unintended outcomes, and ensure that the law gives
effect to the original policy intent.
Human rights implications
5.25 This Schedule engages the right to social security under Article 9 of the
International Covenant on Economic, Social and Cultural Rights (ICESCR).
5.26 The right to social security requires Australia to, within its maximum available
resources, ensure access to a social security scheme that provides a minimum
essential level of benefits to all individuals and families that will enable them
to acquire at least essential health care, basic shelter and housing, water and
sanitation, foodstuffs, and the most basic forms of education.
5.27 This Schedule is relevant to recipients of asset-test exempt market-linked and
life expectancy products started since 1 July 2017 who have started the process
to commute an excess superannuation transfer balance amount from these
products.
49
Statement of Compatibility with Human Rights
5.28 This Schedule improves the right to social security in Australia. On 5 April
2022 the Treasury Laws Amendment (Allowing Commutation of Certain
Income Streams) Regulations 2022 were made to allow recipients of certain
superannuation income streams to commute those streams to meet legal
requirements. Commutation is the process of converting an income stream into
a lump sum.
5.29 However for certain products, partially commuting the income stream means
that the product loses its asset-test exempt status under the Social Security Act
1991 and the Veterans' Entitlement Act 1986. This could lead to lower social
security or veterans' payments. Part 5 of the Schedule avoids this by
exempting commutations required by the relevant law (i.e., section 136-80 of
the Taxation Administration Act 1953).
5.30 The retrospective delays to the automatic commencement date of the
Modernising Business Registries Program amendments in Schedule 4 to the
Bill does not engage any of the applicable rights or freedoms.
Conclusion
5.31 This Schedule is compatible with the right to social security as it protects
social security payments from being unintentionally lowered in certain
circumstances.
50
Attachment 1 Ramsay Review -
Regulation Impact Statement
6.1 On 9 May 2017, the Government announced its response to the Ramsay
Review, which was the first comprehensive review of the financial system's
EDR framework. The Ramsay Review was commissioned by the Government
in April 2016 and led by an independent, expert panel comprising Professor
Ian Ramsay, Ms Julie Abramson and Mr Alan Kirkland.
6.2 Treasury has certified that the Ramsay Review and subsequent consultation as
a process and analysis equivalent to a Regulation Impact Statement.
Policy objective
6.3 The Government's reforms to the EDR framework are intended to address
problems with the dispute resolution arrangements in the financial system,
primarily EDR. EDR is used when a consumer or small business has a
complaint with a financial service provider and wishes to use an impartial out-
of-court process to settle the dispute. EDR should provide low cost, fast and
flexible access to redress to consumers.
6.4 The current EDR arrangements in the financial system consist of FOS, CIO
and the SCT. In 2015-16, FOS, CIO and SCT received 41,223 disputes in total,
with FOS receiving 34,095 disputes (83 per cent), CIO receiving 4,760
disputes (12 per cent) and SCT receiving 2,368 disputes (6 per cent).
6.5 The Ramsay Review was the first comprehensive review of the financial
system's EDR framework. It found that the current framework is the product of
history rather than design and a number of features of the current system mean
that it is not producing the best possible outcomes.
6.6 Firstly, the Ramsay Review found the existence of multiple EDR schemes with
overlapping jurisdictions means: it is difficult to achieve comparable outcomes
for consumers with similar complaints; it is difficult for consumers to progress
disputes involving firms that are members of different schemes; and there is an
increased risk of consumer confusion. The Ramsay Review also found that
multiple EDR bodies resulted in duplicative costs for industry and for the
regulator.
6.7 The Ramsay Review also found that allowing competition between schemes,
as currently occurs between FOS and CIO, creates the risk that schemes
compete in relation to benefits provided to Financial Firms, rather than on
achieving better outcomes for consumers.
51
Ramsay Review - Regulation Impact Statement
6.8 The Ramsay Review found that the monetary limits and compensation caps of
the schemes have fallen behind what is required to ensure access to justice for
consumers and small business. FOS and CIO's current monetary limit of
$500,000 and compensation cap of $309,000 are no longer fit-for-purpose and
bear little relationship to the value of some financial products (for example,
mortgage balances, home insurance policies and some investments), which
results in a gap in EDR coverage.
6.9 The Ramsay Review also identified that small businesses do not have adequate
access to EDR because the existing monetary limits of $500,000 for the value
of the claim under dispute, and $2 million in relation to credit facilities and the
existing compensation cap of $309,000, preclude many small business disputes
from being able to be brought to the schemes.
6.10 Finally, the Ramsay Review found that the dispute resolution arrangements for
superannuation require improvement. Although SCT has a highly professional
staff and Chairperson, the Ramsay Review found it was unable to resolve
disputes quickly, in contrast to FOS and CIO. For example, in 2015-16, for
disputes that reached determination, it took an average of 796 days for the
dispute to be resolved.
6.11 The Ramsay Review found that the problems facing SCT could be attributed to
a lack of flexibility in its funding -- there is no link between SCT funding and
the level of complaints it receives -- as well as outdated governance
arrangements and limited flexibility to determine its dispute resolution
processes. Additionally, there was a lack of focus on achieving system-wide
improvements and the existing accountability mechanisms were passive and
indirect. The Ramsay Review considered that these issues could not be
addressed through retaining and reforming the SCT and a shift to an
ombudsman scheme was required.
6.12 The Ramsay Review found that these problems of the existing framework are
significant and cannot be seen as self-correcting. Market forces will not resolve
the above problems, necessitating Government action.
Implementation options
Alternative Option: Maintain the status quo
6.13 This option would essentially maintain the current arrangements of multiple
EDR bodies.
6.14 The Ramsay Review found that the pressures on SCT would increase as the
superannuation system matures and an increasing proportion of the population
moves from the accumulation to the drawdown (retirement) phase.
52
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
6.15 In addition, the Ramsay Review found that this option would not address
problems arising under a multi-scheme framework with overlapping
jurisdictions (consumer confusion, inconsistent outcomes for comparable
disputes and duplicative costs). Therefore, this was not one of the
recommendations of the Ramsay Review and was not one pursued by
Government.
Alternative Option: Reform SCT only
6.16 Under this option, there would be some targeted reforms to the SCT to increase
the way the SCT is funded (for example, volume based funding) and improved
governance arrangements.
6.17 However, the Ramsay Review found that there was inherent inflexibility in
retaining a tribunal structure, which could only be addressed through migrating
superannuation disputes from a tribunal to an ombudsman structure.
6.18 In addition, reforming only the SCT would also not address the problems with
other aspects of the EDR framework.
Recommended Option: Establish the AFCA as an
industry based scheme based on Ramsay Review
recommendations
6.19 This option would switch to a single EDR body to replace the FOS, CIO and
SCT with a one stop shop dispute resolution body based on an industry
ombudsman model.
6.20 The shift to a single EDR body will address a number of problems with the
existing framework. It will improve outcomes for consumers by:
• increasing consistency in processes and outcomes for similar
complaints;
• making it easier to pursue disputes involving multiple Financial Firms;
and
• decreasing consumer confusion.
6.21 A single EDR body will also eliminate duplicative costs for industry, the
regulator and other stakeholders.
6.22 The Ramsay Review found that an ombudsman model carried advantages over
the existing framework. For superannuation disputes in particular, a single
EDR body based on an ombudsman model carries large benefits as it will
provide flexibility and increase responsiveness to improve the timeliness of
superannuation disputes. Ombudsman schemes provide complainants with an
alternative to the judicial system. The traditional court system, which relies on
53
Ramsay Review - Regulation Impact Statement
lawyers, the rules of evidence and specific processes and procedures can be
complex and intimidating for consumers. In this regard, a benefit of
ombudsman schemes is that they provide claimants with a relatively simple
process, led by the ombudsman, negating the need for formal legal
representation. Furthermore, ombudsman services are not restricted to
resolving legal issues; rather, they have scope to consider a broader range of
factors.
6.23 Where there is a general problem in an industry affecting multiple consumers
and a number of similar complaints are received about a particular issue,
ombudsman schemes have the capacity to instigate and conduct investigations
to identify systemic issues.
6.24 Ombudsman schemes are also able to promote access to justice through their
ability to adapt and innovate in response to changes in the external
environment. This has been particularly relevant in the financial system, which
has seen rapid changes in the types of products being sold and the types of
consumers purchasing them.
Assessment of impacts
6.25 Consumers and small businesses will be the primary beneficiaries of the new
framework. The primary benefits will be increased access to justice and easier
access to dispute services.
6.26 Increased limits and decreased confusion caused by multiple schemes will
mean that consumers and small businesses will save more time and be able to
bring higher value disputes to the schemes. Having a single dispute resolution
body will also promote consistency of outcomes, which will provide industry
and consumers with greater certainty as to what the outcome of a complaint
will be when it is lodged with AFCA.
6.27 For superannuation complaints, the new scheme will reduce the time taken for
complaints to be resolved. This will benefit both consumers and industry.
6.28 The Ramsay Review noted that a single dispute resolution scheme would have
a greater ability to shift resources from those areas experiencing a reduction in
dispute volumes to those areas experiencing higher dispute volumes.
6.29 There will be a number of costs associated with the transition to the new
scheme. Impacts on industry include paying membership and dispute
resolution fees to AFCA, having to update disclosure documents, and having to
account for increased IDR reporting to ASIC. The increased monetary limits
will also likely result in more disputes being lodged with AFCA, which will
require additional funding from industry.
6.30 Superannuation funds will also need to be members of AFCA, meaning they
will need to pay membership and dispute resolution fees and will also incur
costs to update disclosure documents.
54
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
6.31 Treasury considers that the benefits to consumers, small businesses and
industry will outweigh the costs associated with implementing the new
framework.
Regulatory burden
6.32 Treasury has estimated the costs for business using the governments
Regulation Impact Framework as required by the Office of Best Practice
Regulation. The costs are shown below.
Average annual regulatory costs (from business as usual)
Change in Business Community Individuals Total change
costs organisations in costs
($ million)
Total, by $43.85 million $ $ $43.85 million
sector
Consultation
6.33 In the course of the Ramsay Review, the Panel conducted multiple rounds of
consultation:
• The Ramsay Review published an Issues Paper, which was released for
public consultation for a period of four weeks from 9 September 2016
to 7 October 2016. The Panel received 127 submissions to the EDR
Review Issues Paper, 33 of which were marked as confidential and 1
anonymous.
• The Ramsay Review published an Interim Report, which was released
for public consultation for a period of seven weeks from 6 December
2016 to 27 January 2017. The Panel received 56 submissions to the
EDR Review Interim Report, four of which were marked as
confidential.
• The Ramsay Review invited parties to make submissions by
3 March 2017 on Recommendations 11 and 13 of the Australian Small
Business and Family Enterprise Ombudsman's report on the Inquiry
into small business loans. The Minister for Revenue and Financial
Services wrote to the Ramsay Review Panel asking them to take
particular account of these recommendations as they prepared their
final report. Four submissions were received on these
recommendations.
55
Ramsay Review - Regulation Impact Statement
• The Panel held many roundtables and meetings with individual
stakeholders as part of these consultation processes. The Panel also
undertook site visits of each of the bodies: CIO (14 September 2016);
FOS (16 September 2016) and SCT (16 September 2016).
6.34 Following the release of the final report and Government response, the
Government consulted on exposure draft legislation (draft Bill and regulations)
from 17 May to 14 June 2017. As part of this consultation, a range of
consultation materials were published including a consultation paper on the
new dispute resolution framework, draft explanatory memorandum, fact sheet
and consultation note on the Ministerial authorisation process.
6.35 In the course of finalising the regulatory costings, Treasury has undertaken
targeted consultation with key stakeholders to inform the parameters and
assumptions used.
Conclusion and recommended option
6.36 The recommended option will involve:
• establishing a new one-stop-shop dispute resolution body --AFCA
which will replace FOS, CIO and SCT and handle all financial
complaints, including superannuation complaints;
• ensuring AFCA will be overseen by a board comprising an
independent Chair and equal numbers of directors with consumer and
industry backgrounds;
• requiring AFCA to be industry funded;
• requiring all Financial Firms (including superannuation funds) to be
members of AFCA; and
• making ASIC responsible for overseeing AFCA to ensure that it meets
the standards set out in the legislation. To fulfil this role, the legislation
will provide ASIC with the ability to set regulatory requirements that
AFCA must adhere to and also provide ASIC with a general directions
power to compel AFCA to comply with standards in the legislation and
in regulatory requirements.
Implementation and evaluation
6.37 AFCA will be established as part of the Treasury Laws Amendment (Putting
Consumers First--Establishment of the Australian Financial Complaints
Authority) Bill 2017. Following passage of the legislation, a not-for-profit
company will be authorised as AFCA by the Minister. AFCA will commence
56
Treasury Laws Amendment (2022 Measures No. 1) Bill 2022
operations on 1 July 2018 and will receive all financial disputes, including
superannuation disputes.
6.38 ASIC will be responsible for ongoing monitoring of AFCA to ensure that it
meets the standards set out in legislation. In addition, AFCA will be subject to
periodic independent reviews. AFCA will also be required to establish an
independent assessor who will assess the processes by which AFCA makes
decisions.
6.39 As an industry body, key elements of AFCA's operations will be set out in its
operating rules or 'terms of reference'. The Minister for Revenue and Financial
Services established a transition team, chaired by Dr Malcolm Edey, to lead the
creation of AFCA. Dr Edey will provide advice to the Minister on the terms of
reference, governance and funding arrangements, as well as transitional
arrangements and the authorisation process. The transition team will consult
extensively with ASIC, the existing EDR bodies, industry and consumer
groups, thereby ensuring a smooth transition from the existing framework to
AFCA.
6.40 The SCT, as a statutory body, will continue operation for an additional two
years to resolve all legacy complaints. The legislation also makes provisions to
allow FOS and CIO to continue operations for up to an additional 12 months to
resolve legacy complaints
57