Explanatory Memorandum(Circulated by authority of the Minister for Revenue and Financial Services Minister for Women Minister Assisting the Prime Minister for the Public Service the Hon Kelly O'Dwyer MP)
General outline and financial impact
Schedule 1 to this Bill makes a number of regulatory improvements to Treasury portfolio laws. The regulatory improvements include:
- amending the superannuation laws to enable the Commissioner to pay certain superannuation amounts directly to individuals with a terminal medical condition;
- amending the Corporations Act 2001 to modify the notification and reporting obligations applying to certain corporations that have property in receivership or property in respect of which a controller is acting; and
- repealing several inoperative Acts as well as amending the taxation law to remove a number of inoperative or spent provisions.
Date of effect: Generally, these measures commence on Royal Assent or the beginning of the first quarter following Royal Assent.
Proposal announced: These measures were previously introduced in Treasury Legislation Amendment (Repeal Day 2015) Bill 2015 which lapsed on the calling of the 2016 Election. Further, the changes to the superannuation laws were announced in the 2015-16 Budget as part of the lost and unclaimed superannuation reform package.
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 1, paragraphs 1.90 to 1.93.
Compliance cost impact: These measures will reduce the regulatory burden. Specifically,
- the estimated reduction in compliance costs from implementing all six measures in the lost and unclaimed superannuation reform package, including the measure in Schedule 1, is $0.97 million per annum;
- modifying the notification and reporting obligations applying to certain corporations that have property in receivership will reduce regulatory burden by $1.8 million; and
- repealing inoperative Acts and provisions of the taxation law will reduce compliance costs for affected taxpayers by reducing the overall size and complexity of the tax law. The overall magnitude of the compliance save is unquantifiable, but expected to be small.
Extending tax relief for merging superannuation funds
Schedule 2 to this Bill amends the ITAA 1997, the SLAA 2012 and the TLAA 2010 to extend the tax relief for merging superannuation funds until 1 July 2020.
Date of effect: This measure is available for mergers that occur on or after 1 October 2011 and before 2 July 2020.
Proposal announced: This measure was announced on 9 May 2017 as part of the 2017-18 Budget.
Financial impact: This measure has the following revenue implications:
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.19 to 2.22.
Compliance cost impact: This measure is expected to have a minor regulatory impact.
SuperStream gateway network governance funding
Schedule 3 to this Bill amends the APRA Act to enable the Government to recover the ongoing cost of the governance of the superannuation transaction network from the superannuation supervisory levy.
Date of effect: 1 July 2018
Proposal announced: 2016-17 MYEFO
|Revenue - Australian Prudential Regulation Authority||-||-||-||$0.6m||$0.7m|
|Related expense - Australian Taxation Office||-||-||-||$0.6m||$0.7m|
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights -paragraphs 1.21 to 1.24
Compliance cost impact: Nil
Transfer of early release function
Schedule 4 to this Bill transfers the regulator role for early release of superannuation benefits on compassionate grounds from the Chief Executive Medicare (Department of Human Services) to the Commissioner of Taxation (Australian Taxation Office).
Date of effect: A single day to be fixed by Proclamation.
However, if the provisions do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period.
Applications for the early release of superannuation benefits on compassionate grounds made on or after the commencement of this Schedule must be made to the Commissioner of Taxation (Australian Taxation Office).
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - paragraphs 4.26 to 4.29.
Compliance cost impact: Nil.
Payment of GST on taxable supplies of certain real property
Schedule 5 to this Bill amends the TAA 1953, ITAA 1997 and the GST Act to require purchasers of new residential premises and new subdivisions of potential residential land to make a payment of part of the purchase price to the ATO.
Date of effect: This measure applies to certain supplies of real property for which any consideration is first provided on or after 1 July 2018.
Proposal announced: This measure was announced by the Treasurer on 9 May 2017 in the 2017-18 Budget. The transitional arrangements included in Schedule 5 of the Bill following industry consultation have not previously been announced.
Financial impact: This measure is estimated to result in an increase in GST revenue of $590 million over the forward estimates period. All GST revenue is distributed to the States and Territories.
Note that the financial impact above includes the impact of the transitional arrangements that have now been included in Schedule 5 to this Bill and accordingly differs from the financial impact announced in the 2017-18 Budget.
Human rights implications: This measure does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5, paragraphs 5.84 to 5.104.
Compliance cost impact: The measure imposes some transitional costs for property developers who may need to make changes to accommodate the measure in their conveyancing processes and systems to account for the changes. Cost impacts on purchasers via conveyancing services are expected to be minor, given this change leverages the existing disbursement process and the use of standard contracts.
Summary of regulation impact statement
Regulation impact on business
Impact: Minor transitional costs on business.
- The measure may require conveyancers and property developers to implement changes to their processes and systems. As most are familiar with GST processing, the impact of this measure was considered to be low.
- The two-year transitional relief minimises transitional costs on existing contracts, service providers and property developers.
- There may be minor additional costs for service providers in the short term that will be required to apply existing and new arrangements for a period of two years, but this is preferable to the costs imposed by changing existing contracts to accommodate the measure.
- Some conveyancers may pass on the additional compliance activity by increasing fees payable by purchasers. However, the regulatory impact of the change is considered minor and occurs at a time when a range of disbursements are occurring as part of the transfer of property.