Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Regional Development and Territories, The Hon Nola Marino MP)BANKRUPTCY (ESTATE CHARGES) AMENDMENT (NORFOLK ISLAND) BILL 2020
OUTLINE
The purpose of the Bankruptcy (Estate Charges) Amendment (Norfolk Island) Bill 2020 is to extend the application of the Bankruptcy (Estate Charges) Act 1997 (Estate Charges Act) to Norfolk Island.
The Estate Charges Act imposes charges that are payable by trustees and debt agreement administrators to the Commonwealth in respect of personal insolvency administrations under the Bankruptcy Act 1966 (Commonwealth Bankruptcy Act). In particular, the Estate Charges Act imposes a realisations charge (a levy on all realisations made in respect of administrations under the Commonwealth Bankruptcy Act) and an interest charge (a levy on interest earned on money held in personal insolvency accounts). The realisations charge and interest charge recover the cost to the Commonwealth of regulating the personal insolvency system. Subject to the Commonwealth Bankruptcy Act being extended to Norfolk Island, the Bill will ensure that any insolvencies on Norfolk Island are treated consistently and attract the same estate charges as all other insolvencies administered under the Commonwealth Bankruptcy Act.
Financial impact statement
The amendments made by this Bill will ensure insolvencies administered on Norfolk Island contribute to the recovery of the cost of regulating the personal insolvency system in line with the Government's cost recovery policy. Therefore, the Bill will have no significant financial implications for the Commonwealth.
NOTES ON CLAUSES
Clause 1 - Short title
536. Clause 1 will provide that the Bill, if enacted, will be known as the Bankruptcy (Estate Charges) Amendment (Norfolk Island) Act 2020.
Clause 2 - Commencement
537. Clause 2 will provide for the commencement of the provisions of the Bill, as set out in the table.
538. Table item 1 provides that the whole of the Act will commence at the same time as the provisions covered by Schedule 3 to the Territories Legislation Amendment Act 2020. The item provides that the Act will not commence at all if Schedule 3 to the Territories Legislation Amendment Act 2020 does not commence.
Clause 3 - Schedules
539. Clause 3 will provide that legislation that is specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule. Any other item in a Schedule will have effect according to its terms.
Schedule 1 - Amendments
Bankruptcy (Estate Charges) Act 1997
Item 3 - Section 3A
540. This item will repeal section 3A of the Bankruptcy (Estate Charges) Act 1997. Section 3A currently provides that the Act does not extend to Norfolk Island. By repealing the section, this item is intended to ensure that the Act applies to Norfolk Island and that realisation and interest charges are able to be imposed and collected in relation to bankruptcies, personal insolvency agreements and debt agreements on Norfolk Island.