House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)

Chapter 1: Amendments relating to the cessation of registries modernisation program

Outline of chapter

1.1 This legislation facilitates the return of responsibility and resources for administering Commonwealth business registers from the ATO to ASIC, in winding up the MBR Program. The amendments ensure that Public Service Act employees transferred to ASIC as part of this, and any future, MoG change are subject to the same legislative framework as existing ASIC staff employed under section 120 of the ASIC Act. The legislation also adjusts provisions relating to registry records of CCIVs.

Context of amendments

1.2 The MBR Program was established in 2018-19 to transform Commonwealth business registry services. The Australian Business Register and 31 business registers administered by ASIC were to be consolidated onto a centralised platform administered by a newly established Registrar within the ATO. Legislative amendments were passed to transfer ASIC's registry functions and powers to the Registrar, and ASIC registry employees were transferred to the ATO as part of a MoG change in 2021.

1.3 In August 2023, following an independent review, the Government announced it would cease the MBR Program and pursue its modernisation objectives through other means. This legislation is part of a series of amendments to give effect to the Government's decision to unwind the MBR Program.

1.4 The frameworks for transfer of employees and when relevant, transfer of business, between Australian Government departments and agencies in a MoG change are set by the Public Service Act and the Fair Work Act. In this case, the APS Commissioner is expected to make a written determination under paragraph 72(1)(b) of the Public Service Act to transfer ATO registry employees to ASIC.

1.5 The ASIC Act provides for the functions and powers of ASIC. Since 2019, when ASIC stopped employing staff under the Public Service Act, the ASIC Act also provides the framework for ASIC employment.

1.6 The amendments in Schedule 1 to the Bill ensure that persons transferred to ASIC as part of this MoG change (and any other similar MoG changes that may occur in the future) are subject to the same legislative framework, and therefore the same duties, requirements, delegations and protections as staff employed by the ASIC Chairperson under section 120 of the ASIC Act.

1.7 Requirements of the Public Service Act and the Fair Work Act relating to the employment terms and conditions of staff transferred as a result of MoG changes are maintained.

1.8 The CCIVs Act contains provisions which amend the ITAA 1997, which are contingent upon commencement of the MBR Program. As that program is to cease, minor and technical amendments are made to those provisions to allow them to be considered and adjusted as part of the broader unwind of the MBR Program.

1.9 Relevant Commonwealth agencies were consulted in developing the amendments in Schedule 1 of the Bill, including from 5 August to 11 October 2024 on drafts of the amendments, and their input accommodated to ensure the amendments interact effectively with the existing legislative framework.

Comparison of key features of new law and current law

Table 1.1 Comparison of new law and current law

Detailed explanation of new law

Transfer of registry staff

1.10 To give effect to the business registers MoG change, the APS Commissioner is expected to make a written determination under paragraph 72(1)(b) of the Public Service Act that ATO registry staff will cease to be APS employees and become non-APS employees at ASIC. Amendments are needed to the ASIC Act, however, to ensure employees transferred to ASIC under this mechanism are taken to be employed under a written agreement by the ASIC Chairperson, on behalf of ASIC, and are therefore subject to the same legislative framework as existing ASIC staff members.

1.11 Pursuant to subsection 120(1) of the ASIC Act, the ASIC Chairperson may employ, on behalf of ASIC, any permanent, temporary or casual staff under written agreements as the Chairperson considers necessary for the performance of any of ASIC's functions or powers. Under these amendments, a person covered by a written determination under paragraph 72(1)(b) of the Public Service Act (that is, transferred staff) is taken to be employed by the ASIC Chairperson by way of a written agreement under subsection 120(1) of the ASIC Act. Transferred staff are taken to be employed under subsection 120(1) when the determination that they are non-APS employees comes into effect.

[Schedule 1, item 1, subsection 120(3) of the ASIC Act]

1.12 As a result, transferred staff constitute a 'staff member' defined in subsection 5(1) of the ASIC Act, and are subject to the same functions, responsibilities and protections as other (existing) ASIC staff employed by a written agreement made under section 120 of that Act. For example, transferred staff are:

•

officials of ASIC for the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013), per subparagraph 9A(c)(iii) of the ASIC Act.

•

able to be delegated functions and powers under paragraph 102(2)(b) of the ASIC Act.

•

subject to the ASIC Code of Conduct and must uphold ASIC Values, under subsections 126B(2) and 126C(3) of the ASIC Act.

•

not liable to an action or other proceeding for damages in relation to an act done in good faith in the performance of any functions, or in the exercise of any power, that is conferred by relevant legislation, per paragraph 246(1)(g) of the ASIC Act.

1.13 As transferred staff are taken to be employed by way of a written agreement under subsection 120(1), the ASIC Chairperson is able to determine their terms and conditions of employment (including remuneration) under subsection 120(2) of the ASIC Act.

1.14 The terms and conditions of employment of transferred staff which are determined by the ASIC Chairperson must be consistent with subsection 72(3) of the Public Service Act. Therefore, in determining the terms and conditions of employment of each transferred staff member, the ASIC Chairperson must ensure the remuneration and other conditions of employment are not less favourable than what that person was entitled to immediately before the MoG change, in accordance with subsection 72(3) of the Public Service Act. This provision is intended to clarify the framework for MoG changes set by the Public Service Act applies.

[Schedule 1, item 1, subsection 120(4) of the ASIC Act]

1.15 As indicated by the explanatory note beneath new subsection 120(4) of the ASIC Act, subsection 72(3) of the Public Service Act would no longer apply to transferred staff at ASIC when a 'relevant change' occurs under subsection 72(4) of the same Act. This includes a change that results from making, varying, or terminating an enterprise agreement that applies to the transferred staff. As discussed above, these amendments do not intend to alter how this provision currently operates, including to end the period during which subsection 72(3) of the Public Service Act applies to persons covered by a determination made pursuant to subsection 72(1)(b) of the same Act.

1.16 The ASIC Act contains certain references to former subsections 120(3) and (4), which have since been repealed. These references are clarified to be to the former provisions - not to the new subsections 120(3) and (4) introduced by these amendments.

[Schedule 1, items 2 and 3, subsection 249(4) and section 310 of the ASIC Act]

Collective corporate investment vehicles

1.17 The CCIVs Act creates a new type of company, a CCIV. Part 3 of Schedule 5 to the CCIVs Act contains amendments to the ITAA 1997 which are consequential on the enactment of provisions establishing the MBR Program. These amendments require the Registrar to make a record of additional information in relation to CCIVs, with the intention to require the Registrar to publish this information on the new consolidated platform as part of the MBR Program. These amendments were due to commence on 1 January 2025, as part of the progressive implementation of the MBR Program on or by 1 July 2026.

1.18 In light of the cessation of the MBR Program, the amendments in Part 3 of Schedule 5 to the CCIVs Act will now automatically commence by or on 1 July 2026 to ensure the broader work to unwind the MBR Program can appropriately address any legislative amendments that may be required in relation to CCIVs.

[Schedule 1, item 5, table item 5 of the table in subsection 2(1) of the CCIVs Act]

1.19 The amendments also validate any actions taken by the ATO as if this delay had not occurred and the relevant CCIVs Act provisions commenced on 1 January 2025. This provision will apply to ATO actions taken between the original 1 January 2025 commencement date and when the current Bill commences (i.e., the day after this Bill receives Royal Assent). This approach ensures that, should ATO receive a request to disclose CCIVs information, disclosure of this information would be valid pursuant to the CCIVs Act, should the delaying provision in this Bill not commence before 1 January 2025.

[Schedule 1, item 6, item 20 in Schedule 5 to the CCIVs Act]

Commencement, application, and transitional provisions

1.20 Part 1 of Schedule 1 to the Bill commences the day after Royal Assent. The amendments in Part 1 apply to employees transferred to ASIC, under the Public Service Act, on and after the commencement date.

[Schedule 1, item 4, section 347 of the ASIC Act]

1.21 Division 1 of Part 2 of Schedule 1 to the Bill commences on 31 December 2024. The amendments apply on 31 December 2024.

1.22 Division 2 of Part 2 of Schedule 1 to the Bill commences the day after Royal Assent.