House of Representatives

Explanatory Memorandum

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

Chapter 7: Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Bill 2024

Schedule 1 - Amendments relating to the cessation of registries modernisation program

Overview

7.1 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.

7.2 Schedule 1 to the Bill 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.

Human rights implications

7.3 Part 1 of Schedule 1 to the Bill engages the right to the enjoyment of just and favourable conditions of work, under Article 7 of in the International Covenant on Economic, Social and Cultural Rights.

7.4 The right to just and favourable conditions of work in Article 7 encompasses elements including fair wages and equal remuneration for work of equal value, safe and healthy working conditions, reasonable limitation of working hours and periodic holidays. In accordance with Article 4, this right can only be subject to limitations that are determined by law, and proportional.

7.5 The amendments in Part 1 of Schedule 1 leverage existing legislative frameworks for the transfer and rights of employees of Australian Government departments and agencies. In particular, frameworks for the 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. The ASIC Act provides for the functions and powers of ASIC, and well as for employment of ASIC staff.

7.6 Part 1 of Schedule 1 amends the ASIC Act, so that Public Service employees transferred to ASIC under a MoG change are subject to the same legislative framework as existing ASIC staff employed under section 120 of that Act. This ensures transferred employees have consistent working entitlements, duties and protections as other ASIC staff. The operation of provisions in legislation which protect employment conditions, including remuneration, of employees transferred under a MoG change is expressly upheld.

[Schedule 1, item 1, subsections 120 (3) and (4) of the ASIC Act]

7.7 As such, the amendments engage but do not limit the right to the enjoyment of just and favourable conditions of work in Article 7, which are substantively provided for in the existing legislative frameworks.

Conclusion

7.8 Schedule 1 to the Bill is compatible with human rights as it does not raise any human rights issues.

Schedule 2 - Regulation of safety standards and information standards

Overview

7.9 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.

7.10 Schedule 2 to the Bill amends the Competition and Consumer Act 2010 (CCA) (including the Australian Consumer Law (ACL)) to improve the flexibility and enforceability of safety standards and information standards by:

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replacing the Commonwealth Minister's ability to 'declare' certain standards as safety standards and information standards with an expanded ability to 'make' safety standards and information standards;

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allowing safety standards and information standards to incorporate matters in instruments and other writings as they exist from time to time, including international standards;

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updating requirements relating to the nomination of alternative methods of compliance with safety standards, including through the addition of civil penalty provision; and

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allowing the regulator to request certain information and documents in relation to compliance with safety standards and information standards and inserting a civil penalty provision for failure to comply.

Human rights implications

7.11 Schedule 2 to the Bill engages the following rights:

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the right to a fair trial and public hearing (Article 14); and

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the right to privacy (Article 17).

Right to a fair trial and public hearing

7.12 Schedule 2 to the Bill engages the right to a fair trial in Article 14 of the International Covenant on Civil and Political Rights (ICCPR) through the introduction of civil penalty provisions.

7.13 Article 14 applies only in relation to the rights of natural persons, not legal persons, such as companies.

7.14 The following table sets out the new civil penalty provisions introduced by the Bill:

Table 6.1

7.15 The maximum pecuniary penalty that a court may order for breach of each of the above civil penalty provisions, apart from a breach of subsection 108(3), is $50,000 for a body corporate and $10,000 for a person that is not a body corporate.

7.16 The maximum pecuniary penalty that a court may order for breach of subsection 108(3) is $250,000 for a body corporate and $50,000 for a person that is not a body corporate.

7.17 The civil penalty provisions contained in Schedule 2 to the Bill are not 'criminal' for the purposes of human rights law. While the civil penalty provisions included in Schedule 2 to the Bill are intended to deter people from not complying with safety standards and information standards, these provisions are regulatory and disciplinary in nature.

7.18 Further, the provisions do not apply to the general public, but to a class of businesses that should reasonably be aware of their obligations under the ACL. The imposition of civil penalties will enable the regulator to respond effectively to non-compliance.

7.19 Further, the judiciary continues to have discretion to consider the seriousness of the contravention and impose a penalty that is appropriate in the circumstances. The civil courts are experienced in making appropriate civil penalty orders with due regard to the maximum penalty amount, the nature of the contravening conduct and the size of the organisation involved.

7.20 Therefore, a relevant consideration in setting a civil penalty amount is the maximum penalty that should apply in the most egregious instances of non-compliance with the Schedule 2 to the Bill.

7.21 Finally, there is no sanction of imprisonment for non-payment of these civil penalties.

7.22 Based on the above factors, the cumulative effect and the nature and severity of the civil penalties in Schedule 2 to the Bill are not 'criminal' for the purposes of human rights law.

7.23 To the extent Schedule 2 to the Bill engages Article 14 of the ICCPR, it does so appropriately and is consistent with the Bill's objectives to encourage compliance with safety standards and information standards. Compliance with safety standards and information standards enable consumers access to a greater range of safer products. Penalties are required to adequately incentivise compliance. In forming this view, consideration has been specifically given to the document 'A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers', which was published by the Attorney-General's Department on 24 May 2024.

Right to privacy

7.24 Schedule 2 to the Bill engages the right to protection from unlawful or arbitrary interference with privacy under Article 17 of the ICCPR.

7.25 The right to protection from unlawful or arbitrary interference with privacy under Article 17 of the ICCPR 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.

7.26 New section 108A and section 137B of the ACL engage the right to privacy where the regulator gives a request, in writing, to a person requiring information or documents be provided. The purpose of this request is to determine whether a person has complied, is complying, or will comply with a safety standard that is in force for consumer goods or product related services of a particular kind or an information standard that is in force for goods or services of a particular kind. In some circumstances, the requested information or documents may include personal information.

7.27 This information ultimately supports the objects of the CCA to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection, by ensuring that the regulator can request information from suppliers which demonstrates that they are complying or will comply with their chosen safety standard alternative or an information standard. This only applies to a person, in trade or commerce, that has supplied or offered for supply, is supplying or offering for supply, or intends to supply or offer for supply the particular consumer goods or product related services in the case of safety standards, or goods or services in the case of information standards.

7.28 Upon receipt of requested documents or information, the regulator handles the information and keeps the documents in accordance with relevant legislation, including the Privacy Act 1998. The CCA also contains provisions, such as section 155AAA, which requires the regulator to keep certain protected information confidential, except in limited circumstances. Taken together, this legislation contains provisions aimed to protect confidentiality and limit the circumstances in which personal information may be disclosed.

7.29 Based on the above factors, the potential for interference with the right to privacy is permissible as it is considered to be reasonable, proportionate and necessary to achieve the legitimate objective of maintaining consumer confidence in the industry. Therefore, to the extent that Schedule 2 engages the right to privacy, it is consistent with Article 17 of the ICCPR as any limitations on that right are authorised by law and are not arbitrary.

Conclusion

7.30 Schedule 2 to the Bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary, and proportionate.

Schedule 3 - Increasing the cap on the Housing Australia Special Account

Overview

7.31 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.

7.32 Schedule 3 to the Bill amends the Housing Australia Act to increase the cap on the balance on the Housing Australia Special Account from $1 billion to $4 billion.

7.33 The Housing Australia Special Account is used to support the delivery of key activities by Housing Australia that fund the provision of social, affordable, and acute housing in Australia. These activities include the Affordable Housing Bond Aggregator, the Housing Australia Future Fund Facility, and the National Housing Accord Facility.

Human rights implications

7.34 Of the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, Schedule 3 of the Bill engages the right to an adequate standard of living, including housing, as referred to in Article 11.1 of the International Covenant on Economic, Social and Cultural Rights.

7.35 Article 11.1 of the International Covenant on Economic, Social and Cultural Rights states that everyone has the right to an adequate standard of living for themselves and their family, including adequate food, clothing and housing, and to the continuous improvement of living conditions and that 'appropriate steps' be taken to 'ensure the realization of this right'.

7.36 Schedule 3 to the Bill amends the Housing Australia Act to increase the cap on the balance of the Housing Australia Special Account from $1 billion to $4 billion.

7.37 Schedule 3 to the Bill seeks to promote the right to an adequate standard of living, including housing, by increasing the cap to strengthen Housing Australia's ability to improve housing outcomes for Australians and to support Housing Australia's ability to deliver key activities that fund the provision of social housing, affordable housing and housing that addresses acute housing needs. The increased cap facilitates the additional $3 billion being made available to Housing Australia through a line of credit supporting the Affordable Housing Bond Aggregator. The increased cap recognises that the previous size of the cap constrained Housing Australia's ability to deliver key activities that fund the provision of social housing, affordable housing and housing that addresses acute housing needs.

7.38 Schedule 3 to the Bill recognises the importance of ensuring that the cap does not constrain the ability to provide additional credits to the Housing Australia Special Account. It assists with the careful coordination of additional credits to the Housing Australia Special Account to ensure the balance does not exceed the cap. These credits may be for activities including the Affordable Housing Bond Aggregator, the Housing Australia Future Fund Facility and the National Housing Accord Facility.

Conclusion

7.39 Schedule 3 to the Bill is compatible with human rights as it supports the right to an adequate standard of living. Compliance cost impact

7.40 Schedule 3 to the Bill does not raise any other human rights issues.

Schedule 4 - Industry codes

Overview

7.41 Schedule 4 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.

7.42 Schedule 4 to the Bill amends Part IVB of the Competition and Consumer Act 2010 (CCA) to:

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increase the penalty to be specified in infringement notices issued in relation to an alleged contravention of a civil penalty provision:

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of an industry code that relates to the industry of food and groceries (and that states that the relevant enabling provision applies)-to 600 penalty units for a body corporate and 12 penalty units otherwise, and

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of any other industry code-to 60 penalty units for a body corporate and 12 penalty units otherwise;

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increase the maximum penalty for contravention of a civil penalty provision that may be prescribed in an industry code relating to the industry of food and groceries, and

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clarify the functions and powers that may be conferred on persons under industry codes.

7.43 Relevantly, Schedule 4 to the Bill increases the maximum civil penalty that may be prescribed in industry codes that relate to the industry of food and groceries; it does not impose any new civil penalties. This is intended to provide the framework to reduce the financial benefits and incentives for persons that engage in conduct that breaches industry codes regulating the industry of food and groceries.

Human rights implications

7.44 Schedule 4 to the Bill engages the right to a fair trial, as well as the presumption of innocence in Articles 14 and 15 of the International Covenant on Civil and Political Rights (ICCPR). Article 14(2) of the ICCPR recognises that all people have the right to be presumed innocent until proven guilty according to the law. Articles 14 and 15 apply only in relation to the rights of natural persons, not legal persons, such as companies.

7.45 Civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the ICCPR. Although there is a domestic law distinction between criminal and civil penalties, 'criminal' is separately defined in international human rights law. Therefore, when a provision imposes a civil penalty, it is necessary to determine whether or not the penalty amounts to a 'criminal' penalty for the purposes of Articles 14 and 15 of the ICCPR.

7.46 Schedule 4 to the Bill provides that an industry code relating to the industry of food and groceries may prescribe a pecuniary penalty of $500,000 for contravention of a civil penalty provision by a person that is not a body corporate. If the $500,000 'higher tier' penalty is not prescribed, the maximum penalty that may be prescribed for contravention of a civil penalty provision by a person that is not a body corporate is 640 penalty units.

7.47 While Schedule 4 to the Bill does not impose any new civil penalties, it permits higher civil penalties to be prescribed in industry codes. The higher tier civil penalty may be viewed as 'criminal' for the purposes of human rights law. This view may be formed as such provisions are deterrent in nature and proceedings would be instituted by a public authority with statutory powers of enforcement. While this may be the case, the civil penalty provisions do not amend or seek to limit any rights of an individual or an applicable legal process.

7.48 Further, the provisions do not apply to the general public, but to a sector or class of people in the industry of food and groceries who should reasonably be aware of their obligations under the CCA. Therefore, imposing these civil penalties will enable an effective disciplinary response to non-compliance.

7.49 While the higher tier civil penalty is large, it is appropriate in size. The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers outlines that larger penalties are more appropriate for bigger entities, as they provide an adequate deterrent.

7.50 Further, the judiciary continues to have discretion to consider the seriousness of the contravention and impose a penalty that is appropriate in the circumstances. The civil courts are experienced in making civil penalty orders at appropriate levels having regard to the maximum penalty amount, taking into account a range of factors including the nature of the contravening conduct and the size of the organisation involved.

7.51 Therefore, a relevant consideration in setting a civil penalty amount is the maximum penalty that should apply in the most egregious instances of non-compliance with the CCA.

7.52 The higher tier civil penalty that can be prescribed in an industry code relating to the industry of food and groceries in accordance with Schedule 4 to the Bill is intentionally significant and is in line with the penalties that may be prescribed in an industry code relating to the industry of franchising under Part IVB of the CCA.

7.53 Finally, there is no sanction of imprisonment for non-payment of these civil penalties.

Conclusion

7.54 Schedule 4 to the Bill is compatible with human rights because, to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

7.55 To the extent that these amendments limit the rights under Article 14 and 15 of the ICCPR, they are compatible with human rights as:

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the increased penalty amounts are aimed at deterring non-compliance with the CCA, and not punitive in nature;

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the maximum penalty amount will only be used in the most egregious instances; and

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the civil penalties are applicable to people who should reasonably be aware of their obligations.

Schedule 5 - Deductible gift recipients

Overview

7.56 Schedule 5 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.

7.57 Schedule 5 to the Bill amends the ITAA 1997 to list Skip Foundation Ltd as a deductible gift recipient.

7.58 Schedule 5 to the Bill amends the ITAA 1997 to remove the following entities as deductible gift recipients:

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Don Chipp Foundation Ltd;

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The Ian Clunies Ross Memorial Foundation;

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Ian Thorpe's Fountain for Youth Limited;

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Layne Beachley - Aim for the Stars Foundation Limited;

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National Congress of Australia's First Peoples Limited;

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Sir William Tyree Foundation;

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SouthCare Helicopter Fund; and

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Lingiari Policy Centre.

Human rights implications

7.59 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

7.60 This Schedule is compatible with human rights as it does not raise any human rights issues.

Schedule 6 Minor and technical amendments

Overview

7.61 Schedule 6 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

7.62 Schedule 6 to the Bill makes a number of miscellaneous and technical amendments to Treasury portfolio legislation. Miscellaneous and technical amendments are periodically made to Treasury portfolio legislation to correct errors and unintended outcomes, make technical changes and improve the quality of Treasury portfolio legislation. The process was first supported by a recommendation of the 2008 Tax Design Review Panel, which considered ways to improve the quality of tax legislation. It has since been expanded to all Treasury legislation.

7.63 Divisions 1 and 2 of Part 1 of Schedule 6 to the Bill amend the corporations legislation, Division 3 of Part 1 amends the FATA, Division 4 of Part 1 amends the PRRTA Act; Part 2 amends the taxation laws; and Part 3 amends the corporations legislation. The miscellaneous and technical amendments maintain and improve the quality of Treasury legislation by:

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enhancing readability and administrative efficiency;

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reducing unnecessary red tape; and

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making other technical changes.

7.64 These changes facilitate a more adaptive, efficient and navigable legislative framework and ensure that the legislative intention is met.

Human rights implications

7.65 Schedule 6 to the Bill does not engage any of the applicable rights or freedoms.

Conclusion

7.66 Schedule 6 to the Bill is compatible with human rights as it does not raise any human rights issues.