House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)

General outline and financial impact

Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024

Outline

This Bill includes a package of reforms to modernise Australia's merger review framework.

The Bill replaces Australia's current approach to merger control with a faster, stronger, simpler, targeted, more transparent and streamlined system that better addresses anti-competitive mergers and acquisitions.

The Bill:

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introduces a requirement for certain acquisitions of shares or assets to be notified to the Commission for assessment prior to completion, with penalties to support compliance;

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establishes a new administrative system where the Commission will undertake an economic and legal assessment of whether the acquisition is likely to substantially lessen competition in a market, or is of public benefit;

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streamlines the assessment of mergers and acquisitions with clear suspensory timelines;

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promotes integrity and good decision-making by providing for review of Commission decisions by the Tribunal;

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enhances transparency through establishment of a public register of notified acquisitions and other procedural safeguards;

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provides that fees are payable for certain actions under the reforms.

Date of effect

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

Part 2 of Schedule 1 to the Bill commences on 1 July 2025.

Part 3 of Schedule 1 to the Bill commences on 1 January 2026.

Part 1 of Schedule 2 to the Bill commences on 1 January 2026.

Parts 2 to 5 of Schedule 2 to the Bill commence the day after Royal Assent.

Proposal announced

This Bill implements the reforms announced by the Government on 10 April 2024 and 'Competition Reform' measure in the 2024-2025 Budget.

Financial impact

Schedule 1 to the Bill is estimated to have the following impact on the underlying cash balance over the forward estimates period:

The financial impact of Schedule 2 is unquantifiable but expected to be small.

Impact Analysis

The Impact Analysis relating to the amendments in this Bill has been included in Attachment A.

Human rights implications

Schedule 1 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 9.

Compliance cost impact

It is estimated that the reforms will result in an overall volume of mandatory notifications similar to current volumes. Based on around 300 annual notifications, the annual cost is estimated to be $10.8 million above the status quo. The number of notifications may be higher than projected, reflecting the uncertainty and difficulty in predicting future merger activity in Australia, which will depend on underlying market conditions.