House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Skills and Training, the Hon Andrew Giles MP)

NOTES ON CLAUSES

In these notes on clauses, the following abbreviations are used:

Clause 1: Short title

1. This clause provides that the short title of the Bill, once enacted, is the VET Student Loans (Miscellaneous Measures) Act 2025.

Clause 2: Commencement

2. The table in subclause 2(1) provides that the whole of the Bill commences on the day after the Bill receives the Royal Assent.

3. A note to the table in subclause 2(1) provides that the table relates only to the provisions of the Act as originally enacted, and that it will not be amended to deal with any later amendments of the Act.

4. Subclause 2(2) provides that information in column 3 of the table at subclause 2(1) is not a part of the Bill, and information may be inserted in this column, or information in it may be edited, in any published version of the Bill.

Clause 3: Definitions

5. This clause contains key definitions of the terms and expressions used in the Bill. Where a word is not defined, readers should rely on its ordinary meaning, when read in the context of the provisions for which it appears as well as the Bill more broadly.

6. Key definitions from this clause are explained below in alphabetical order.

7. "Deal" with a TFN is defined to mean to require, request, collect, record, store, use or disclose the TFN.

8. "Do a thing" is defined to include make a decision (however described), exercise a power, perform a function, comply with an obligation or discharge a duty and do anything else. "Purport to do a thing" has a corresponding meaning. This definition provides some detail of what this definition includes, but it is not an exhaustive list for this definition.

9. The "relevant period" means the period beginning at the start of 1 January 2017 and ending immediately before 1 October 2025. This period starts when the VET Student Loans program began and ends after the final IT system updates needed to mask student TFNs was in place across the VET Student Loans program's relevant systems.

10. "Relevant person", when read in the context of the Bill, means a person that was the Secretary, the Commissioner, a provider, a Commonwealth officer or an officer of a provider in the relevant period.

11. Subclause 3(2) provides that any expression used in the Bill that is also used in the VSL Act has the same meaning as in that Act.

Clause 4: Authorisation

12. Subclauses 4(1) and 4(2) provide that if at any time during the relevant period, a relevant person dealt with a student's TFN for the purposes of facilitating the administration of or administering the student's application for a VET Student Loan or the loan itself, and the dealing was not authorised by a law of the Commonwealth, then the dealing is taken for all purposes (except for the purposes of rule 13 of the Privacy (Tax File Number) Rule 2015 (TFN Rule) to have been, and to always have been:

•

authorised by the VSL Act (paragraph 4(2)(a)), and

•

in connection with and reasonably necessary for the relevant person's performance of one or more of that person's functions under that Act, (paragraph 4(2)(b)).

13. The purposes set out in paragraph 4(1)(a) are intended to cover actions involved in facilitating the administration of or administering the student's application for a VET Student Loan or the loan itself during the relevant period, including but not limited to:

•

providers reporting student TFNs into relevant government IT systems;

•

providers storing TFNs to facilitate the amendment or cancellation of a VET Student Loan in the future;

•

providers viewing TFNs to ensure their reporting is up to date and accurate and to correct any data validation errors;

•

providers requesting a student quote their TFN for the purpose of including it in an application for a VET Student Loan or to correct errors in the government IT systems for their loan; and

•

departmental officers allowing providers to access TFNs to enable providers to report student TFNs into relevant government IT systems.

14. The authorisation in clause 4 only applies to relevant persons dealing with a student's TFN for the purposes of facilitating the administration of or administering the student's application for a VET Student Loan or the loan itself. The authorisation does not apply to dealing with TFNs for other purposes and it is not intended to cover actions taken in bad faith or the misuse of TFNs. As the relevant period occurred in the past, the authorisation applies retrospectively and to past actions only.

15. Paragraph 4(2)(a) provides the relevant dealing is authorised by the VSL Act. This authorisation is intended to ensure that the relevant dealings with TFNs by a relevant person within the relevant period within the scope of subclause 4(1) would not:

•

be subject to common law claims;

•

result in breaches of APP 3.5 or APP 9.2; nor

•

be considered potential offences under Division 2 of Part 9 of the VSL Act,

due to the relevant dealings being authorised by law, under the VSL Act.

16. Paragraph 4(2)(b) provides that the dealing is taken to have been in connection with and reasonably necessary for the relevant person's performance of one or more of that person's functions under the VSL Act. The effect of this provision, when read together with paragraph 4(2)(a), is that the dealing engages the exception to the prohibition on requiring or requesting a person's TFN under paragraph 8WA(1AA)(b) of the TAA and the exception to the prohibition on the recording, using and divulging of a person's TFN under paragraph 8WB(1A)(b) of the TAA. It also engages APP 3.1 and APP 3.2 by deeming the dealing to have been in connection with and reasonably necessary for the relevant person's performance of one or more of that person's functions. This means that provided the dealings by a relevant person within the relevant period fall within the scope of subclause 4(1), the relevant dealings would not be considered an offence under sections 8WA or 8WB of the TAA, nor would an agency be in breach of APP 3.1 or 3.2.

17. Rule 13 is excluded from subclause 4(2) so that there is no retrospective obligation on the Commissioner of Taxation to have made certain information available with respect to any historical requests for TFNs that would be authorised by this Bill.

18. The authorisation in clause 4 of the Bill will only apply retrospectively, during the relevant period, which is defined in clause 3 of the Bill to mean the period beginning at the start of 1 January 2017 and ending immediately before 1 October 2025. This period starts when the VET Student Loans program began and ends after the final IT change needed to mask student TFNs was in place across the relevant IT systems.

19. It is considered appropriate for the authorisation in the Bill to have retrospective application, so that dealing with TFNs during the relevant period by relevant persons is aligned with legislation and lawful. It is appropriate to authorise relevant persons' past dealings with TFNs (where they fall within the narrow scope of subclause 4(1)), given that these dealings were made in good faith to enable students to access loans through the VET Student Loans program, by facilitating the administration of or administering the students' applications for a VET Student Loan or the loan itself. There are unlikely to be any persons adversely affected by the retrospective operation of the Bill. There are strict use and disclosure provisions that apply to VET information under the VSL Act, which providers must comply with, and providers have been subject to this regime since the VSL Act commenced. Providers, provider officers and Commonwealth officers would benefit from the retrospective operation of the authorisation, so that activities which were undertaken for the purposes of facilitating the administration of or administering the students' applications for a VET Student Loan or the loan itself will be considered lawful and aligned with legislation. The authorisation is only required to apply retrospectively as there have been updates to the program's IT systems which removed the need for providers to deal with student TFNs.

20. Subclause 4(3) provides that the VSL Act is taken to have been and to always have been a taxation law for the purposes of sections 8WA and 8WB of the TAA and the TFN Rule, but excluding rule 13 of that instrument. Rule 13 is excluded so that there is no retrospective obligation on the Commissioner of Taxation to have made certain information available with respect to any historical requests for TFNs that would be authorised by this Bill. The VSL Act is deemed to be a taxation law only for the purposes set out in paragraphs 4(3)(a) and 4(3)(b) and not for any other purposes.

21. The intention with paragraph 4(3)(a) is to confirm that the VSL Act is a taxation law for the purposes of the TAA. When read together with subclause 4(2), this engages the exception to the prohibition on requiring or requesting a person's TFN under paragraph 8WA(1AA)(a) of the TAA and the exception to the prohibition on the recording, using and divulging of a person's TFN under paragraph 8WB(1A)(a) of the TAA. Whilst this is not strictly necessary, given the engagement of the exceptions already under subclause 4(2) alone, it has been included out of an abundance of caution.

22. The intention with paragraph 4(3)(b) is to ensure that the entire VSL Act would fall within the definition of 'taxation law' under the TFN Rule, and not only the provisions for which the Commissioner of Taxation has powers and functions related to the use of TFNs (see the definition of 'taxation law' in section 6 of the TFN Rule). This ensures that dealings by relevant persons within the relevant period that fall within the scope of subclause 4(1) would not be in breach of sections 8 or 10 of the TFN Rule. The TAA itself is a 'taxation law' and the other provisions in the Bill engage relevant exceptions under the TAA, which means the relevant conduct may already be considered compliant with sections 8 and 10 TFN Rule. However, to avoid doubt this additional provision has been included.

23. Subclause 4(4) provides that to avoid any doubt, anything done, or anything purported to have been done, by a person that would have been wholly, or partly, invalid or unlawful except for subsections (2) and (3) is taken for all purposes to be valid and lawful and to have always been valid and lawful, despite any effect that may have on the accrued rights of any person.

24. Subclause 4(5) sets out how the authorisation in the Bill would apply to civil and criminal proceedings and complaints made under the Privacy Act. To the extent that the Bill would apply to the proceedings or complaint, the authorisation in clause 4 would apply to those proceedings or complaints and the matter would be decided, taking into account that authorisation.

25. Paragraph 4(5)(a) provides that the Act would apply in relation to:

•

civil and criminal proceedings instituted before the commencement of the Act and not concluded before the commencement of the Act, and

•

civil and criminal proceedings instituted on or after the commencement of the Act.

26. For example, if proceedings had commenced but not concluded before the commencement of the Act, then the authorisation in clause 4 would apply to those proceedings and would need to be considered by the court when deciding the matter.

27. Paragraph 4(5)(b) provides that the Act would apply in relation to the Privacy Act to:

•

complaints made to the Information Commissioner before the commencement of this Act in relation to which the Information Commissioner has not made a determination before the commencement of the Act, and

•

complaints made to the Information Commissioner on or after the commencement of the Act.

28. For example, if a complaint was made to the Information Commissioner and the Information Commissioner made a determination on the complaint before the commencement of the Act, the authorisation in clause 4 would not be relevant to that complaint. However, if the complaint was made before the commencement of the Act but the Information Commissioner had not made a determination on the complaint before the Act commenced, then the authorisation in clause 4 would need to be considered when making a determination on that complaint.

29. Clause 4 of the Bill provides relevant persons with immunity from liability, but only in narrow circumstances. The immunity would only apply during the relevant period when the relevant persons were dealing with TFNs, for the purpose of facilitating the administration of or administering the students' application for a VET Student Loan or the loan itself. Immunity from liability in these narrow circumstances is appropriate as the relevant dealings had been taken in good faith to allow students to access loans under the VET Student Loans program, and relevant persons were following procedures that were considered to be aligned with legislation at the time. The immunity is provided in a context where there were strict use and disclosure provisions that applied to VET information under the VSL Act, which providers were required to comply with. Providers have been subject to that regime since the VSL Act commenced and remain subject to that regime.

Clause 5: Compensation for acquisition of property

30. Subclause 5(1) provides that the Commonwealth would be liable to pay a reasonable amount of compensation to a person, if:

•

apart from this clause, the operation of clause 4 would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from the person otherwise than on just terms (within the meaning of that paragraph); and

•

the acquisition would be invalid because of paragraph 51(xxxi) of the Constitution.

31. Subclause 5(2) provides that if the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court of Australia for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

32. Clause 5 is intended to require the Commonwealth to pay reasonable compensation to the extent that clause 4 would result in an acquisition of property other than on just terms, including to the extent it extinguishes an accrued or vested cause of action.