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House of Representatives

Treasury Laws Amendment (2020 Measures No. 6) Bill 2020

Explanatory Memorandum

(Circulated by authority of the Minister for Housing and Assistant Treasurer, the Hon Michael Sukkar MP)

Glossary

The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation Definition
2020-21 budget time 7.30 pm, by legal time in the Australian Capital Territory, on 6 October 2020
ACCC Australian Competition and Consumer Commission
ACNC Australian Charities and Not-for-profits Commission
ACNC Act Australian Charities and Not-for-profits Commission Act 2012
Bill Treasury Laws Amendment (2020 Measures No. 6) Bill 2020
CC Act Competition and Consumer Act 2010
CDR Consumer Data Right
ITAA 1997 Income Tax Assessment Act 1997
Operator National Redress Scheme Operator
Redress Act National Redress Scheme for Institutional Child Sexual Abuse Act 2018
Redress Scheme National Redress Scheme for Institutional Child Sexual Abuse

General outline and financial impact

Schedule 1 - Temporary full expensing of depreciating assets and other amendments

Schedule 1 to the Bill amends the temporary full expensing and backing business investment provisions in the income tax law to provide greater flexibility for entities to access the concessions. Schedule 1 to the Bill also makes other clarifications to the operation of the temporary full expensing and temporary loss carry back provisions.

Date of effect: The measure commences on the first day of the first quarter after Royal Assent.

Proposal announced: This measure was announced by the Treasurer, the Hon. Josh Frydenberg on 23 November 2020.

Financial impact: This measure is estimated to have the following receipts impact over the forward estimates period ($m):

2020-21 2021-22 2022-23 2023-24
.. -20.0 -30.0 10.0

.. not zero but rounded to zero

Human rights implications: Schedule 1 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.

Compliance cost impact: An exemption from the Regulation Impact Statement requirements applies as this measure is covered by the Prime Minister's exemption for COVID-19 related measures.

Schedule 2 - Amendments of the consumer data right

Schedule 2 to the Bill amends the CC Act by reallocating the responsibility for conducting sectoral assessments and making consumer data rules. Other miscellaneous amendments are also made to the CC Act to assist the clarity and efficiency of the CDR regime.

Date of effect: The amendments in Part 1 of Schedule 2 commence on the day after the Bill receives the Royal Assent. The amendments in Part 2 of Schedule 2 commence on the later of the day after the Bill receives the Royal Assent and 28 February 2021.

Proposal announced: Schedule 2 to the Bill implements the legislative changes required for the National Consumer Data Right - implementation measure from the 2020-21 Budget.

Financial impact: Nil.

Human rights implications: Schedule 2 to the Bill is compatible with human rights, because it engages but does not limit human rights. See Statement of Compatibility with Human Rights - Chapter 5.

Compliance cost impact: Schedule 2 to the Bill has no impact on compliance costs.

The Review into Open Banking in Australia (the Open Banking Report) has been certified as being informed by a process and analysis equivalent to a regulation impact statement for the purposes of implementing the Consumer Data Right and Schedule 2 to the Bill. The Open Banking Report can be found at this link:
https://treasury.gov.au/sites/default/files/2019-03/Review-into-Open-Banking-_For-web-1.pdf.

Schedule 3 - Incentivising charities to join the National Redress Scheme

Schedule 3 to the Bill amends the ACNC Act to incentivise basic religious charities that may be responsible for past institutional child sexual abuse to join the Redress Scheme.

Date of effect: The day after the end of the period of three months beginning on the day the Bill receives Royal Assent.

Proposal announced: This measure was announced by the Assistant Minister for Finance, Charities and Electoral Matters, Senator the Hon Zed Seselja and the Minister for Families and Social Services, Senator the Hon Anne Ruston on 27 November 2020.

Financial impact: This measure is estimated to result in an unquantifiable gain to revenue over the forward estimates period.

Human rights implications: Schedule 3 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 5.

Compliance cost impact: The Office of Best Practice Regulation has certified the amendments in Schedule 3 to the Bill have no more than minor regulatory impacts.

Schedule 4 - Minor and technical amendments

Schedule 4 to the Bill makes a number of minor and technical amendments to various laws in the Treasury portfolio. These amendments are part of the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation.

These amendments make minor and technical changes to correct typographical and numbering errors, bring provisions in line with modern drafting conventions, repeal inoperative provisions, remove administrative inefficiencies, address unintended outcomes and update references, ensuring Treasury laws improve to operate as intended.

Date of effect: Part 1 of Schedule 4 to the Bill commences the day after the Bill receives Royal Assent. Part 2 of Schedule 4 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October after the day the Bill receives Royal Assent. The commencement of several items are contingent on the commencement of the following Acts or schedules within those Acts: Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020; Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019; and Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020.

Proposal announced: This measure was announced on 21 October 2020.

Financial impact: These amendments are estimated to have an unquantifiable impact on receipts over the forward estimates period.

Human rights implications: Schedule 4 to the Bill does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 5.

Compliance cost impact: The amendments have no more than a minor impact on compliance costs.

Chapter 1 - Temporary full expensing of depreciating assets and other amendments

Outline of chapter

1.1 Schedule 1 to the Bill amends the temporary full expensing and backing business investment provisions in the income tax law to provide greater flexibility for entities to access the concessions. Schedule 1 to the Bill also makes other clarifications to the operation of the temporary full expensing and temporary loss carry back provisions.

Context of amendments

1.2 Schedules 2 and 7 to the Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020 amended the income tax law to introduce the temporary loss carry back and temporary full expensing measures.

1.3 Schedule 2 to the Coronavirus Economic Response Package Omnibus Act 2020 amended the income tax law to introduce the backing business investment incentive.

1.4 Temporary full expensing allows eligible businesses to deduct the full cost of eligible depreciating assets that are first held, and first used or installed ready for use for a taxable purpose, between 2020-21 budget time and 30 June 2022. Businesses are also able to deduct the full cost of improvements to these assets and to existing eligible depreciating assets made during this period.

1.5 Temporary loss carry back allows eligible corporate tax entities to carry back a tax loss for the 2019-20, 2020-21 or 2021-22 income year and in effect apply it against tax paid in a previous income year as far back as the 2018-19 income year.

1.6 The backing business incentive allows businesses with an aggregated turnover of less than $500 million in an income year to temporarily deduct capital allowances for depreciating assets at an accelerated rate.

1.7 Together, these measures support Australian businesses to withstand the impacts of COVID-19 on their business, invest, grow and create jobs.

1.8 Following the implementation of the temporary full expensing measure several issues have been identified that need to be addressed in this Schedule to provide greater flexibility to access the concession so that it encourages new investment and delivers significant cash flow benefits to businesses.

1.9 All references to legislation are to the Income Tax (Transitional Provisions) Act 1997 unless otherwise specified.

Summary of new law

1.10 Schedule 1 to the Bill amends the temporary full expensing and backing business investment provisions in the income tax law to provide greater flexibility for entities to access the concessions.

1.11 In particular, Schedule 1 to the Bill:

provides an alternative mechanism to the existing test in the income tax law for working out if the $5 billion threshold applies to qualify for the temporary full expensing concession; and
allows entities to opt out of temporary full expensing and the backing business investment incentives on an asset-by-asset basis.

1.12 In addition, Schedule 1 to the Bill clarifies the intended operation of temporary full expensing by ensuring a balancing adjustment event occurs if a depreciating asset has its decline in value worked out under the temporary full expensing provisions and in a later income year the asset no longer meets the test regarding its use or its location in Australia.

1.13 Schedule 1 to the Bill also makes a minor clarification to the operation of the temporary loss carry back provisions.

Comparison of key features of new law and current law

New law Current law
Alternative test to qualify for full expensing
Schedule 1 to the Bill provides an alternative mechanism to the existing test in the income tax law for working out if the $5 billion threshold applies to qualify for the temporary full expensing concession. No equivalent.

Opting out of temporary full expensing and backing business investment
Schedule 1 to the Bill allows entities to opt out of temporary full expensing and the backing business investment incentives on an asset-by-asset-basis. No opt out of the temporary full expensing concession or backing business investment incentive applies.

Detailed explanation of new law

Alternative test - corporate tax entities with income under $5 billion

1.14 Schedule 1 to the Bill includes an alternative mechanism to the existing test in the income tax law for working out if the $5 billion threshold applies to qualify for the temporary full expensing concession.

1.15 An entity is eligible for temporary full expensing if:

the entity satisfies the existing test in section 40-155 of the existing law (about businesses with turnover under $5 billion); or
the entity satisfies the alternative test in new section 40-157 (about corporate tax entities with income under $5 billion). [Schedule 1, items 5 and 11, paragraphs 40-160(1)(d) and 40-170(1)(c)]

1.16 An entity satisfies the alternative test for an income year if:

the entity is a corporate tax entity at any time in the income year;
the entity's total ordinary and statutory income other than non-assessable non-exempt income is less than $5 billion for either the 2018-19 or the 2019-20 income year (including entities with substituted accounting periods in lieu of 30 June 2020 but only those with income years ending on or before 6 October 2020 (2020-21 Budget night)); and
the total cost of certain depreciating assets first held and used, or first installed ready for use, for a taxable purpose in the 2016-17, 2017-18 and 2018-19 income years (combined) exceeds $100 million.

[Schedule 1, item 4, subsections 40-157(1) and (2)]

1.17 If an entity's income year ends after 2020-21 Budget night under a substituted accounting period in lieu of the income year ending on 30 June 2020, the $5 billion income test applies for the 2018-19 income year only. The exclusion of the 2019-20 income year for late balancing entities with income years ending after 2020-21 Budget night is an integrity measure. It ensures that late balancing entities are not able to optimise or manage their income after Budget night to gain access to the concession. [Schedule 1, item 4, subparagraph 40-157(1)(b)(ii)]

1.18 The requirement to have a minimum total cost of depreciating assets for the 2016-17 to 2018-19 income years ensures that eligible entities have a track record of making substantial investments in Australia. The cost amount is an aggregated amount worked out over those three income years.

1.19 In order to calculate this total cost of investment:

the cost of each depreciating asset is identified by working out its cost (including the second element of the asset's cost) for the income year in which it was held and first used, or first installed ready for use, for a taxable purpose; and
the following costs are excluded - the cost of any intangible assets or depreciating assets that, at the time they were first used or installed ready for use, were not expected to ever be located in Australia or not expected to be used principally in Australia for the principal purpose of carrying on a business.

[Schedule 1, item 4, subsections 40-157(3) and (4)]

Additional exclusions if an entity qualifies for temporary full expensing under the alternative test

1.20 If a corporate tax entity qualifies for temporary full expensing because it applies the alternative test, certain assets do not qualify for temporary full expensing.

1.21 In particular, an asset does not qualify for temporary full expensing if:

it is an intangible asset;
it has been previously held by an associate of the entity (as defined in subsection 995-1(1) of the ITAA 1997); or
it is available for use, at any time in the income year, by an associate of the entity or an entity that is not an Australian resident.

[Schedule 1, items 7 to 10 and 12, subsection 40-160(2), heading to section 40-165, paragraph 40-165(1)(a), section 40-167 and subsection 40-170(1A)]

1.22 The alternative test does not affect the operation of the existing exclusions for assets under the temporary full expensing regime. Those exclusions continue to apply to any entity that qualifies for temporary full expensing by applying the alternative test.

1.23 The new exclusions do not apply to entities that are otherwise eligible for temporary full expensing under the existing law. In particular, if an entity qualifies for temporary full expensing by applying the existing turnover test, the new exclusions do not apply.

Choice to not apply temporary full expensing and the backing business investment incentive

1.24 Schedule 1 to the Bill allows an entity to make an irrevocable choice to opt out of temporary full expensing and the backing business investment incentive on an asset-by-asset basis for the purpose of working out its capital allowance deductions for an income year for each eligible asset. Accordingly, the entity can choose to apply either regime to calculate the decline in value for each eligible asset, but it cannot revoke that choice once it is made. This provides entities with greater flexibility in accessing these concessions. If the entity chooses to opt out of temporary full expensing or the backing business investment for an asset it may then apply the general capital allowance rules for that asset. [Schedule 1, items 2, 3, 6, 13 and 14, paragraph 40-120(1)(d), paragraph 40-160(1)(f), paragraph 40-170(1)(f) and section 40-190]

1.25 In the case of temporary full expensing, an entity makes this choice for a particular depreciating asset for each applicable income year.

1.26 In the case of the backing business investment incentive, an entity makes this choice for a particular depreciating asset for an income year and subsequent income years. The effect of the choice is different in this case because the backing business investment incentive provides for an accelerated decline in value that has an effect for the first income year as well as subsequent income years.

1.27 The choice for both temporary full expensing and the backing business investment incentive must be made in the approved form and must be given to the Commissioner of Taxation by the day the entity lodges its tax return for the income year to which the choice for an asset relates. [Schedule 1, items 2, 3, 6, 13 and 14, paragraph 40-120(1)(d), section 40-137, note to section 40-137, paragraph 40-160(1)(f), paragraph 40-170(1)(f) and section 40-190]

1.28 Under the existing law regarding approved forms, the Commissioner of Taxation may determine the manner in which the choice is required or defer the time for lodgement (among other things) (see sections 388-50 and 388-55 of Schedule 1 to the Taxation Administration Act 1953). This provides flexibility for the form of the election to be made in a way which balances the requirements of the Commissioner of Taxation needed to administer the taxation law, whilst not imposing onerous obligations on affected entities. [Schedule 1, items 3 and 14, note to section 40-137 and note to section 40-190]

1.29 If an entity makes a choice to opt out of temporary full expensing for an income year for an asset, existing sections 40-160 and 40-170 do not apply to work out the decline in value of that asset during the income year. Instead, the entity applies the standard capital allowance rules to work out the deduction for decline in value of that depreciating asset or if applicable, the backing business investment incentive.

1.30 If an entity makes a choice to opt out of the backing business investment concession for an asset, sections 40-130 and 40-135 do not apply to work out the decline in value of that depreciating asset that starts to be used, or installed ready for use, during the income year. Instead, the entity must apply the standard capital allowance rules to work out deductions for decline in value of that asset. As a result, the backing business investment rules cease to apply to that asset in the next income year (even if the entity does not specifically choose to opt out of the backing business investment incentive for that later income year) as the choice is irrevocable for later income years in relation to that asset.

1.31 The opt-out regime for temporary full expensing and the backing business investment incentive provide entities with flexibility to manage their affairs and choose the relevant capital allowance rules that they consider are appropriate in their circumstances for each asset.

Balancing adjustment event if asset is not used for the principal purpose of carrying on a business or is not located in Australia

1.32 Schedule 1 to the Bill clarifies the intended operation of the temporary full expensing provisions so that a balancing adjustment event occurs if a depreciating asset has its decline in value worked out under the temporary full expensing provisions and in a later income year:

either:

-
it becomes not reasonable to conclude that the entity will use the asset principally in Australia for the principal purpose of carrying on a business; or
-
it becomes reasonable to conclude that the asset will never be located in Australia; and

the asset continues to be held, used, or installed ready for use.

[Schedule 1, item 14, subsection 40-185(1)]

1.33 The balancing adjustment event applies in a later income year if a fully expensed asset ceases to be used primarily for carrying on a business and is instead applied for private use before the end of its effective life. It also applies if the asset is relocated outside Australia after it has been fully expensed and before the end of its effective life. Finally, it applies where an asset was intended to be relocated to Australia for business use but this does not occur.

1.34 This balancing adjustment event applies to all assets where their decline in value is worked out under the temporary full expensing regime, including assets that qualify because of the alternative test provided by Schedule 1 to the Bill or are eligible for temporary full expensing under the existing law prior to these amendments.

1.35 If such a balancing adjustment event occurs, the entity is treated in a similar way as if it ceased to use the asset, or have it installed ready for use for any purpose and the entity is expected to not use the asset again or have it installed ready for use again. This ensures that the temporary full expensing deduction is clawed back as intended in these circumstances. [Schedule 1, item 14, subsection 40-185(2)]

1.36 Schedule 1 to the Bill modifies the first element of cost rules in Division 40 of the ITAA 1997 so that the first element of cost of a depreciating asset where a balancing adjustment arises because of the operation of the amendments is the asset's termination value at the time of the event. [Schedule 1, item 14, subsection 40-185(3)]

1.37 If a balancing adjustment event occurs in relation to an asset that had been subject to temporary full expensing, the rules for temporary full expensing set out in Subdivision 40-BB no longer apply to work out the decline in value for that asset for a later income year. In these circumstances, there is nothing to preclude the entity from claiming any other capital allowances it is entitled to for that asset under the income tax law (for example, under the general rules in Division 40 of the ITAA 1997). [Schedule 1, item 14, subsection 40-185(4)]

Minor technical correction

1.38 Schedule 1 to the Bill makes a minor technical amendment to correct the heading to existing subsection 328-181(5) so that it refers to "Low pool value" which is consistent with the heading to section 328-210 of the ITAA 1997. Prior to the amendments, the heading referred to the "Low value pool". [Schedule 1, item 16, heading to subsection 328-181(5)]

Technical clarification - loss carry back

1.39 Schedule 1 to the Bill amends the temporary loss carry back concession in the income tax law to clarify and confirm that the choice under the temporary loss carry back measure must be to carry back a specified fixed dollar amount of an entity's tax loss to an earlier income year. An entity cannot, for example, specify that it will carry back a percentage of a tax loss. [Schedule 1, item 1, subsection 160-15(1) of the Income Tax Assessment Act 1997].

Application and transitional provisions

1.40 Schedule 1 to the Bill commences on the first day of the first quarter after Royal Assent. [Clause 2]

1.41 Whilst these amendments commence prospectively, they apply for a fixed period in relation to the 2019-20 and 2020-21 income years for the backing business investment provisions and also for a fixed period for the 2020-21 and 2021-22 income years for the temporary full expensing measure. However they are generally beneficial in operation and allow greater flexibility for entities to access the temporary full expensing and backing business investment provisions or to choose if they should apply.

1.42 To avoid doubt Schedule 1 contains an application provision that provides that the balancing adjustment event for the temporary full expensing measure applies even if the balancing adjustment event (balancing adjustment time) occurs before the commencement of Schedule 1 to the Bill. [Schedule 1, item 15]

1.43 The balancing adjustment event results in the market value of a depreciating asset being realised and the asset being subject to the standard depreciation rules instead. This is potentially less favourable treatment than if the temporary full expensing regime applied. The balancing adjustment event is an integrity provision that applies from the 2021-22 income year. In limited circumstances this provision may apply retrospectively. This might occur, for example, for early balancing entities in relation to the 2021-22 income year. This potential retrospective application is necessary to prevent depreciating assets being fully expensed and then in a later income year being applied for example solely for private use or removed from Australia or never used in Australia for business purposes.

Chapter 2 - Amendments of the consumer data right

Outline of chapter

2.1 Schedule 2 to the Bill amends the CC Act by reallocating the responsibility for conducting sectoral assessments and making consumer data right rules. Other miscellaneous amendments are also made to the CC Act to assist the clarity and efficiency of the CDR regime.

2.2 All references in this Chapter to legislation are to the CC Act unless otherwise stated.

Context of amendments

2.3 The CDR regime in Part IVD enables individuals and businesses to efficiently and conveniently access information held by businesses about them as consumers and to authorise secure access to this data by specified third parties. Businesses are also required to provide public access to information on specified products they offer.

2.4 Under Part IVD, the Minister may make a legislative instrument that designates a sector of the Australian economy to be subject to the CDR regime. Banking and energy are the first two sectors to be designated.

2.5 Before making a sectoral designation, the Minister must complete a number of tasks, including consulting the ACCC. As part of this consultation, the ACCC must conduct an analysis of specified matters, consult the public and publish a report.

2.6 Part IVD also provides for the ACCC to make CDR rules which set out the means by which the CDR regime is applied across designated CDR sectors.

Summary of new law

2.7 Schedule 2 to the Bill amends the CC Act by reallocating the responsibility for conducting the sectoral assessments that inform the Minister's decision whether to designate a sector of the economy as being subject to the CDR, and making of consumer data rules that govern how the CDR operates in designated sectors. Other miscellaneous amendments are also made to the CC Act to assist the clarity and efficiency of the CDR regime.

Comparison of key features of new law and current law

New law Current law
Sectoral assessment
Before designating a sector, the Minister must be satisfied that the Secretary of the Department has complied with the requirements to arrange a sectoral assessment. Before designating a sector, the Minister must consult with the ACCC.
For the Minister to be satisfied that the Secretary of the Department has arranged a sectoral assessment, the Secretary must arrange for: analysis of the factors that the Minister must consider; consultation about those factors; and the preparation of a report for the Minister about that analysis and consultation.

The Secretary must also publish the report on the Department's website.

When the Minister consults the ACCC, the ACCC must consider the factors that the Minister must consider, and consult the public about those factors. Once the consultation has concluded, the ACCC must report to the Minister about its analysis and consultation and publish that report on the ACCC's website.
CDR rule making
The Minister may make rules for designated sectors. The ACCC may make rules for designated sectors.
Before making the consumer data rules, the Minister is required to consider the same matters that the Minister must consider before designating a sector (but not the factors the Minister considers when determining that data is chargeable), and be satisfied that the Secretary of the Department has arranged for consultation about those factors. Before making the consumer data rules, the ACCC is required to consider the same matters that the Minister must consider before designating a sector (but not the factors the Minister considers when determining that data is chargeable).
For the Minister to be satisfied that the Secretary of the Department has arranged for consultation on the consumer data rules, the Secretary must arrange for consultation with: the public for at least 28 days; the ACCC; the Information Commissioner; the primary regulator of the particular designated sector and any other person prescribed by the regulations.

The Secretary must also arrange for the preparation of a report for the Minister about that analysis and consultation.

The ACCC must consult with the public for at least 28 days on the consumer data rules, and must also consult the Information Commissioner, the primary regulator of the particular designated sector and any other person prescribed by the regulations.
The Minister is unable to make the consumer data rules for at least 60 days from when the rules were released for public consultation. The ACCC is unable to make the consumer data rules for at least 60 days from when the rules were released for public consultation.
N/A The ACCC must, except in emergency circumstances, obtain the Minister's consent prior to making rules.
The Minister may make consumer data rules in emergency situations after consulting with the Information Commissioner, but need not conduct consultation beyond this. The ACCC may make consumer data rules without the Minister's consent in emergency situations after it has consulted with the Information Commissioner, but need not conduct consultation beyond this.
Key miscellaneous amendments
The scope of information that may be subject to the CDR regime includes information of continuing use and relevance held by data holders on the 'earliest holding date'. The scope of information that may be subject to the CDR regime is limited to information that 'began' to be held by data holders on or after the 'earliest holding date'.
Clarifies that if the consumer data rules require data to be disclosed, a data holder cannot charge a fee for the data unless it is chargeable data.
Clarifies that CDR entities are able to engage unaccredited agents to act on their behalf for data handling activities, subject to appropriate controls imposed by the consumer data rules.
The scope of Privacy Safeguard 1 (about requirements for a CDR entity's data management policies) and Privacy Safeguard 2 (about anonymity and pseudonymity of CDR consumers' identity) are extended to apply to accredited persons who may become an accredited data recipient. Privacy Safeguard 1 (about requirements for a CDR entity's data management policies) and Privacy Safeguard 2 (about anonymity and pseudonymity of CDR consumers' identity) apply to accredited data recipients.
Privacy Safeguard 5 (about notification of collection of CDR data) is amended to clarify that it applies to accredited data recipients. Privacy Safeguard 5 (about notification of collection of CDR data) applies to accredited persons.

Reallocation of functions

Sectoral assessment

2.8 The Minister has a number of tasks before designating a sector. Schedule 2 to the Bill replaces the requirement for the Minister to consult with the ACCC, with a requirement that the Minister must be satisfied that the Secretary of the Department has arranged for a sectoral assessment. [Schedule 2, item 30, section 56AD]

2.9 For the Minister to be satisfied that the Secretary of the Department has arranged for a sectoral assessment, the Secretary must arrange for analysis of the factors that the Minister must consider prior to making a designation, and consult with the public about those factors. In practice, this analysis and consultation may be undertaken by a range of Commonwealth entities. For example, this analysis and consultation could be conducted by the Department, or the ACCC. This requirement could be satisfied by a review conducted by a Commonwealth agency that includes the considerations necessary for a CDR sectoral assessment, for example, a Productivity Commission review with sufficient terms of reference. [Schedule 2, item 31, sections 56AE and 56AEA]

2.10 The public consultation must take place for at least 28 days and include making information on the proposed designation available on the Department's website.

2.11 The consultation arranged by the Secretary of the Department must include consultation with the ACCC, Information Commissioner, the primary regulator of the sector the instrument would designate (if there is one) and any persons prescribed by the regulations. When the ACCC is consulted it must analyse the factors the Minister must consider prior to making a designation.

2.12 Once the consultation has concluded, the Secretary of the Department must report to the Minister about the analysis and consultation, and publish the report on the Department's website.

2.13 After the report on the analysis and consultation has been published on the Department's website, the Minister must wait at least 60 days before making a designation instrument. [Schedule 2, item 30, section 56AD]

2.14 Due to the operation of the Acts Interpretation Act 1901, the same process must be followed when an existing instrument is varied or revoked.

2.15 The current procedure for the ACCC to formally recommend the Minister designate a sector has been removed (but as a matter of ordinary practice, the ACCC will continue to be able to discuss a designation if it believes the need arises). References to the repealed provision have also been removed. The Secretary of the Department may now arrange for a sectoral assessment to be conducted other than at the direction of the Minister, and the Minister may choose whether to act on the information provided. [Schedule 2, items 31, 32 and 33, sections 56AE, 56AG and 56AH ]

2.16 The amendments make the provisions sufficiently flexible to allow the conducting of sectoral assessments to remain with the ACCC, but provide greater flexibility as to who may do so. Responsibility for ensuring a sufficient sectoral assessment occurs before any sectoral designation now lies with the Secretary of the Department.

CDR rule making

2.17 Schedule 2 to the Bill reallocates the responsibility for making consumer data rules from the ACCC to the Minister. [Schedule 2, items 34 and 35, section 56BA]

2.18 Before making the consumer data rules, the Minister is required to consider the same matters that the Minister must consider before designating a sector (but not the matters the Minister considers when determining that data is chargeable), and be satisfied that the Secretary of the Department has arranged for consultation and reporting under section 56BQ. [Schedule 2, item 36, section 56BP]

2.19 For the Minister to be satisfied that the Secretary of the Department has arranged for consultation and reporting on the consumer data rules and analysis of the relevant matters, the Secretary must arrange for public consultation to take place for at least 28 days and make information on the proposed consumer data rules available on the Department's website. [Schedule 2, item 36, section 56BQ]

2.20 The consultation arranged by the Secretary of the Department must also include consultation with the ACCC, Information Commissioner, the primary regulator of the particular designated sector (if there is one) and any persons prescribed by the regulations. When the ACCC and Information Commissioner are consulted, they must analyse the factors the Minister must consider prior to making the consumer data rules. [Schedule 2, item 36, sections 56BQ and 56BR]

2.21 The Secretary of the Department may arrange for consultation and the preparation of a report to be conducted by an agency other than Treasury. This could include arranging for this to be conducted by the ACCC (thereby largely preserving the status quo). However, the new provisions provide greater flexibility as to who may be arranged to carry out these tasks, while assigning responsibility for ensuring these matters occur to the Secretary.

2.22 Once the consultation has concluded, the Secretary of the Department must report to the Minister about the analysis and the consultation. [Schedule 2, item 36, section 56BQ]

2.23 The Minister is unable to make the consumer data rules for at least 60 days from when the rules were released for public consultation. [Schedule 2, item 36, section 56BP]

2.24 Rules made under section 56BA are not invalid if there has been a failure to comply with the Minister's tasks under section 56BP, the Secretary's tasks under section 56BQ or the ACCC's or Information Commissioner's tasks under section 56BR. However, as the rules are a legislative instrument under the Legislation Act 2003, they are subject to the scrutiny of Parliament and are disallowable. [Schedule 2, item 36, section 56BTA]

Emergency rules

2.25 The Minister may make emergency rules where the Minister is of the view that making the rules is necessary to avoid a risk of serious harm to the efficiency, integrity and stability of any aspect of the Australian economy or interests of consumers. For example, given the nature of the CDR regime, a significant data breach could be considered to cause serious harm to the interests of consumers. [Schedule 2, item 36, section 56BS]

2.26 Before making emergency rules, the Minister must consider the same kinds of matters the Minister considers when making rules in ordinary circumstances. The Minister must also consult the Information Commissioner before making the emergency rules but need not conduct other consultation beyond this.

2.27 A failure to consult the Information Commissioner does not invalidate the emergency rules. However, if the Minister does not consult the Information Commissioner before making the emergency rules, the rules will cease to be in force 6 months after the day they were made. [Schedule 2, item 36, sections 56BS and 56BT]

Delegation by the Secretary

2.28 The Secretary of the Department may, in writing, delegate all or any of the Secretary's functions or powers to an SES employee, or an acting SES employee, in the Department. [Schedule 2, item 42, section 56GAA]

2.29 In performing a delegated function or exercising a delegated power, the delegate must comply with any written directions of the Secretary.

Disclosure of information to the Secretary

2.30 Schedule 2 to the Bill amends the CC Act so that the ACCC can disclose information to the Secretary of the Department, or an employee of the Department or consultant assisting the Secretary in performing the Secretary's functions, or exercising the Secretary's powers, relating to Part IVD. The information may only be used for the purposes of the CDR and the functions and powers given to the Secretary as part of the CDR regime. [Schedule 2, items 43 and 44, section 157AA]

External dispute resolution schemes

2.31 Consistently with the reallocation of other functions, the ACCC's current functions around recognition of external dispute resolution schemes relating to the CDR regime, may now be undertaken by the Minister. [Schedule 2, items 37 to 40, section 56DA]

CDR functions of Information Commissioner

2.32 The Information Commissioner will now be able to consult with and advise the Secretary of the Department about any matter relevant to the operation of the CDR regime, in addition to the Commissioner's ability to so consult and advise the Minister, ACCC and Data Standards Chair. [Schedule 2, item 41, section 56GA]

Miscellaneous amendments

2.33 Schedule 2 to the Bill makes a number of amendments to the CC Act to assist the clarity and efficiency of the CDR regime.

Earliest holding day for CDR data

2.34 The scope of information that may be subject to the CDR regime has been clarified to ensure that information that is of continuing use and relevance and that is critical to the effective operation of the CDR is captured.

2.35 The designation instrument specifies the 'earliest holding day' applicable to the sector for 'holding' the designated information, rather than 'beginning to hold' the information. If a person holds CDR data on or after the earliest holding day then the person will be a data holder for that data if it is of continuing use and relevance (such as an account number that is still current), and is not about the provision before that earliest holding day of a product or service by (or on behalf of) the person (for example, a transaction on an account). [Schedule 2, items 1 to 3, sections 56AC and 56AJ]

Fee-free data

2.36 Schedule 2 to the Bill clarifies that if data is not listed as chargeable data, and the consumer data rules require the data to be disclosed, then a data holder cannot charge a fee for the data. Where a data holder discloses data voluntarily but pursuant to the consumer data rules, the data holder is permitted to charge a fee for that data. Where a data holder discloses a package of data that includes both fee-free CDR data and CDR data that is provided voluntarily, the data holder is permitted to charge a fee for the data that it discloses voluntarily. [Schedule 2, item 4, section 56AM]

Agents acting on behalf of CDR entities

2.37 It is intended practice for CDR entities to be able to engage other persons to act on their behalf for data handling activities, subject to appropriate controls imposed by the consumer data rules. Subdivision F of Division 1 of Part IVD clarifies that for the purposes of Part IVD and the consumer data rules, conduct done by or to an agent, officer or employee of a CDR entity who is acting within the scope of their actual or apparent authority or employment, is taken to also be done by or to the CDR entity. The agent etc. of the CDR entity may be an accredited person, but it is not necessary for them to be accredited. The consumer data rules may impose requirements on outsourced service provider arrangements that accredited data recipients may enter into to ensure that consumer data is kept safe and secure. To clarify that CDR entities are responsible for the actions of their outsourced service providers, section 56AU provides that a CDR entity, whether a body corporate or not, is ultimately responsible for the actions done by their agents, and that acts done to the agents of CDR entities are taken to be acts done to the entity. [Schedule 2, item 6, section 56AU]

2.38 The scope for the consumer data rules to require a disclosure of CDR data for which there are one or more CDR consumers has been expanded beyond disclosure to one or more of those CDR consumers, an accredited person or a designated gateway (section 56BD(1)(b)). In line with ensuring the use of agents by CDR entities is clearly dealt with, the situation where disclosure to persons acting on behalf of accredited persons and designated gateways is included within the scope of permitted disclosure. Also included is disclosure by a designated gateway to a data holder of the data, in recognition of the fact that in some circumstances CDR data will need to flow in both directions between data holders and designated gateways (for example, when authenticating the identity of a consumer that has made a request for CDR data). [Schedule 2, item 7, section 56BD]

2.39 To enable obligations to be imposed directly upon agents, section 56BJ is amended to provide that consumer data rules can be made requiring agents to do or not do specified things when acting on behalf of CDR entities. This rule making power is intended to complement rules directed at ensuring agents comply with relevant information security, privacy and other obligations imposed on their principal, or impose other appropriate protections on their handling of CDR data if required. [Schedule 2, item 8, section 56BJ]

Privacy Safeguards

2.40 Provisions dealing with when the Privacy Safeguards begin to apply to entities that deal with CDR data, and how they apply, have been amended to ensure they clearly reflect the legislative intent and best practice operation of the safeguards. Accredited persons who plan to receive CDR data should take the necessary steps to ensure they will be able to comply with the Privacy Safeguards when they first begin to receive data. For the purposes of taking these steps and as long as accredited persons hold CDR data, the Privacy Safeguards apply, instead of the Australian Privacy Principles.

2.41 An accredited person should be compliant with Privacy Safeguard 1 (about requirements for a CDR entity's data management policies) as soon as they receive CDR data. Consequently, Privacy Safeguard 1 is intended to apply to all accredited persons rather than only to accredited data recipients, to ensure that all compliance measures have been completed before the entity actually begins to receive any CDR data. Similarly, on the basis that consumers should be able to instruct that their identity be kept unknown from the time they first consent to collection of their data, Privacy Safeguard 2 (about anonymity/pseudonymity of CDR consumers' identity) is intended to apply to all accredited persons rather than only to accredited data recipients. The amendments to sections 56EC, 56ED and 56EE will ensure accredited persons have the necessary policies, practices and systems in place for the proper management of CDR data, including not identifying consumers when requested, in anticipation of receiving CDR data and that there will not be any period of time that an accredited person holds CDR data but is not fully compliant with the Privacy Safeguards. Section 56EA has also been amended to clarify that the Privacy Safeguards apply to accredited persons, rather than accredited data recipients only. [Schedule 2, items 9 to 17, sections 56EA, 56EC, 56ED and 56EE]

2.42 Since Privacy Safeguard 5 (about notification of collection of CDR data) can only apply once CDR data has been collected in accordance with Privacy Safeguard 3, Privacy Safeguard 5 is amended to clarify that it applies to accredited data recipients. [Schedule 2, item 18, section 56EH]

2.43 Data holders are obliged under Privacy Safeguard 11, to ensure CDR data they disclose under the consumer data rules is accurate, up to date and complete (section 56EN(1)) and CDR participants must advise CDR consumers, in accordance with the rules, when they become aware of data being disclosed that was inaccurate, incomplete or not up to date (section 56EN(3)). The participant may then be requested by the consumer to fix the incorrect data and disclose corrected data (section 56EN(4)). Section 56EN is amended so that the consumer's request for correction and the subsequent disclosure of corrected data must be in accordance with the consumer data rules. The rules will cover the requirements for these steps, such as that a valid consent to receive the corrected data is in place, as well as circumstances in which the CDR participant is not required to comply with a request, such as when an accredited data recipient no longer provides relevant CDR services. The amendments to section 56EN will ensure that obligations to keep disclosed CDR data accurate continue, while allowing more tailored procedures on when and how the obligations are met to be provided through the rules. This will allow a greater level of specificity to be achieved on these procedural aspects in the rules than would be possible to provide in the principal legislation. [Schedule 2, items 19 to 21, section 56EN]

2.44 The Information Commissioner may assess whether a CDR participant or designated gateway is complying with the Privacy Safeguards in relation to their handling of CDR data (section 56ER). Section 56ER is amended to provide that it applies to accredited persons, to ensure that this function can be performed in relation to accredited persons who are subject to Privacy Safeguard 1. In addition, Part V of the Privacy Act 1988 is extended to enable the Information Commissioner to handle complaints and undertake investigations regarding an accredited person's compliance with relevant Privacy Safeguards (section 56ET). [Schedule 2, items 22 to 29, sections 56ER and 56ET]

Commonwealth entity data holders and gateways

2.45 Commonwealth entities may be specified as data holders and/or gateways in a designation instrument. In order to be authorised to undertake work to fulfil their obligations as data holders and/or gateways under the CDR regime, such entities are deemed to have the functions necessary to do this. [Schedule 2, item 5, section 56AR]

Concurrent operation of State and Territory laws

2.46 The effective application of the CDR to some sectors, such as the energy sector, under the CC Act will require its concurrent operation with State and Territory-based legislative arrangements.

The Constitution provides that when a law of a State is inconsistent with a law of the Commonwealth, the Commonwealth law prevails and the State law, to the extent of the inconsistency, is inoperative. This applies to both direct and indirect inconsistencies. The test for resolving inconsistencies with Territory laws is similar. 'Indirect' inconsistency arises where a Commonwealth law intends to 'cover the field', or to regulate the particular subject matter to the exclusion of a State or Territory law.

2.47 Schedule 2 to the Bill provides that the CDR provisions are intended to operate concurrently with State and Territory legislation where there is no direct inconsistency. The intention is to prevent a 'cover the field' type of inconsistency arising. In general, this means that a State or Territory law will be able to operate concurrently with the CDR provisions to the extent that it does not alter, impair or detract from the operation of those provisions. [Schedule 2, item 42, section 56GAB]

Application and transitional provisions

2.48 Any consultations by the ACCC regarding sectoral assessments that began before Schedule 2 to the Bill commences will continue to be able to be relied on to support the Minister's designation of a sector under the amended section 56AD. [Schedule 2, item 45(1)]

2.49 Further, consumer data rules in force prior to these amendments commencing will continue to apply after that commencement as if they were rules made by the Minister under the amended section 56BA. [Schedule 2, item 45(2)]

2.50 Any public consultations under section 56BQ(1)(a) that began before these amendments commence will continue as if the Secretary of the Department had arranged for them to begin under the amended section 56BQ(b). [Schedule 2, item 45(3)]

Chapter 3 - Incentivising charities to join the National Redress Scheme

Outline of chapter

3.1 Schedule 3 to the Bill amends the definition of basic religious charity in section 205-35 of the ACNC Act to provide that an entity is not a basic religious charity if:

the entity is identified as being involved in the abuse of a person, either in an application for redress or in response to a request for information from the Operator;
the application for redress relating to the entity has not been withdrawn; and
the entity does not join the Redress Scheme by becoming a participating non-government institution in the Redress Scheme by the relevant day.

3.2 These amendments incentivise basic religious charities that may be responsible for past institutional child sexual abuse to join the Redress Scheme to retain their basic religious charity status.

Context of amendments

3.3 The Redress Scheme was established by the Redress Act on 1 July 2018 in response to recommendations by the Royal Commission into Institutional Responses to Child Sexual Abuse.

3.4 Under the Redress Scheme, survivors of institutional child sexual abuse may receive redress in the form of:

a redress payment of up to $150,000;
counselling and psychological care; and
an optional direct personal response from the responsible participating institution.

3.5 The Redress Scheme operates on an opt-in basis where the responsible participating institution is liable to pay their share of the costs of redress payments and counselling and psychological care.

3.6 Survivors of institutional child sexual abuse cannot obtain redress under the Redress Scheme if none of the institutions responsible for their abuse have joined the Redress Scheme. If there are multiple responsible institutions involved and only some of those institutions have joined the Redress Scheme, the survivor may not be able to obtain the maximum amount of redress that would otherwise be available if all of the responsible institutions had joined the Redress Scheme.

3.7 The issue of institutions failing to join the Redress Scheme was recognised in a report by the Joint Select Committee overseeing the implementation of redress related recommendations of the Royal Commission into Institutional Child Sexual Abuse, Getting the National Redress Scheme right: An overdue step towards justice, tabled in Parliament on 2 April 2019.

3.8 Recommendation 3 of that report recommends the government consider mechanisms and their efficacy, including those available under the Charities Act 2013, to penalise all relevant institutions that fail to join the Redress Scheme. This includes the suspension of all tax concessions for, and the suspension of charitable status of, any institution that could reasonably be expected to join the Redress Scheme.

3.9 On 22 October 2020, the Prime Minister announced in his speech to Parliament that the Australian Government was finalising sanctions for institutions that continue to refuse to join the Redress Scheme, including the withdrawal of their charitable status.

3.10 The amendments in Schedule 3 partially implement the Government's response to this issue. These amendments will be supplemented by a new governance standard to be made for the purposes of subsection 45-10(1) of the ACNC Act, which will require registered entities to take reasonable steps to join the Redress Scheme in certain circumstances.

Summary of new law

3.11 Schedule 3 to the Bill amends the definition of basic religious charity in section 205-35 of the ACNC Act. Under these changes, an entity is not a basic religious charity if:

the entity is identified as being involved in the abuse of a person, either:

-
in an application for redress under section 19 of the Redress Act; or
-
in response to a request for information from the Operator under section 24 or 25 of the Redress Act; and

the application for redress relating to the entity has not been withdrawn under section 22 of the Redress Act; and
the entity is not a participating non-government institution in the Redress Scheme by the relevant day.

3.12 If an entity does not become a participating non-government institution by the relevant day, but does so at a later time, the entity may regain its basic religious charity status at that later time. However, there would be a period where the entity is not a basic religious charity and therefore would need to comply with additional obligations under the ACNC Act, such as the obligation to comply with the governance standards. Failure to comply with these additional obligations during this period could result in the ACNC Commissioner revoking the entity's registration.

Comparison of key features of new law and current law

New law Current law
An entity is also not a basic religious charity if:

the entity is identified as being involved in the abuse of a person, either:

-
in an application for redress under section 19 of the Redress Act; or
-
in response to a request for information from the Operator under section 24 or 25 of the Redress Act; and

the application for redress relating to the entity has not been withdrawn under section 22 of the Redress Act; and
the entity is not a participating non-government institution in the Redress Scheme by the relevant day.

However, if an entity becomes a participating non-government institution after the relevant day, the entity may regain its basic religious charity status for the duration of its participation in the Redress Scheme.

No equivalent.

Under section 205-35 of the ACNC Act, an entity is a basic religious charity if the entity:

is a registered entity;
is registered as an entity with a purpose of advancing religion and is not entitled to be registered as any other subtype of entity; and
the general exclusions in subsections 205-35(2) to (5) do not apply to the entity.

Broadly, the general exclusions prevent entities from being a basic religious charity if the entity is:

a deductible gift recipient;
a body corporate;
in receipt of considerable government grants; or
allowed by the ACNC Commissioner to form part of a reporting group.

Detailed explanation of new law

3.13 Schedule 3 to the Bill amends the ACNC Act to incentivise basic religious charities that may be responsible for past institutional child sexual abuse to join the Redress Scheme.

Which basic religious charities are affected?

3.14 To retain its basic religious charity status, an entity will need to join the Redress Scheme by becoming a participating non-government institution if:

the entity is identified as being involved in the abuse of a person, either:

-
in an application for redress made under section 19 of the Redress Act; or
-
in response to a request for information from the Operator under section 24 or 25 of the Redress Act; and

the application for redress relating to the entity has not been withdrawn under section 22 of the Redress Act.

[Schedule 3, item 1, paragraphs 205-35(6)(a) and (b) of the ACNC Act]

3.15 These provisions capture the primary ways that officers of the Redress Scheme obtain information about whether a particular entity may be an institution that is responsible for abuse of an applicant under the Redress Scheme.

3.16 Many of these entities are expected to be identified in an application for redress made under section 19 of the Redress Act. This reflects that the application form currently requests that applicants provide as much identifying information as possible about each institution that is responsible for bringing the applicant in contact with the person or people who sexually abused them.

3.17 However, there may be circumstances where an application does not provide sufficient information to identify an entity. For example, this could occur because the sexual abuse occurred a long time ago. In those circumstances, the Operator may request that the applicant provide further information under section 24 of the Redress Act. In responding to that request, the applicant may provide sufficient information to identify an entity as being involved in their abuse. Information that is provided in this way is captured by these amendments.

3.18 Similarly, information provided by an entity that has already joined the Redress Scheme (that is, a participating institution in the Redress Scheme) that identifies another entity as being involved in abuse of the applicant is captured by these amendments if that information is provided in response to a request by the Operator under section 25 of the Redress Act. This could occur where an applicant mistakenly identifies a participating institution as being involved in their abuse, the Operator requests information from the participating institution as required under section 25 of the Redress Act, and the participating institution provides information that helps to identify the entity that was involved in the abuse of the person.

3.19 The relevant application for redress does not need to be valid under subsection 19(2) of the Redress Act. For example, if the application does not specify where the applicant lives, but identifies a basic religious charity as being involved in the abuse of the applicant, that basic religious charity would be affected by these new provisions. This ensures that the amendments apply to as many basic religious charities that may be responsible for past institutional child sexual abuse as possible. [Schedule 3, item 1, subsection 205-35(7) of the ACNC Act]

3.20 However, if the relevant application for redress is withdrawn by the applicant under section 22 of the Redress Act, the entity that was identified either in the application or in a subsequent request for information is not required to join the Redress Scheme to retain its basic religious charity status. If the entity has already joined the Redress Scheme, the entity is not required to continue to participate in the Redress Scheme to retain its basic religious charity status.

3.21 This is intended to ensure a balanced approach, so that entities are not unnecessarily required to join the Redress Scheme to retain their basic religious charity status, where there would be no benefit for survivors of institutional child sexual abuse.

3.22 Similarly, where a basic religious charity is mistakenly referred to in an application for redress or in a subsequent response to a request for information - for example, because of a typographical error - and the error is promptly corrected between the applicant and the Redress Scheme, it is not intended that these amendments would be enlivened. That is, the entity that was mistakenly referred to would not be required to join the Redress Scheme to retain its basic religious charity status, provided the entity has not been identified in relation to other applications.

When does an affected entity need to join the Redress Scheme to retain its basic religious charity status?

3.23 To retain its basic religious charity status, an affected entity will need to join the Redress Scheme by becoming a participating non-government institution by a particular day (called the relevant day). To work out the relevant day it is necessary to consider whether the redress application is made before, on or after 1 January 2021. [Schedule 3, item 1, paragraph 205-35(6)(c) of the ACNC Act]

3.24 If a redress application is made before 1 January 2021, and a basic religious charity is identified as being involved in the abuse of the applicant (either in the application or in a subsequent response to a request for information), the entity will have until the later of the following days to become a participating non-government institution before it loses its basic religious charity status:

the day these amendments commence; and
the day after the end of the six month period beginning on the day the application was made.

[Schedule 3, item 1, paragraph 205-35(8)(a) of the ACNC Act]

3.25 This timing gives affected entities at least six months from the date the relevant redress application is made to become a participating non-government institution. It reflects that officers of the Redress Scheme have been working closely with affected entities and will continue to do so to assist them to join the Redress Scheme. Further, many of these affected entities have had a significant period of time to join the Redress Scheme (that is, a period longer than six months from the date of the application). As there are a considerable number of applicants for redress of advanced age or ill health, this timeframe is considered to be appropriate in the circumstances.

3.26 For redress applications made on or after 1 January 2021, to retain its basic religious charity status, the entity must be a participating non-government institution on the later of the day after the end of the six month period that begins:

on the day after the application for redress is made; or
on the day that information is given in response to a request made under section 24 or 25 of the Redress Act.

[Schedule 3, item 1, subparagraphs 205-35(8)(b)(i) to (iii) of the ACNC Act]

3.27 Officers of the Redress Scheme will notify basic religious charities that are not participating non-government institutions that the entity has been identified as being involved in the abuse of an applicant, and the day by which the entity needs to join the Redress Scheme to retain its basic religious charity status. This notification would be given to the affected entity as soon as practicable.

3.28 This gives basic religious charities up to six months to become participating non-government institutions, regardless of whether they were identified in an application for redress or in a subsequent response to a request under section 24 or 25 of the Redress Act.

3.29 However, in practice, because the Minister responsible for administering the Redress Act must declare by notifiable instrument that an institution is a participating institution, entities will have slightly less than six months to take the relevant steps it needs to join the Redress Scheme. However, this timeframe is expected to be sufficient, provided affected entities engage early with officers of the Redress Scheme and do not delay the on-boarding process.

3.30 The amendments also contain a regulation-making power that may be used to prescribe a later relevant day (that is, a day after the six month period) for redress applications made on or after 1 January 2021. This regulation-making power is appropriate as it ensures there is sufficient flexibility for the Government to extend the period for entities to join the Redress Scheme before they lose their basic religious charity status if there are unforeseen difficulties with the six month period. Any regulations made would take into account the effect on survivors of institutional child sexual abuse and be subject to parliamentary scrutiny and disallowance. [Schedule 3, item 1, subparagraph 205-35(8)(b)(iv) of the ACNC Act]

3.31 If a basic religious charity joins the Redress Scheme by becoming a participating non-government institution by the relevant day, the entity will retain its basic religious charity status.

Joining the Redress Scheme after the relevant day

3.32 If an entity subsequently joins the Redress Scheme by becoming a participating non-government institution after the relevant day, the entity may be a basic religious charity again if it still satisfies the existing criteria in section 205-35 of the ACNC Act. [Schedule 3, item 1, subsection 205-35(6) of the ACNC Act]

3.33 This provision ensures there is an ongoing incentive for basic religious charities (or former basic religious charities) who have not joined the Redress Scheme to do so, even if they have failed to join by the relevant day.

3.34 However, there would be a period of time where the entity would not be a basic religious charity. During this period, the entity would be subject to additional obligations under the ACNC Act, including financial reporting requirements and the requirement to comply with the governance standards. These obligations currently apply more broadly to registered entities other than basic religious charities under the ACNC Act.

3.35 Failure to comply with these additional obligations during this period could result in enforcement action being taken by the ACNC Commissioner under Chapter 4 of the ACNC Act, or the ACNC Commissioner revoking the registration of the registered entity. If the entity's registration is revoked, the entity would need to reapply for registration under the ACNC Act.

3.36 Therefore, while it is possible for an entity to become a basic religious charity once more, there is a greater incentive for a basic religious charity to join the Redress Scheme by the relevant day so that it maintains its status (including its registration) without any gaps.

Basic religious charities that do not join the Redress Scheme

3.37 If a basic religious charity has been identified as being involved in the abuse of an applicant and does not join the Redress Scheme by the relevant day, the entity will lose its basic religious charity status.

3.38 Therefore, the obligations set out in paragraph 3.34 would apply to the entity from the day the entity loses its basic religious charity status. Additionally, the entity would need to answer financial information questions in its annual information statement to the ACNC and for medium and large registered entities, provide reviewed or audited financial reports.

3.39 The requirement to comply with the governance standards will include the new governance standard that is proposed to be made for the purposes of subsection 45-10(1) of the ACNC Act, once that standard commences.

3.40 It is proposed that the new governance standard will require registered entities to take reasonable steps to become a participating non-government institution in the Redress Scheme in specified circumstances. Failure to comply with any of the governance standards means that a registered entity is not entitled to be registered under the ACNC Act, which could result in the ACNC Commissioner revoking the entity's registration or taking enforcement action under Chapter 4 of the ACNC Act.

3.41 Necessary information will be exchanged between the Redress Scheme and the ACNC Commissioner to allow the ACNC Commissioner to effectively administer the new provisions. For example, information may be disclosed by officers of the Redress Scheme to enable the ACNC Commissioner to identify which registered entities are no longer basic religious charities. This will be important for the ACNC Commissioner in administering the ACNC Act and assisting registered entities to comply with that Act, as different obligations apply under that Act for basic religious charities and other registered entities.

Application provisions

3.42 The amendments in Schedule 3 commence on the day after the end of the period of three months beginning on the day the Bill receives Royal Assent. This ensures that basic religious charities that may be responsible for past institutional child sexual abuse are incentivised to join the Redress Scheme promptly, while also ensuring affected charities have sufficient notice about these amendments.

3.43 Under section 56A of the National Redress Scheme for Institutional Child Sexual Abuse Rules 2018, the last day for institutions to be declared as participating in the Redress Scheme is currently 31 December 2020. The amendments in Schedule 3 to the Bill will operate in respect of any period in which that date is extended.

Chapter 4 - Minor and technical amendments

Outline of chapter

4.1 Schedule 4 to the Bill makes a number of minor and technical amendments to various laws in the Treasury portfolio. These amendments are part of the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation.

4.2 These amendments make minor and technical changes to correct typographical and numbering errors, bring provisions in line with modern drafting conventions, repeal inoperative provisions, remove administrative inefficiencies, address unintended outcomes and update references, ensuring Treasury laws improve to operate as intended.

Context of amendments

4.3 Minor and technical amendments are periodically made to Treasury legislation to remove anomalies, correct unintended outcomes and generally improve the quality of laws. Making such amendments gives priority to the care and maintenance of Treasury portfolio legislation.

4.4 The process was first supported by a recommendation of the 2008 Tax Design Review Panel, which was appointed to examine how to reduce delays in the enactment of tax legislation and improve the quality of tax law changes. It has since been expanded to all Treasury portfolio legislation.

Summary of new law

4.5 These minor and technical amendments address technical deficiencies and legislative uncertainties in various Treasury laws by:

correcting spelling and typographical errors;
fixing incorrect legislative references;
reducing unnecessary red tape;
addressing unintended outcomes;
adopting modern drafting practices;
enhancing readability and administrative efficiency; and
repealing redundant and inoperative provisions.

Detailed explanation of new law

Part 1 - Amendments commencing the day after Royal Assent

Amendments to the Australian Charities and Not-for-profits Commission Act 2012

4.6 A note has been added to the end of section 60-65 of the Australian Charities and Not-for-profits Commission Act 2012 that cross-references section 175-35 of that Act. Section 60-65 provides that a registered entity must give a corrected information statement or financial report within a certain period if the entity discovers a material error. [Schedule 4, item 1, section 60-65 of the Australian Charities and Not-for-profits Commission Act 2012]

4.7 Section 175-35 of the Australian Charities and Not-for-profits Commission Act 2012 provides for an administrative penalty for failing to give the Commissioner a statement within the required time. The new note therefore guides the reader to a provision that sets out a potential consequence of failing to comply with the requirement in section 60-65. Amendments to the Australian Securities and Investments Commission Act 2001

4.8 Section 12(1) of the Australian Securities and Investments Commission Act 2001 has been amended to remove the requirement for a ministerial direction to be given to ASIC as a 'written direction', and substitute a requirement for directions to be given by legislative instrument. [Schedule 4, item 2, section 12(1) of the Australian Securities and Investments Commission Act 2001]

4.9 Section 12(5) has also been repealed. This has the effect of removing the requirement for ministerial directions to ASIC to be published in the Gazette. [Schedule 4, item 3, section 12(1) of the Australian Securities and Investments Commission Act 2001]

4.10 These amendments update the requirements for the giving of ministerial directions under the Australian Securities and Investments Commission Act 2001 with the framework provided in the Legislation Act 2003, the effect of which is that a requirement to publish or notify in the Gazette is now satisfied if the instrument is registered as a legislative instrument.

4.11 Ministerial directions given under section 12(1) of the Australian Securities and Investments Commission Act 2001 that are in force immediately before the commencement of these amendments, continue to be in force. [Schedule 4, item 4, section 331 of the Australian Securities and Investments Commission Act 2001]

Amendment to the Business Names Registration Act 2011

4.12 The intention of section 88 of the Business Names Registration Act 2011 was to allow entities that are carrying on a business in the Territory of Christmas Island or the Territory of Cocos (Keeling) Islands to obtain a business name without having an Australian Business Number (ABN) on the basis that the definition of 'Australia' in the A New Tax System (Australian Business Number) Act 1999 excludes those territories.

4.13 However, the original definition of 'Australia' in the A New Tax System (Australian Business Number) Act 1999 which excluded any external Territory, was amended by the Treasury Legislation Amendment (Repeal Day) Act 2015.

4.14 The A New Tax System (Australian Business Number) Act 1999 now defines 'Australia', when used in a geographical sense, to have the same meaning as in the Income Tax Assessment Act 1997. Section 960-505(1) of the Income Tax Assessment Act 1997 defines 'Australia', when used in a geographical sense, to include all the external Territories.

4.15 In the context of the A New Tax System (Australian Business Number) Act 1999, the practical implication is that an entity that is carrying on an enterprise in any of Australia's external Territories is now entitled to an ABN. This makes section 88 in the Business Names Registration Act 2011 redundant and no longer applicable. [Schedule 4, item 5, section 88 of the Business Names Registration Act 2011]

4.16 Schedule 1 to the Business Names Registration Act 2011 is amended to update the references to the Co-operatives legislation of States and Territories that have adopted the Co-operatives National Law. [Schedule 4, items 6, 7, 8, 9, 10 and 11 paragraphs (1)(a), (2)(a), 5(a), 6(a), 7(a), and 8(a) of Schedule 1 to the Business Names Registration Act 2011]

Amendments to the Commonwealth Grants Commission Act 1973

4.17 Section 5(2) of the Commonwealth Grants Commission Act 1973 is amended by replacing two occurrences of the expression 'the Northern Territory' with 'that Territory'. This minor amendment makes an improvement to the readability of the provision. [Schedule 4, item 12, section 5(2) of the Commonwealth Grants Commission Act 1973]

4.18 Various amendments are made to sections 8, 9A, 11, 12, 13, 14, 15, 19, 23, 24 and 25 of the Commonwealth Grants Commission Act 1973 to replace instances of the expressions 'he or she', 'his or her' and 'him or her' with their gender neutral equivalents so that the provisions are consistent with current Commonwealth drafting practice. [Schedule 4, items 13 to 22, 24, 25 and 27 to 29, sections 8(3), 8(6A), 9, 9A(1), 11(1), 12(7), 13(1)(c) and (2)(c), 14(5), 15(1), 19(1) and (2), 23(1), 24 and 25(3) of the Commonwealth Grants Commission Act 1973]

4.19 A technical amendment is made to the heading of section 16AA of the Commonwealth Grants Commission Act 1973 to better reflect the text of the provision and make it consistent with similar provisions such as sections 16 and 16A. [Schedule 4, item 23, section 16AA of the Commonwealth Grants Commission Act 1973]

4.20 Section 19 of the Commonwealth Grants Commission Act 1973 is also amended by inserting a new subsection (2A) to clarify that a determination made under section 19(1) is not a legislative instrument. This is not a substantive exception to the Legislation Act 2003 as the determination would not otherwise be a legislative instrument for the purposes of that Act, rather, the subsection is included for the assistance of readers of the legislation. [Schedule 4, item 26, section 19(2A) of the Commonwealth Grants Commission Act 1973]

Amendments to the Competition and Consumer Act 2010

4.21 Section 4B of the Competition and Consumer Act 2010, which provides a definition of 'consumer', is amended to provide that it has the same meaning as in section 3 of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010. A consequential amendment to section 56AI(4) has also been made. [Schedule 4, items 30 and 31, sections 4B and 56AI(4) of the Competition and Consumer Act 2010]

4.22 This amendment will ensure that the meaning of 'consumer' remains consistent with the definition in the Australian Consumer Law.

4.23 Section 90(7)(a) of the Competition and Consumer Act 2010 allows the Commission, if satisfied in all circumstances, to authorise conduct that would not, or is unlikely to, substantially lessen competition. Section 90(8) sets out specific provisions for which section 90(7)(a) does not apply. Section 90(7)(a) does not apply to the extent of excluded conduct in an application to authorise conduct.

4.24 Section 90(8) is amended to clarify that section 90(7)(a) will not apply if the conduct for which authorisation is sought includes cartel conduct, secondary boycott conduct, conduct within sections 45E or 45EA or resale price maintenance. This removes ambiguity about whether section 90(7)(a) applies to individual types of conduct within an application. [Schedule 4, item 32, section 90(8) of the Competition and Consumer Act 2010]

4.25 Section 154G(1)(d) of the Competition and Consumer Act 2010 is amended to bring the Australian Competition and Consumer Commission's powers into line with new technological arrangements by allowing officers to operate electronic equipment at a business premises to determine whether evidential material is accessible, whether the data is held at the premises or not (for example on cloud based servers). [Schedule 4, item 33, section 154G(1)(d) of the Competition and Consumer Act 2010]

4.26 Section 154V(3) of the Competition and Consumer Act 2010 is amended to correct a grammatical error in the section heading by substituting the word 'Affect' with 'Effect'. [Schedule 4, item 34, section 154V(3) of the Competition and Consumer Act 2010]

4.27 Sections 260 and 268 of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 are amended to clarify the operation of law in relation to consumer guarantees. It clarifies that multiple failures to comply with the Australian Consumer Law consumer guarantees can amount to a major failure. [Schedule 4, item 35 to 38, sections 260 and 268 of Schedule 2 of the Competition and Consumer Act 2010]

4.28 The amendment adds an additional threshold test to both the definitions of major failure in sections 260 and 268. The additional threshold test makes it clear that a failure to comply with a relevant consumer guarantee will be a major failure:

if it is one of a series of failures; and
a reasonable consumer would not have acquired the good or service at the time of supply if they were aware of the nature and extent of the failures to comply with the consumer guarantees, taken as a whole.

4.29 These amendments apply in relation to goods and services supplied under a contract entered into on or after the day Schedule 4 to the Bill commences. [Schedule 4, item 39, section 303 in Schedule 2 to the Competition and Consumer Act 2010]

Amendments to the Corporations Act 2001

4.30 Section 9 of the Corporations Act 2001 incorrectly cross-references to the definition of 'Commission delegate' in the Australian Securities and Investments Commission Act 2001. The Australian Securities and Investments Commission Act 2001 does not have a definition of 'Commission delegate'. The correct reference is to the definition of 'ASIC delegate' in the Australian Securities and Investments Commission Act 2001. The Corporations Act 2001 is updated to reference the definition of 'ASIC delegate' in the Australian Securities and Investments Commission Act 2001. Consequential amendments have also been made to section 106 and section 1315(1)(b) to refer to 'ASIC delegate' rather than 'Commission delegate'. [Schedule 4, items 40, 41, 43, 44, 50 and 114, sections 9, 106 and 1315(1)(b) of the Corporations Act 2001]

4.31 Paragraph (c) of the definition of 'professional investor' in section 9 of the Corporations Act 2001 refers to 'a body registered under the Financial Corporations Act 1974'. The Financial Corporations Act 1974 was repealed in 2001 by the Financial Sector (Collection of Data-Consequential and Transitional Provisions) Act 2001. This amendment fixes this incorrect cross-reference by substituting a new paragraph (c) that refers to 'a registered entity within the meaning of the Financial Sector (Collection of Data) Act 2001', which is the current Act. [Schedule 4, item 42, section 9 of the Corporations Act 2001]

4.32 Sections 761EA(10)(b) and 985M(6)(b) of the Corporations Act 2001 currently state have a reference to the Legislative Instruments Act 2003. The Legislative Instrument Act 2003 has been replaced by the Legislation Act 2003. The amendments correct the citations to the short title of the Legislation Act 2003. [Schedule 4, item 45 and 47, sections 761EA(10)(b) and 985M(6)(b) of the Corporations Act 2001 ]

4.33 Section 850B(2) of the Corporations Act 2001 is amended to refer to section 42 of the Legislation Act 2003, instead of Part 5 of the Legislative Instruments Act 2003. The Legislative Instrument Act 2003 has been replaced by the Legislation Act 2003, therefore, the amendment corrects the citation to the short title of the Legislation Act 2003 and a cross-reference [Schedule 4, item 46, section 850B(2) of the Corporations Act 2001]

4.34 Section 1017BB(5AA) is amended to make a technical correction by placing the heading 'Definitions' in its correct position. Currently, section 1017BB(5AA) contains civil penalty provisions. Section 1017BB(6) contains the definitions for that section, therefore, the heading was intended to be with that subsection rather than section 1017BB(5AA). [Schedule 4, items 48 and 49, sections 1017BB(5AA) and 1017BB(6) of the Corporations Act 2001]

4.35 Technical amendments are made to the table in section 1317E(3). The amendments reflect current Commonwealth drafting practice to use a lower case letter for the first letter in the word 'subsection', rather than a capital letter. [Schedule 4, items 51 to 54, section 1317E(3) of the Corporations Act 2001]

4.36 Technical amendments are made to paragraphs 32(1)(a) to (j) in Schedule 4 to the Corporations Act 2001 by adding a semi-colon at the end of those paragraphs for consistency with current Commonwealth drafting practice. [Schedule 4, item 55, sections 32(1)(a) to (j) in Schedule 4 to the Corporations Act 2001]

Amendments to the Life Insurance Act 1995

4.37 Section 200(2)(b) of the Life Insurance Act 1995 is amended to remove the requirement of physical endorsement of the assignment of a life insurance policy and to enable endorsement by electronic means. Physical endorsement of the assignment of life insurance policy is no longer required given technological changes. [Schedule 4, item 56, section 200(2)(b) of the Life Insurance Act 1995]

4.38 These amendments apply in relation to a policy issued before, on or after the commencement of Part 1 of this Schedule. [Schedule 4, item 145(1)]

4.39 Sections 211(1)(b) and 212(1)(b) of the Life Insurance Act 1995 are amended to increase the threshold for payments without probate from $50,000 to $100,000. The increase in the threshold recognises the original amounts are no longer sufficient given the effect of inflation. [Schedule 4, item 57, sections 211(1)(b) and 212(1)(b) of the Life Insurance Act 1995]

4.40 Section 213(7) of the Life Insurance Act 1995 is amended to increase the prescribed amount from $25,000 to $50,000. Section 213 allows an insurance company to make a life insured a policy owner, if the original policy owner has died, and the life insured satisfies the company that they would be entitled to the policy proceeds under the original policy owner's will or probate rules. Previously, the policy amount would need to be less than the prescribed amount of $25,000. This will now be increased to $50,000. The increase in the threshold recognises the original prescribed amount is no longer sufficient given the effect of inflation. [Schedule 4, item 58 , section 213(7) of the Life Insurance Act 1995]

Amendments to the National Consumer Credit Protection Act 2009

4.41 Section 167(3)(d) of the National Consumer Credit Protection Act 2009 has been amended to correct a grammatical error. The item omits 'court in foreign country' and substitutes it with 'court in a foreign country'. [Schedule 4, item 59, section 167(3)(d) of the National Consumer Credit Protection Act 2009]

4.42 In section 194(3), (4) and (5) in Schedule 1 to the National Consumer Credit Protection Act 2009, 'etc' is updated to 'etc.', consistent with current Commonwealth drafting practice. [Schedule 4, item 60, sections 194(3), (4) and (5) in Schedule 1 to the National Consumer Credit Protection Act 2009]

Amendments to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009

4.43 Sub-item 4(2) of Schedule 8 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 is amended to correct a citation error. The sub-item has been amended to refer to the National Consumer Credit Protection Act 2009, rather of the National Consumer and Credit Protection Act 2009 (without italics). [Schedule 4, item 61, sub-item 4(2) of Schedule 8 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009]

Amendments to the Superannuation Guarantee (Administration) Act 1992

4.44 Section 23(12) of the Superannuation Guarantee (Administration) Act 1992 is amended to clarify that the ordinary time earnings base is only reduced by an amount of excluded salary or wages if that amount has been included as part of the ordinary time earnings base. This is to ensure that the ordinary time earnings base cannot be reduced by an amount of excluded salary or wages that is not otherwise included in the base. [Schedule 4, item 62, section 23(12) of the Superannuation Guarantee (Administration) Act 1992 ]

4.45 Section 26(1) of the Superannuation Guarantee (Administration) Act 1992 is also amended to clarify that the only time a period is not to be counted as a period of employment as a result of that section is only when the amounts paid to an employee in that period are excluded salary or wages. This is to ensure that a period over which an employee receives salary or wages that are not excluded is still counted as a period of employment, irrespective of whether the employee also receives excluded salary or wages over that same period. An employee's period of employment is relevant in working out a reduction of charge percentage in relation to defined benefit superannuation schemes under section 22. [Schedule 4, item 63, section 26(1) of the Superannuation Guarantee (Administration) Act 1992]

4.46 Section 27(2) of the Superannuation Guarantee (Administration) Act 1992 is amended to extend its application to amounts that remain after excluding any salary or wages under section 27(1). This ensures that any remaining amount that is less than $450 in a calendar month is also considered excluded salary or wages for the purpose of calculating individual superannuation guarantee shortfalls. [Schedule 4, item 64, section 27(2) of the Superannuation Guarantee (Administration) Act 1992]

Amendments to the Superannuation Industry (Supervision) Act 1993

4.47 The MySuper charging rules in section 29VA(9) of the Superannuation Industry (Supervision) Act 1993 have been amended to allow the trustee of a fund who offers a MySuper product to charge a greater number of differentiated investments fees to the different subclasses of members who hold the MySuper product. [Schedule 4, items 65 to 69, definition of 'lifecycle exception' in section 10, sections 29TC and 29VA of the Superannuation Industry (Supervision) Act 1993)]

4.48 Currently, the governing rules of a superannuation fund are restricted to identifying no more than four different age cohorts in relation to which different investment fees can be charged under section 29VA(9). This is despite the fact that section 29TC(2) permits funds to use 'lifecycle' differentiated products to stream gains and losses to a greater number of subclasses of members who hold a MySuper product, provided that those subclasses are based on age and other prescribed factors.

4.49 The amendments update section 29VA(9) to allow different investment fees to be charged to each subclasses of members that a fund is permitted to stream different gains and losses to in accordance with its governing rules. This allows investment fees charged by a fund to a MySuper member to be based on the actual investment activity undertaken for that subclass of member, instead of all subclasses having to be categorised into one of up to four age cohorts. The changes generally expand, rather than limit, the groups of members who can be charged differentiated fees under section 29VA(9). This is because funds can generally stream gains and losses to a greater number of subclasses than the four age cohorts to which they can charge fees. However, to the extent that a fund's governing rules do not currently permit them to stream gains and losses to a particular age cohort, the fund can no longer charge different fees to that cohort. Such funds must instead charge fees to one of the relevant subclasses, or in accordance with one of the other charging rules in section 29VA.

4.50 Consistent with the existing requirement in section 29VA(9)(d), any such costs must continue to be attributed between subclasses on a fair and reasonable basis.

4.51 The amendments apply to fees relating to MySuper products during a period that begins on or after the amendments commence. This ensures that the new charging rules only begin to apply from the start of a period over which fees are charged, rather than midway through such a period. [Schedule 4, sub-item 145(2)]

4.52 Sections 68AAA, 68AAB, 68AAC of the Superannuation Industry (Supervision) Act 1993 have been amended to allow elections regarding the provision of insurance under sections 68AAA, 68AAB and 68AAC of that Act to remain in force.

4.53 Under the current legislation, when undergoing successor fund transfers as part of an internal restructure of merging funds, successor fund trustees are unable to rely on elections or notifications made by members to the trustee of the transferring fund.

4.54 The amendments allow the provisions to be relied upon by a trustee of the successor fund as an election given to the trustee of the successor fund following a successor fund transfer. The election continues in force through a chain of successor fund transfers. [Schedule 4, items 70 to 72, sections 68AAA(2A), 68AAB(3A), and 68AAC(3A) of the Superannuation Industry (Supervision) Act 1993]

4.55 Elections made, including elections deemed to be made, under the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 and the Treasury Laws Amendment (Putting Members' Interests First) Act 2019 are captured by the amendments. These earlier elections remain in force and can be relied upon by a trustee of the successor fund.

4.56 The definition of 'member or beneficiary report' in section 105(3)(a) of the Superannuation Industry (Supervision) Act 1993 is amended to omit the reference to Superannuation (Excluded Funds) Taxation Act 1987, as this is now outdated. This reference will be replaced with the Superannuation (Self Managed Superannuation Funds) Taxation Act 1987, which is the relevant legislation currently in force. [Schedule 4, item 73, the definition of 'member or beneficiary report' in section 105(3) of the Superannuation Industry (Supervision) Act 1993]

Amendments to the Superannuation (Unclaimed Money and Lost Members) Act 1999

4.57 Section 20QA(1)(a)(ix) of the Superannuation Unclaimed Money and Lost Member Act 1999 is amended to provide that an account is not an 'inactive low balance account' if the member has elected to maintain insurance on that account under section 68AAB(2) of the Superannuation Industry (Supervision) Act 1993. [Schedule 4, item 74, section 20QA(1)(a)(ix) of the Superannuation (Unclaimed Money and Lost Members) Act 1999]

4.58 The amendment to section 20QA(1)(a) provides that an account for a member who is under 25 years old is not an 'inactive low balance account' if the member has elected to maintain insurance cover under section 68AAC(2) of the Superannuation Industry (Supervision) Act 1993. [Schedule 4, item 75, section 20QA(1)(a) of Superannuation (Unclaimed Money and Lost Members) Act 1999]

4.59 These amendments apply retrospectively from 1 April 2020. This is to ensure that the balance in an account which a member has elected to maintain an insurance cover is not paid to the Commissioner of Taxation from the date when the new circumstances in Treasury Laws Amendment (Putting Members' Interests First) Act 2019 apply. The retrospective application of these amendments do not disadvantage anyone and ensures that the law operated as intended. [Schedule 4, item 145(3)]

Amendments to the Taxation Administration Act 1953

4.60 Part IVC of the Taxation Administration Act 1953 provides a framework for how a taxpayer may seek review of an Australian Taxation Office decision, for example, in relation to an assessment of tax or a private ruling. It allows a taxpayer to object against the decision, and where they are dissatisfied with the Commissioner's objection decision, allows them to seek review of that decision in either the Administrative Appeals Tribunal or the Federal Court.

4.61 Under Part IVC, as currently drafted, the ability for a dissatisfied taxpayer to object against a relevant decision must be provided for in an Act (including the provision as applied by another Act) or in regulations relating to taxation. The ability to specify the availability of review under Part IVC is not extended to any other decisions made under other legislative instruments, such as guidelines or rules.

4.62 The amendment made to section 14ZL of the Taxation Administration Act 1953 broadens the types of law that can allow a dissatisfied taxpayer to seek review of a decision under Part IVC to include legislative instruments. [Schedule 4, item 76, section 14ZL of the Taxation Administration Act 1953]

4.63 The current limitation in section 14ZL to regulations, reflects the fact that regulations were the only significant kind of legislative instrument under the tax law when Part IVC was introduced. The amendment allows for all legislative instruments relating to taxation to provide for review, under the Part IVC framework.

4.64 Section 284-75(4)(b)(iii) of Schedule 1 to the Taxation Administration Act 1953 is amended to correct a technical error. This amendment ensures that the administrative penalty covered by that provision correctly applies in relation to false or misleading statements made by the recipient of an offshore supply of low value goods, as originally intended.

4.65 Section 284-75(4) imposes administrative penalties for making certain false or misleading statements, relating to taxation laws, to persons other than the Commissioner of Taxation or entities exercising powers or performing functions under taxation laws. That provision, through subparagraph (4)(b)(iii), imposes a penalty for making a false or misleading statement as to whether a supply is connected with the indirect tax zone for the purposes of goods and services tax law because of Subdivision 84-C of the A New Tax System (Goods and Services Tax) Act 1999.

4.66 Subdivision 84-C results in the imposition of goods and services tax on certain supplies of low value goods imported into Australia. It does this by providing that an offshore supply of low value goods is connected with the indirect tax zone if the recipient of the supply is a consumer of the supply.

4.67 Section 284-75(4)(b)(iii) of Schedule 1 to the Taxation Administration Act 1953 is intended to ensure that a recipient of an offshore supply of low value goods does not misrepresent facts leading a supplier to falsely believe that the supply is not connected with the indirect tax zone, and therefore not subject to goods and services tax.

4.68 However, section 284-75(4)(b)(iii) refers to 'a supply made by you'. A supply is made to the recipient of a supply, rather than by the recipient of the supply. This amendment corrects this technical error in the provision, to ensure the penalty applies to false or misleading statements made by the recipient of the supply. [Schedule 4, item 77, section 284-75(4)(b)(iii) of Schedule 1 to the Taxation Administration Act 1953]

4.69 Subdivision 396-C of Schedule 1 to the Taxation Administration Act 1953 requires Australian Financial Institutions to give the Commissioner certain information about accounts of foreign residents, based on the Common Reporting Standard. The Common Reporting Standard is an Organisation for Economic Co-operation and Development (OECD) standard.

4.70 Currently, self-managed superannuation funds and small superannuation funds are excluded from these reporting requirements as Non-Reporting Financial Institutions. This amendment will remove this exclusion, but will introduce an equivalent exclusion for the accounts of these funds. Following the amendments, self-managed superannuation fund accounts and small superannuation fund accounts will be excluded from these reporting requirements as Excluded Accounts.

4.71 This amendment is not intended to substantively alter the reporting requirements in respect of these funds. This is a technical amendment, intended to ensure consistency of these provisions with the Common Reporting Standard. [Schedule 4, items 78 and 79, sections 396-115(1)(a) and (3)(aa) and (ab) of Schedule 1 to the Taxation Administration Act 1953]

4.72 Subdivision 396-C of Schedule 1 to the Taxation Administration Act 1953 requires Australian Financial Institutions to give the Commissioner certain information about accounts of foreign residents, based on the Common Reporting Standard. The Common Reporting Standard is an OECD standard.

4.73 Section 396-130(1) is an anti-avoidance provision for this Subdivision, which enables the Commissioner to require an entity to treat an account as a Reportable Account where a transaction or arrangement has been made for the purpose, or the dominant purpose, of causing the account not to be a Reportable Account. Currently, this anti-avoidance provision only applies to transactions and arrangements made by the Reporting Financial Institution or the Account Holder.

4.74 This anti-avoidance provision is being amended to cover transactions and arrangements made by intermediaries of those parties, or by any other entity. This amendment will ensure a broad application of this anti-avoidance provision, as envisaged by the Common Reporting Standard. [Schedule 4, item 80, section 396-130(1)(d) of Schedule 1 to the Taxation Administration Act 1953]

Repeal of redundant legislation

4.75 The following amending Acts within the Treasury portfolio are repealed:

Bills of Exchange Act 1971;
Census and Statistics Act 1920;
Census and Statistics Act 1930;
Commonwealth Grants Commission Act 1976;
Commonwealth Inscribed Stock Act 1913;
Excise Act 1962;
Income Tax Assessment Act (No. 2) 1969;
Income Tax (International Agreements) Act 1960;
International Finance Corporations Act 1961;
International Finance Corporation Act 1963;
International Finance Corporation Act 1966;
Sales Tax Assessment Act (No. 1A) 1930;
Sales Tax (Exemptions and Classifications) Act 1960;
States Grants (Coal Mining Industry Long Service Leave) Act 1961;
States Grants (Coal Mining Industry Long Service Leave) Act 1968;
States Grants (Petroleum Products) Act 1969;
States Grants (Petroleum Products) Act (No. 2) 1965; and
Trade Practices Act 1975.

[Schedule 4, item 81]

4.76 This amendment repeals legislation that is no longer operational.

Part 2 - Amendments commencing first day of the next quarter

Amendments to the Income Tax Assessment Act 1997

4.77 A consequential amendment has been made to table item 1.5 in section 40-10 of the Income Tax Assessment Act 1997 as a result of amendments made by the Treasury Laws Amendment (Supporting Australian Farmers) Act 2018, which amended the tax law to allow fodder storage assets to be deducted immediately instead of over three years. The amendment ensures the table item correctly reflects that fodder storage assets can be deducted immediately. This amendment does not affect the operation of the law as section 40-10 is an outline that summarises the provisions in Division 40 and is not operative. [Schedule 4, item 82, section 40-10 of the Income Tax Assessment Act 1997]

4.78 Section 116-30 of the Income Tax Assessment Act 1997 has been amended to ensure that the market value substitution rule does not prevent the intended operation of the non-arm's length income rules in Subdivision 295-H.

4.79 The non-arm's length income rules compare an entity's actual income with the income that would be consistent with an arm's length dealing. This comparison could be substantially frustrated if the market value substitution rule replaced the capital proceeds from a CGT event with the relevant market value because in most situations the market value would be close to the proceeds in an arm's length dealing. However, in some situations, such as an asset transfer that preserves an asset's cost base in a successor fund transfer, an arm's length dealing may involve a transfer not at current market value. For this reason, the amendment compares the capital proceeds to both non-arm's length income and market value rather than market value alone.

4.80 Where merging superannuation funds transfer assets and losses under the provisions of Division 310 of the Income Tax Assessment Act 1997, the non-arm's length income rules in section 295-550 will not apply if the circumstances of the transaction are consistent with an arm's length dealing, even if the merger is between funds with the same trustee and the assets are transferred at a value or cost base that is different from market value.

4.81 The amendment provides that the capital proceeds from a CGT event should not be replaced with market value of the CGT asset if the proceeds exceed the market value and they are not received at arm's length. [Schedule 4, item 83, section 116-30(2B) of the Income Tax Assessment Act 1997]

4.82 This amendment applies to income years starting on or after the day after the Bill receives the Royal Assent. [Schedule 4, item 146(1)]

4.83 Section 118-320 of the Income Tax Assessment Act 1997 has been amended to ensure that the non-arm's length income rules in subdivision 295-H operate as intended in relation to segregated current pension assets to discourage shifting of amounts into the superannuation environment through non-arm's length transactions.

4.84 The non-arm's length income rules in section 295-550 apply to ordinary income or statutory income. However, if a complying superannuation entity has a capital gain from a CGT event happening in relation to a segregated current pension asset, section 118-320 causes the capital gain to be disregarded. Thus, there is no amount of statutory income corresponding to the potential capital gain to which the non-arm's length income rules could apply.

4.85 The amendment provides that non-arm's length capital gains are not disregarded. This means that they remain statutory income and the non-arm's length income rules can apply to them (with taxation at the highest marginal tax rate discouraging the non-arm's length transfer of assets into the superannuation environment). [Schedule 4, items 84 and 85, section 118-320 of the Income Tax Assessment Act 1997]

4.86 The amendment applies to income years starting on or after the day after the Bill receives the Royal Assent. [Schedule 4, item 146(2)]

4.87 Section 230-365 of the Income Tax Assessment Act 1997 is amended to align its language with that in the updated accounting standard for hedge effectiveness (AASB 9). AASB 9 refers to "hedge effectiveness requirements" while the earlier standard (AASB 139) required an expectation that the hedge will be "highly effective". The amendment removes the word "highly" from section 230-365 to ensure consistency with the new accounting standard. [Schedule 4, item 86, section 230-365 of the Income Tax Assessment Act 1997]

4.88 These amendments apply for the purposes of determining whether the requirement of section 230-365 of the Income Tax Assessment Act 1997 is met in relation to a hedging financial arrangement on or after 1 January 2021 (regardless of whether an entity started to have hedging financial arrangements before, on or after day day). [Schedule 4, item 146(3)]

4.89 Section 295-495 of the Income Tax Assessment Act 1997 is amended to confirm that a superannuation fund or RSA provider cannot claim a deduction for a payment to a person under an income stream because of the person's temporary inability to engage in gainful employment. This is intended to clarify that the law operates with the same result both before and after the Tax Laws Amendment (Simplified Superannuation) Act 2007 repealed provisions from the Income Tax Assessment Act 1936 and re-enacted those provisions into the Income Tax Assessment Act 1997. This amendment has no effect on the operation of section 295-470 of the Income Tax Assessment Act 1997.

4.90 Prior to their repeal by the Tax Laws Amendment (Simplified Superannuation) Act 2007, sections 280, 287 and 299E of the Income Tax Assessment Act 1936 excluded the ability to deduct amounts in respect of benefits (including the temporary benefits referred to in the previous paragraph). Section 295-495 of the Income Tax Assessment Act 1997 was inserted to re-enact provisions of the Income Tax Assessment Act 1936 including sections 280, 287 and 299E.

4.91 As indicated by the explanatory memorandum to the Tax Laws Amendment (Simplified Superannuation) Bill 2006, that Bill was not intended to change the law as it operated prior to the re-enactment of those provisions. However, due to items 1 to 3 of the table in section 295-495 applying to 'superannuation benefits', those items currently do not cover a payment to a person under an income stream because of the person's temporary inability to engage in gainful employment (as was covered by the repealed sections). This is due to the exclusion of these payments from being superannuation benefits by section 307-10(a) of the Income Tax Assessment Act 1997.

4.92 This amendment inserts a new item into the table in section 295-495 of the Income Tax Assessment Act 1997 to prevent a deduction from being claimed for payments of these temporary benefits. This ensures that the law operates in the same way both before and after the Tax Laws Amendment (Simplified Superannuation) Act 2007 amendments. For this reason, this amendment applies in relation to the 2007-2008 income year and later years. This is the same income year from which the Tax Laws Amendment (Simplified Superannuation) Act 2007 amendments applied (see sub-item 2(1) of Schedule 1 to that Act). [Schedule 4, items 87 and 146(4), item 6 of the table in section 295-495 of the Income Tax Assessment Act 1997]

4.93 The circumstances in which a superannuation provider is entitled to a tax offset for no-TFN contributions income under Subdivision 295-J of the Income Tax Assessment Act 1997 have been extended.

4.94 Currently, the tax offset is only available to the superannuation provider that had previously paid tax on no-TFN contributions in relation to an individual member. The offset is the amount of the tax that was paid in the three income years preceding the income year in which the individual first quotes their TFN to the superannuation provider. Where a member is transferred to another superannuation provider because of a successor fund transfer, the new provider is currently not entitled to a tax offset for tax paid by the original provider.

4.95 The amendments allow a superannuation provider that is a successor fund to another superannuation provider (the original provider) to claim the tax offset in an income year for no-TFN tax previously paid by the original provider in certain circumstances. The circumstances are where the original provider paid tax in any of the previous three income years or relevant part years for an amount of no-TFN contributions income of an individual, the individual had never quoted their tax file number to the earlier fund, and has quoted it to the successor fund for the first time in the income year. [Schedule 4, item 101, section 295-675(4) and (5) of the Income Tax Assessment Act 1997]

4.96 These requirements are consistent with the existing conditions for a superannuation provider being entitled to the tax offset, but adapted to reflect that there has been a successor fund transfer. The changes ensure that the successor fund is entitled to the same tax offset that the original provider would have been entitled to in relation to a member that is transferred between the providers because of successor fund transfer. As with superannuation providers that currently receive the tax offset, the general obligations applicable to superannuation providers require the benefit of the offset be allocated to the relevant member on a fair and reasonable basis.

4.97 The amendments address the possibility that the income years of the original provider and the successor fund are not aligned. If this is the case, the tax offset is available for the no-TFN tax that was payable by the original provider in the income years starting or ending in the income year of the successor fund in which the TFN is provided. This ensures there is no part-year gap in which a no-TFN tax was payable but an offset is not available because a successor fund transfer occurred.

4.98 The amendments provide two sets of eligibility conditions that are separately applicable to superannuation providers that are superannuation funds and RSA providers. This reflects that the tax offset is applicable to both superannuation funds and RSA providers. The term 'superannuation provider' and 'successor fund' are existing defined terms in section 995-1(1) of Income Tax Assessment Act 1997 that apply to superannuation funds and RSA providers.

4.99 The amendments re-write the conditions for the existing tax offset and re-insert the existing note to the provisions. These changes are necessary to restructure the provision to accommodate the new eligibility conditions. The heading to Subdivision 295-J is also updated to reflect the new provisions. These changes do not alter the scope or operation of the existing provisions. [Schedule 4, items 88 to 91, Subdivision 295-J (heading), sections 295-675(1) to (3), note to section 295-675(1) of the Income Tax Assessment Act 1997]

4.100 The amendments apply from the 2020-21 income year, meaning that superannuation providers that are a successor fund who have a TFN quoted for the first time in the 2020-21 income year are able to claim the tax offset for tax paid by an original provider from the 2017-18 income year. [Schedule 4, item 146(5)]

4.101 Column 2 of table item 5 in section 307-5(1) of the Income Tax Assessment Act 1997 is amended to include superannuation amounts paid by the Commissioner of Taxation under sections 24NA(2), (3) or (4) of the Superannuation (Unclaimed Money and Lost Members) Act 1999 in the "unclaimed money payment" benefit type. This ensures that such payments are non-assessable non-exempt income under section 306-5 of the Income Tax Assessment Act 1997. [Schedule 4, item 92, column 2, table item 5 in section 307-5(1) of the Income Tax Assessment Act 1997]

4.102 Various amendments to the Income Tax Assessment Act 1997 have been made to ensure superannuation benefits which are payments by the Commissioner of Taxation under sections 24NA(2), (3) or (4) of the Superannuation (Unclaimed Money and Lost Members) Act 1999 consist of the appropriate tax free component and taxable component. The amendments also ensure that the taxable component of such superannuation benefits consists of the appropriate element taxed in the fund and element untaxed in the fund. [Schedule 4, items 93 to 98, sections 307-120, 307-142 and 307-300 of the Income Tax Assessment Act 1997]

4.103 These amendments apply from 13 March 2019 as this was when section 24NA was inserted into the Superannuation (Unclaimed Money and Lost Members) Act 1999 by the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019. The retrospective application of these amendments do not disadvantage anyone and ensures that the relevant law operated as intended. [Schedule 4, item 146(6)]

4.104 The Arts Minister may now delegate their powers under six provisions in Division 376 of the Income Tax Assessment Act 1997 to the Secretary, an SES employee or acting SES employee in the Department administered by the Arts Minister. The powers to be delegated are:

the issue of a certificate and the determination of qualifying Australian production expenditure for the location offset (sections 376-20 and 376-30);
the issue of a certificate and the determination of qualifying Australian production expenditure for the PDV offset (sections 376-45 and 376-50); and
the corresponding powers to refuse and revoke such certificates (sections 376-235 and 376-245).

[Schedule 4, item 99, section 376-247 of the Income Tax Assessment Act 1997]

4.105 Section 820-935(3) of the Income Tax Assessment Act 1997 is amended to add the United Kingdom to the list of foreign jurisdictions within the provision. This amendment ensures that, following the withdrawal of the United Kingdom from the European Union, the United Kingdom's accounting standards for the preparation of financial statements continue to be recognised for the purposes of the thin capitalisation worldwide gearing debt test. [Schedule 4, item 100, section 820-935(3)(aa) of the Income Tax Assessment Act 1997]

4.106 This amendment applies in relation to financial statements prepared before or after the commencement of Schedule 4. This ensures there is no period of time in which the United Kingdom's accounting standards are not recognised for the purposes of the thin capitalisation worldwide gearing debt test. [Schedule 4, item 146(7)]

4.107 An incorrect reference in section 830-15 of the Income Tax Assessment Act 1997 has been corrected. The provision currently refers to 'former subsection 485AA(1) of the Income Tax Assessment Act 1936'. The corrected reference is 'former subsection 485AA(2) of the Income Tax Assessment Act 1936.' [Schedule 4, item 101, section 830-15 of the Income Tax Assessment Act 1997]

Amendments to the Tax Agent Services Act 2009

4.108 Sections 20-5(1)(c), (2)(d) and (3)(e) of the Tax Agent Services Act 2009 provide respectively for an individual, partnership or company to be eligible to be registered as an agent or adviser under that Act if the individual, partnership or company maintains, or will be able to maintain, professional indemnity insurance that meets the Tax Practitioners Board's requirements.

4.109 This eligibility criterion is amended to clarify that, on an application for the renewal of an existing registration, the individual, partnership or company must already maintain such professional indemnity insurance at the time of applying for the renewal in order to be eligible for registration. [Schedule 4, items 102 to 104, section 20-5 of the Tax Agent Services Act 2009]

4.110 This amendment will apply to any application for renewal that has not yet been decided, whether made before, on or after the commencement of the amendment. [Schedule 4, item 146(8)]

4.111 An application for renewal of a registration for an agent or adviser under the Tax Agent Services Act 2009 must currently be made at least 30 days before the day on which the registration expires (with late applications able to be allowed by the Board). This application period is amended to provide that applications must be made at least 30 days, but no more than 90 days, before the expiry of the registration (with early or late applications able to be allowed by the Board).

4.112 An application may currently be made to the Administrative Appeals Tribunal to review a decision of the Board not to allow a late application. A consequential amendment to this provision will allow applications to be made to the Tribunal to also review a decision of the Board not to allow an early application. [Schedule 4, items 105, 106 and 110, sections 20-50(1) and 70-10(d) of the Tax Agent Services Act 2009]

4.113 This amendment will apply to any application for renewal that has not yet been decided, whether made before, on or after the commencement of the amendment. [Schedule 4, item 146(8)]

4.114 Section 20-50(2) of the Tax Agent Services Act 2009 currently provides that where a tax practitioner has applied to the Board to renew their registration, their registration is taken to continue until that application has been decided.

4.115 Section 20-50(2) of the Tax Agent Services Act 2009 is amended to provide that a practitioner's registration is taken to continue until a decision is made or the practitioner withdraws their application, whichever occurs first. [Schedule 4, item 107, section 20-50(2) of the Tax Agent Services Act 2009]

4.116 This amendment does not alter the fundamental or substantive operation of the law but rather provides clarity about the circumstances in which a tax practitioner can continue to act while their application to renew their registration is being processed.

4.117 Sections 40-5, 40-10 and 40-15 of the Tax Agent Services Act 2009 allows the registration of tax agents, BAS agents and tax (financial) advisers to be terminated. Currently the Tax Practitioners Board must terminate a registration if it has been surrendered unless the Board considers that, due to a current investigation or the outcome of an investigation, it would be inappropriate to do so.

4.118 Amendments have been made to sections 40-5, 40-10 and 40-15 of the Tax Agent Services Act 2009 to include an additional limb that allows the Tax Practitioners Board not to terminate a registration on a surrender notice. The amendments provide that the Tax Practitioners Board is not required to terminate a registration on a surrender notice if the Board decides to commence an investigation within 30 days after receiving the surrender notice. [Schedule 4, item 109, sections 40-5(3)(b), 40-10(2A)(b) and 40-15(2A)(b) of the Tax Agent Services Act 2009]

4.119 This will ensure that a tax agent, BAS agent or tax (financial) adviser cannot frustrate a potential investigation by seeking termination of their registration first.

4.120 New Subdivision 70-F is being inserted into the Tax Agent Services Act 2009 to provide for how documents may be given to entities under that Act. Under these provisions, entities will nominate physical, postal or electronic addresses for the service of notices under that Act, and then how service may be given in each case (including to companies in liquidation or administration). These provisions are similar to provisions in Division 195 of the Australian Charities and Not-for-profits Commission Act 2012. [Schedule 4, item 111, sections 70-60 and 70-65 of the Tax Agent Services Act 2009]

4.121 These provisions will apply in any case where documents are required to be given under the Tax Agent Services Act 2009, including where notices are given by the Board. For example, this will include where the Board notifies an applicant of the decision on an application for registration, or where the Board notifies an entity that an investigation of the entity has commenced.

4.122 A consequential amendment has been made to require agents and advisers registered under the Tax Agent Services Act 2009 to notify the Board if there is a change in an address for service previously given to the Board. [Schedule 4, item 108, section 30-35 of the Tax Agent Services Act 2009]

Part 3 - Amendments with other commencements

Amendments to the Corporations (Aboriginal and Torres Strait Islander) Act 2006, Corporations Act 2001 and Income Tax Assessment Act 1936

4.123 Section 163(4) of the Corporations Act 2001 is amended to require that a change of identity application lodged by a corporation must meet any requirements of the data standard. [Schedule 4, item 115, section 163(3) of the Corporations Act 2001]

4.124 Section 346A(1A) of the Corporations Act 2001 is repealed to reflect that ASIC may comply with its obligations to give an extract of particulars electronically without the need for an agreement under section 352(1). [Schedule 4, item 116, section 346A(1A) of the Corporations Act 2001]

4.125 Section 446A of the Corporations Act 2001 is amended to enable notices of a deemed resolution to be lodged with the Registrar and must comply with the data standards. [Schedule 4, items 117 and 118, section 446(5)(a) and 446A(8) of the Corporations Act 2001]

4.126 Section 491(2)(a) of the Corporations Act 2001 is amended to provide that notices of a resolution under section 491(2)(a) are lodged with the Registrar. Further amendments to section 491 ensures the notice must meet the data standards. [Schedule 4, items 119 and 120, sections 491(2)(a) and 491(3) of the Corporations Act 2001]

4.127 The amendments are required to ensure the registries modernisation framework established by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 operates as intended. They are consequential as a result of amendments to be made by that Act.

4.128 New provisions are inserted into section 1272 of the Corporations Act 2001 to allow the Registrar to request from a person who is applying for a director identification number, their tax file number as part of that application for the purposes of confirming the person's identity. Similar provisions have also been inserted into the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and the Income Tax Assessment Act 1936. [Schedule 4, items 112, 113, 123, 124 and 126, sections 308-5(1) and 308-5(5) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006, sections 1272(1) and (5) of the Corporations Act 2001 and section 204 of the Income Tax Assessment Act 1936]

4.129 The amendments to the Corporations (Aboriginal and Torres Strait Islander) Act 2006 allowing the Registrar to request an applicant's tax file number refer to the Commonwealth Registrar as established under the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020. This means that under the Corporations (Aboriginal and Torres Strait Islander) Act 2006, the Commonwealth Registrar will be responsible for applications for a director identification number.

4.130 Section 1653(4), which is to be inserted into the Corporations Act 2001 on the commencement of Schedule 2 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020, is amended to correct an incorrect cross-reference to reference section 1272C(2)(a)(ii) rather than section 1272C(2)(b). [Schedule 4, item 125, section 1653(4) of the Corporations Act 2001]

4.131 The amendments are required to ensure the registries modernisation framework established by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 operates as intended. They are consequential as a result of amendments to be made by that Act.

4.132 The amendments commence at the same time as the relevant items in the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020.

4.133 A punctuation error in section 994F(5)(b) of the Corporations Act 2001 has been corrected by replacing a full stop in the middle of the provision with a comma. Section 994F(5) will be inserted into the Corporations Act 2001 when Schedule 1 to the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 commences. This amendment will commence immediately after that commencement. [Schedule 4, item 121, section 994F(5)(b) of the Corporations Act 2001]

4.134 A consequential amendment to section 1053A(d) of the Corporations Act 2001 is made as a result of amendments made by the Civil Law and Justice Legislation Amendment Act 2018, which renumbered section 90MZB of the Family Law Act 1975 as section 90XZB. The consequential amendment ensures that section 1053A(d) of the Corporations Act 2001 reflects the renumbered provision and that therefore eligible persons listed in section 90XZB of the Family Law Act 1975 are able to make superannuation complaints under the Australian Financial Complaints Authority scheme. [Schedule 4, item 122, section 1053A(d) of the Corporations Act 2001]

4.135 There is a further consequential amendment to section 1053A(d) of the Corporations Act 2001 as a result of amendments to be made by the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019. [Schedule 4, item 122, section 1053A(d) of the Corporations Act 2001]

4.136 The Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Bill 2019 implements a referral of powers from Western Australia by introducing Part VIIIC in the Family Law Act 1975, which applies specifically to Western Australian de facto couples who wish to split their superannuation interests. Part VIIIC is broadly equivalent to Part VIIIB of the Family Law Act 1975, which contains superannuation splitting provisions that apply to married and de facto couples in other jurisdictions.

4.137 The consequential amendment ensures that section 1053A(d) of the Corporations Act 2001 includes a reference to section 90YZR of the Family Law Act 1975 (which is the provision applying for Western Australian de facto couples, equivalent to section 90XZB that applies for other jurisdictions). This ensures that Western Australian de facto couples who are 'eligible persons' within the meaning of section 90YZR of the Family Law Act 1975 are able to make superannuation complaints under the Australian Financial Complaints Authority scheme in the same circumstances as married and de facto couples in other jurisdictions.

Amendments to the Superannuation Industry (Supervision) Act 1993

4.138 A number of amendments have been made to sections 126A, 344 and 345 to ensure that the Registrar is able to review decisions. [Schedule 4, items 127 to 141, sections 126A, 344 and 345 of the Superannuation Industry (Supervision) Act 1993]

4.139 The amendments are required to ensure the registries modernisation framework established by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 operates as intended. They are consequential as a result of amendments to be made by that Act.

4.140 The amendments commence at the same time as the relevant item in Schedule 1 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020.

Amendments to the Taxation Administration Act 1953

4.141 Section 269-50 in Schedule 1 to the Taxation Administration Act 1953 is amended to remove the reference to ASIC and replace it with the Registrar. [Schedule 4, item 142, section 269-50 of Schedule 1 to the Taxation Administration Act 1953]

4.142 A new provision is inserted into Division 355 to ensure that the Commissioner of Taxation can share information with the Registrar if the disclosure relates to the performance of the Registrar's functions, or the exercise of the Registrar's powers, in relation to an entity, and the Commissioner has been appointed as the Registrar. The disclosure can be made to Registrars established under Acts that rely on a state referral. The disclosure is limited to a case where the Commissioner is appointed Registrar, ensuring appropriate safeguards on the sharing of protected tax information. [Schedule 4, items 143 and 144, section 355-67 of Schedule 1 to the Taxation Administration Act 1953]

4.143 The amendments commence at the same time as the relevant item in Schedule 1 to the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020.

Chapter 5 - Statement of Compatibility with Human Rights

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

Schedule 1 - Temporary full expensing of depreciating assets and other amendments

5.1 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.

Overview

5.2 Schedule 1 to the Bill amends the temporary full expensing and backing business investment provisions in the income tax law to provide further flexibility for entities to access the concessions. Schedule 1 to the Bill also makes other clarifications to the operation of the temporary full expensing and temporary loss carry back provisions.

Human rights implications

5.3 Schedule 1 to the Bill does not engage any of the applicable rights or freedoms.

Conclusion

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

Schedule 2 - Amendments of the consumer data right

Overview

5.5 Schedule 2 to the Bill amends the CC Act by reallocating the responsibility for conducting sectoral assessments and making consumer data rules. Other miscellaneous amendments are also made to the CC Act to assist the clarity and efficiency of the CDR regime. These include amendments to the Privacy Safeguard provisions.

Human rights implications

5.6 Article 17 of the International Covenant on Civil and Political Rights (ICCPR) prohibits unlawful or arbitrary interferences with an individual's privacy, family, home or correspondence. It also provides that everyone has the right to the protection of the law against such interference or attacks.

5.7 This right is engaged by Schedule 2 to the Bill because CDR provisions dealing with when Privacy Safeguards begin to apply to entities that deal with CDR data, and how they apply, have been amended to ensure they clearly reflect the legislative intent and best practice operation of the safeguards.

5.8 However, the right is enhanced, not limited by these amendments because they strengthen Privacy Safeguards by:

requiring all accredited persons, not just accredited data recipients, to comply with both Privacy Safeguard 1 (requirements for a CDR entity's data management policies) and Privacy Safeguard 2 (anonymity/pseudonymity of CDR consumers' identity);
enabling the Information Commissioner to assess whether a CDR participant (including, as a result of these amendments, an accredited person) is complying with the Privacy Safeguards in relation to their handling of CDR data; and
enabling the Information Commissioner to handle complaints and undertake investigations regarding an accredited person's compliance with relevant Privacy Safeguards.

5.9 The right to protection from arbitrary or unlawful interference with privacy under Article 17 of the ICCPR is therefore engaged but not limited by these amendments.

Conclusion

5.10 Schedule 2 to the Bill is compatible with human rights, because it engages but does not limit human rights. Schedule 3 - Incentivising charities to join the National Redress Scheme

5.11 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.

Overview

5.12 Schedule 3 to the Bill amends the definition of basic religious charity in section 205-35 of the ACNC Act so that an entity is not a basic religious charity if:

the entity is identified as being involved in the abuse of a person, either:

-
in an application for redress under section 19 of the Redress Act; or
-
in response to a request for information from the Operator under section 24 or 25 of the Redress Act; and

the application for redress relating to the entity has not been withdrawn under section 22 of the Redress Act; and
the entity does not join the Redress Scheme by becoming a participating non-government institution by the relevant day.

5.13 The purpose of these amendments is to incentivise basic religious charities to join the Redress Scheme if the charity may be responsible for institutional child sexual abuse.

Human rights implications

5.14 The amendments in Schedule 3 to the Bill engage the following human rights and freedoms:

the right to state-supported recovery for child victims of abuse under Article 39 of the Convention on the Rights of the Child; and
the right to protection from arbitrary or unlawful interference with privacy under Article 17 of the International Covenant on Civil and Political Rights.

Right to state-supported recovery for child victims of abuse

5.15 The amendments in Schedule 3 to the Bill promote the right to state-supported recovery for child victims of neglect, exploitation and abuse under Article 39 of the Convention on the Rights of the Child by incentivising basic religious charities to join the Redress Scheme.

5.16 The Redress Scheme supports the recovery of people who have experienced institutional child sexual abuse by enabling recognition of past abuse and providing access to redress, including counselling and psychological care services.

5.17 Incentivising additional entities to join the Redress Scheme, which is administered by the Australian Government, will result in more people being able to access redress under the Redress Scheme.

Right to protection from arbitrary or unlawful interference with privacy

5.18 The amendments in Schedule 3 to the Bill engage the right to protection from arbitrary or unlawful interference with privacy in Article 17 of the International Covenant on Civil and Political Rights as:

officers of the Redress Scheme will need to contact a basic religious charity to advise that an application for redress has been received in relation to the entity, to give the entity an opportunity to join the Redress Scheme before losing its basic religious charity status;
officers of the Redress Scheme will need to provide information to the ACNC Commissioner to allow the ACNC Commissioner to effectively administer the new provisions; and
the ACNC may need to liaise with an entity about whether it is a basic religious charity.

5.19 These exchanges of information may involve personal information within the meaning of the Privacy Act 1988.

5.20 The purpose of these exchanges of information is to allow the new provisions to operate effectively. For example, the disclosure of information from officers of the Redress Scheme to the ACNC Commissioner ensures the ACNC Commissioner knows which registered entities are no longer basic religious charities. This will be important for the ACNC Commissioner in administering the ACNC Act, as different obligations exist under that Act for basic religious charities and other registered entities.

5.21 The protected information regime in the Redress Act would apply to the use and disclosure of much of this information. Additionally, the obligations under the Privacy Act 1988 relating to the collection, use and integrity of personal information applies to officers of the Redress Scheme, the ACNC, and a number of affected charities.

5.22 To the extent the amendments in Schedule 3 to the Bill interfere with privacy, that interference is reasonable and proportionate to the legitimate objective of incentivising basic religious charities to join the Redress Scheme.

Conclusion

5.23 Schedule 3 to the Bill is compatible with human rights because it promotes the protection of human rights, and to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate to the legitimate objective of encouraging basic religious charities to join the Redress Scheme.

Schedule 4 - Minor and technical amendments

5.24 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.

Overview

5.25 Schedule 4 to the Bill makes a number of minor and technical amendments to various Treasury portfolio laws. These amendments are part of the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation.

5.26 The minor and technical amendments correct typographical and numbering errors, bring provisions in line with modern drafting conventions, repeal inoperative provisions or Acts, remove administrative inefficiencies and unintended consequences, update references, and ensure that the law gives effect to the original policy intention.

Human rights implications

5.27 Schedule 4 to the Bill engages the following human rights and freedoms:

the right to a fair trial under Article 14(1) of the International Covenant on Civil and Political Rights (ICCPR); and
the right to protection from arbitrary or unlawful interference with privacy under Article 17 of the ICCPR.

Right to a fair trial

5.28 The amendment made to section 14ZL of the Taxation Administration Act 1953 by item 76 broadens the types of law that can allow a dissatisfied taxpayer to seek review of a decision under Part IVC to include legislative instruments.

5.29 This amendment promotes the right to a fair trial under Article 14(1) of the ICCPR. This right is a fundamental part of the rule of law and the proper administration of justice. It provides that all persons are equal before the courts and tribunals and have access to justice.

5.30 Under Part IVC, as currently drafted, the ability for a dissatisfied taxpayer to object against a relevant decision must be provided for in an Act (including the provision as applied by another Act) or in regulations relating to taxation. The ability to specify the availability of review under Part IVC is not extended to any other decisions made under other legislative instruments, such as guidelines or rules.

5.31 The amendment provides taxpayers with greater access to justice by broadening the scope of circumstances under which a dissatisfied taxpayer may seek review of a decision made under Part IVC of the Taxation Administration Act 1953.

Right to protection from arbitrary or unlawful interference with privacy

5.32 The amendments to Division 355 of the Taxation Administration Act 1958 inserted by items 143 and 144 engage the right to protection from unlawful or arbitrary interference with privacy under Article 17 of the ICCPR by allowing the Commissioner of Taxation to disclose protected tax information to the Registrar.

5.33 The amendments allow the sharing of protected tax information with the Registrar. The amendments are being made to ensure that the registries modernisation framework, to be inserted by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020, can operate as intended.

5.34 The amendments are consistent with the right to protection from unlawful or arbitrary interference with privacy because disclosures of personal information will only be made if it relates to the performance of the Registrar's functions, or the exercise of the Registrar's powers, in relation to an entity. Further, disclosure is limited to instances where the Commissioner of Taxation is appointed Registrar. This ensures that the ability to share protected tax information is proportionate to the achieving the policy intent of an effectively functioning Registrar.

5.35 Similarly, amendments that are being made to Part 6.7A of the Corporations (Aboriginal and Torres Strait Islander) Act 2006, Part 9.1A of the Corporations Act 2001 and Part VA of the Income Tax Assessment Act 1936, inserted by items 112, 113, 123, 124 and 126 engage the same right to protection from unlawful or arbitrary interference with privacy. These amendments however, relate to the sharing of tax file numbers.

5.36 The amendments allow the Registrar to request, but not compel, a person who is applying for a director identification number to provide their tax file number for the purposes of confirming the person's identity and allows the sharing of tax file numbers between the Commissioner of Taxation and Commonwealth Registrar for the purposes of fulfilling the Registrar's duties. The amendments are being made to ensure that the registries modernisation framework, to be inserted by the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020, can operate as intended.

5.37 The amendments are consistent with the right to protection from unlawful or arbitrary interference with privacy because the Registrar may only request, and not compel, the person to supply their tax file number. Further, the Registrar's ability to make this request is limited in its scope and may only be made for the purposes of establishing a person's identity. The amendments achieve the legitimate objective of ensuring the Registrar is able to function effectively, and are proportionate to that objective by providing limitations on the use of the power.

5.38 The sharing of tax file numbers between the Commissioner of Taxation and the Commonwealth Registrar is also consistent with the right to protection from unlawful or arbitrary interference with privacy. The ability to share tax file numbers in this way ensures the functions of the Commonwealth Registrar can operate as intended. The amendment strikes a balance between the right to privacy and ensuring a function Registrar by only allowing the sharing of tax file numbers to facilitate the administration of Part 6.7A of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and Part 9.1A of the Corporations Act 2001.

5.39 The amendment to section 154G(1)(d) of the Competition and Consumer Act 2010 made by item 33 also engages the right to protection from arbitrary or unlawful interference with privacy. However, the amendment is consistent with this right as it does not change the rights or freedoms of individuals currently provided under the Competition and Consumer Act 2010. Rather, the amendments bring the Australian Competition and Consumer Commission's powers in line with new technological arrangements.

Conclusion

5.40 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.


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