Explanatory Memorandum(Circulated by authority of the Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)
General outline and financial impact
Schedules 1 to 6 - Superannuation Guarantee Integrity
This package implements several recommendations contained in the Superannuation Guarantee Cross-Agency Working Group's report to strengthen compliance with taxation and superannuation guarantee obligations. The package contains amendments to:
- allow the Commissioner in cases where employers fail to comply with their superannuation guarantee obligations, to issue directions to pay unpaid superannuation guarantee and undertake superannuation guarantee education courses;
- allow the Commissioner to disclose more information about superannuation guarantee non-compliance to affected employees;
- extend Single Touch Payroll reporting to all employers;
- facilitate more regular reporting by superannuation funds;
- improve the operation of the Commissioner's collection and compliance measures; and
- streamline employee commencement processes.
Date of effect: 1 July 2018.
Proposal announced: 27 August 2017.
The financial impact reflects the aggregated amounts of all of the measures contained in the Superannuation Guarantee Integrity package (including departmental expenses).
Human rights implications: Schedules 1 to 6 do not raise any human rights issues. See Statement of Compatibility with Human Rights - in Chapter 10, at paragraphs 10.1 to 10.37.
Compliance cost impact: Schedules 1 to 6 contain a combination of enforcement measures, which have no compliance cost impact, and reporting related measures that will reduce overall compliance costs.
Summary of regulation impact statement
Regulation impact on business
Impact: The Regulation Impact Statement (RIS) for the extension of single touch payroll reporting to all employers (Chapter 3) finds that the recommended extension, once implemented, will result in reduced compliance costs for small business in complying with their employee tax and superannuation reporting obligations.
- Small business to undergo an initial upfront cost in order to implement the Single Touch Payroll reporting system.
- It is expected that over time, small business will benefit from Single Touch Payroll with a significant reduction in compliance and reporting costs.
- Businesses will be impacted through earlier detection of those employing small businesses that are not meeting their tax and superannuation obligations.
Schedule 7 - information sharing
Schedule 7 enables the sharing and verification of tax file numbers, which have been obtained in accordance with a Commonwealth law, between the Commissioner and Commonwealth Agencies.
Date of effect: 1 July 2018.
Proposal announced: This has not been previously announced.
Financial impact: Nil.
Human rights implications: Schedule 7 does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 10, paragraphs 10.38 to 10.48.
Compliance cost impact: Nil.
Schedule 8 - Miscellaneous amendments
Schedule 8 to this Bill makes a number of miscellaneous amendments to the taxation, superannuation and other laws. These amendments are part of the Government's commitment to the care and maintenance of Treasury portfolio legislation including the taxation and superannuation systems.
These amendments make minor technical changes to correct spelling errors, bring provisions in line with drafting conventions, repeal inoperative provisions and update references in the tax law to reflect changes to the names of State and Territory legislation and specifically listed deductible gift recipients. The Schedule also makes consequential amendments as a result of other recent changes to the law, makes minor technical amendments to remove administrative inefficiencies, clarifies the law ensuring the law operates in accordance with the policy intent and rewrites certain provisions to standardise rules across various types of tax, improving efficiency, coherency and simplicity in tax administration.
Date of effect: These amendments have various commencement and application dates. Most amendments commence from the first quarter beginning on or after the day this Bill receives Royal Assent. This explanatory memorandum details the commencement and application dates of amendments that commence or apply from a different time. Where amendments have retrospective application, the effect of that retrospectivity is also explained.
Proposal announced: Most of these amendments have not been previously announced. The amendments relating to the rewrite of the offshore information notice regime were announced on the Treasury website on 21 January 2016, with the release of draft amendments for public consultation.
The amendments in respect of reversionary transition to retirement income streams were announced and publicly consulted on in February 2018.
Financial impact: These amendments are estimated to have a negligible impact on revenue over the forward estimates period.
Human rights implications: This Schedule raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 10, paragraphs 10.49 to 10.78.
Compliance cost impact: Negligible.
Schedule 9 - Deductible gift recipients
Schedule 9 to this Bill amends the ITAA 1997 to allow the following entities to be DGRs under the income tax law:
- Australian Philanthropic Services Limited;
- Foundation 1901 Limited; and
- Sydney Chevra Kadisha.
Date of effect: The amendments apply to gifts made to Australian Philanthropic Services Limited on or after 1 July 2016.
The amendments apply to gifts made to Foundation 1901 Limited between 1 September 2016 and 31 August 2021 inclusive.
The amendments apply to gifts made to Sydney Chevra Kadisha between 1 January 2018 and 31 December 2019 inclusive.
Proposal announced: This Schedule partly implements the measure - "Philanthropy - updates to the list of specifically listed deductible gift recipients" which was announced in the 2017-18 MYEFO.
Financial impact: The cost to revenue of this measure as recorded in the 2017-18 MYEFO is estimated to be $1.1m over the forward estimates period to 2020-21 comprising ($m):
.. not zero but rounded to zero
The 2017-18 MYEFO measure, "Philanthropy - updates to the list of specifically listed deductible gift recipients", included listing Australian Philanthropic Services Limited, Centre of Entrepreneurial Research and Innovation Limited, Foundation 1901 Limited, Melbourne Korean War Memorial Committee Incorporated and Sydney Chevra Kadisha as DGRs. The listing of Centre of Entrepreneurial Research and Innovation Limited as a DGR was separately enacted in Treasury Laws Amendment (2017 Measures No. 6) Act 2017. The DGR listing of Melbourne Korean War Memorial Committee Incorporated is not included in this Bill. However, these changes from the announced 2017-18 MYEFO measure are estimated to have a negligible impact to the financial impact published in the 2017-18 MYEFO. It is expected that listing Australian Philanthropic Services Limited, Foundation 1901 Limited and Sydney Chevra Kadisha as DGRs will have a cost to revenue similar to the MYEFO measure's estimated financial impact.
Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 10, paragraphs 10.79 to 10.82.
Compliance cost impact: Nil.
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