House of Representatives

Explanatory Memorandum

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

General outline and financial impact

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

Outline

Schedule 1 to the Bill facilitates the return of responsibility and resources for administering Commonwealth business registers from the Australian Taxation Office (ATO) to the Australian Securities and Investments Commission (ASIC), in winding up the Modernising Business Registers (MBR) Program. The amendments ensure that Public Service Act employees transferred to ASIC as part of this, and any future, Machinery of Government (MoG) change are subject to the same legislative framework under the ASIC Act, and therefore have the same functions and protections as existing ASIC staff employed under section 120 of the ASIC Act. The amendments also adjust provisions relating to registry records of corporate collective investment vehicles.

Date of effect

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

Division 1 of Part 2 of Schedule 1 to the Bill commences on 31 December 2024.

Division 2 of Part 2 of Schedule 1 to the Bill commences on the day after Royal Assent.

Proposal announced

Schedule 1 to the Bill partially implements the 'Ceasing the Modernising Business Registers Program' measure in the 2023-2024 MYEFO.

Financial impact

Schedule 1 to the Bill is not estimated to have any additional financial impact, with government having already provided $28.037 million for the MoG change as part of the decision to stop the MBR program in 2023.

All figures in this table represent amounts in $m.

Impact Analysis

No impact analysis was required for the measure to cease the MBR program (OIA23-05335).

Human rights implications

Schedule 1 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

There are no compliance costs impacts associated with this measure.

Schedule 2 - Regulation of safety standards and information standards

Outline

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

•

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

•

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

•

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

•

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

Date of effect

Part 1 of Schedule 2 to the Bill commences the day after Royal Assent.

Item 28 of Schedule 2 to the Bill commences at the same time as Part 1 of Schedule 2 to the Bill. However, the provisions do not commence at all if Part 1 of Schedule 6 to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Act 2024 commences at or before that time.

Item 29 of Schedule 2 to the Bill commences immediately after the commencement of Part 1 of Schedule 6 to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Act 2024. However, the provisions do not commence at all if that Part commences before the commencement of Part 1 of Schedule 2 to the Bill.

Proposal announced

Schedule 2 to the Bill was released for public consultation from 11 October 2024 to 25 October 2024.

Financial impact

Nil

Impact Analysis

The Impact Analysis relating to the amendments in Schedule 2 to the Bill is included at Attachment 1.

Human rights implications

Schedule 2 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

Following the amendments in Schedule 2 to the Bill, international standards are expected to be incorporated into safety standards and information standards following a review by the Australian Competition and Consumer Commission (ACCC). When fully implemented, the reforms are expected to save businesses $5 billion over 10 years in administrative, testing, and compliance costs where a good or service already conforms with a relevant international standard.

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

Outline

Schedule 3 to the Bill amends the Housing Australia Act to increase the cap on the balance of the Housing Australia Special Account from $1 billion to $4 billion. The Schedule recognises the importance of ensuring that the cap does not constrain the ability to provide additional credits to the Housing Australia Special Account.

Date of effect

Schedule 3 to the Bill commences and applies from the day after Royal Assent.

Proposal announced

Schedule 3 to the Bill partially implements the 'Housing Support' measure in the 2024-2025 Budget.

Financial impacts

Schedule 3 to the Bill is estimated to have nil or minimal financial impact.

Human rights implications

Schedule 3 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

Nil.

Schedule 4 - Industry codes

Outline

Schedule 4 to the Bill amends Part IVB of the CCA to:

•

increase the penalty to be specified in an infringement notice issued in relation to an alleged contravention of a civil penalty provision of an industry code;

•

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

•

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

Date of effect

Schedule 4 to the Bill commences on the later of 1 April 2025 and the day after Royal Assent.

Proposal announced

Schedule 4 to the Bill implements aspects of the Government response to the Independent Review of the Franchising Code of Conduct released in May 2024, and aspects of the Government response to the Independent Review of the Food and Grocery Code of Conduct released in June 2024.

Schedule 4 to the Bill also implements aspects of the Government announcement in October 2024 that it will introduce substantial penalties for supermarkets that do the wrong thing and breach the Unit Pricing Code.

Financial impact

Schedule 4 to the Bill is estimated to have a small positive impact on the underlying cash balance over the forward estimates period ($m):

.. not zero, but rounded to zero

Schedule 4 to the Bill permits an industry code relating to the industry of food and groceries to prescribe a higher maximum penalty for a contravention of a civil penalty provision. As the Food and Grocery Code and the Unit Pricing Code do not currently contain civil penalty provisions, this would not have a financial impact until the Government's decision to introduce civil penalty provisions in the new Food and Grocery Code and the Unit Pricing Code is given effect.

Schedule 4 to the Bill would also increase infringement notice penalties for alleged contraventions of civil penalty provisions of an industry code. This would enable the ACCC to impose higher penalties for alleged contraventions of industry codes that contain civil penalty provisions, including the new Franchising Code, the Competition and Consumer (Industry Codes-Dairy) Regulations 2019, the Competition and Consumer (Industry Codes-Horticulture) Regulations 2017 and the Competition and Consumer (Industry Code-Electricity Retail) Regulations 2019. This is expected to result in a direct and ongoing minor positive impact to the underlying cash balance.

Impact Analysis

The Independent Review of the Food and Grocery Code of Conduct Final Report (relating to aspects of the amendments in Schedule 4 to the Bill) was certified by the Office of Impact Analysis as equivalent to a Policy Impact Analysis. ^[1]

On 10 January 2024, the Prime Minister, the Treasurer, the Minister for Agriculture, Fisheries and Forestry, and the Assistant Minister for Competition, Charities and Treasury, announced the appointment of the Hon Dr Craig Emerson to lead the Food and Grocery Code Review.

The Food and Grocery Code Review and its timing were informed by section 5 of the Food and Grocery Code.

As required by the Terms of Reference, the Food and Grocery Code Review:

•

assessed the effectiveness of provisions of the Food and Grocery Code in achieving the purpose of the Code to improve the commercial relationship between retailers, wholesalers and suppliers in the grocery sector; and

•

considered the need for the Food and Grocery Code, including whether it should be remade, amended or repealed.

The central recommendation of the Independent Review of the Food and Grocery Code of Conduct Final Report was that the new Food and Grocery Code be made mandatory with heavy penalties for breaches. This was considered necessary to ensure it is effective in addressing the heavy imbalance in market power between supermarkets and their suppliers, especially their smaller suppliers.

Human rights implications

Schedule 4 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

Schedule 4 to the Bill will have a negligible compliance cost.

Schedule 5 - Deductible gift recipients

Outline

Schedule 5 to the Bill amends the ITAA 1997 to list Skip Foundation Ltd as a deductible gift recipient. The Schedule also amends the ITAA 1997 to remove eight deductible gift recipients.

Date of effect

Schedule 5 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Royal Assent.

Proposal announced

Schedule 5 to the Bill partially implements the Philanthropy - updates to the list of specifically listed deductible gift recipients measure in the 2024-25 Budget.

Financial impact

Schedule 5 to the Bill is estimated to have a negligible impact on receipts.

All figures in this table represent amounts in $m.

.. not zero but rounded to zero.

Human rights implications

Schedule 5 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

The measure has a low compliance cost impact.

Schedule 6 - Minor and technical amendments

Outline

Schedule 6 to the Bill makes miscellaneous and technical amendments to Treasury portfolio legislation. The amendments demonstrate the Government's ongoing commitment to the care and maintenance of Treasury portfolio legislation.

The amendments update legislative references, simplify provisions and reduce red tape.

Date of effect

Part 1 of Schedule 6 to the Bill commences on the day after Royal Assent.

Part 2 of Schedule 6 to the Bill commences on the first day of the next quarter after Royal Assent.

Part 3 of Schedule 6 to the Bill commences on the day after the end of the period of 14 days beginning on the day after Royal Assent

Financial impact

Schedule 6 to the Bill is estimated to have nil or minimal financial impact.

Human rights implications

Schedule 6 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact

This measure is estimated to have minor impact on compliance costs.