House of Representatives

Explanatory Memorandum

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

General outline and financial impact

Schedule 1 - Enhanced beneficial ownership disclosure for listed entities

Outline

Chapter 2 Schedule 1 to the Bill amends the Corporations Act to enhance the beneficial ownership disclosure obligations that already apply to entities listed on Australia's financial markets (referred to in this Explanatory Memorandum as 'listed entities'). In particular, these amendments bolster the substantial holding and tracing notice regimes that govern the disclosure of beneficially owned interests in listed entities. This will improve corporate transparency by showing who ultimately owns, controls, and receives profits from companies. The amendments also broaden ASIC's regulatory enforcement powers in respect of disclosure obligations and related matters.

Date of effect

The amendments commence 12 months after Schedule 1 to the Bill receives Royal assent.

Proposal announced

The Government announced a multinational tax integrity package to address tax avoidance and improve corporate transparency as part of its 2022 election platform. Schedule 1 to the Bill delivers part of the package to implement that commitment. In concert with expanded anti-money laundering and counter-terrorism financing obligations and proposals to introduce beneficial ownership reforms in relation to unlisted companies, this Bill aims to improve corporate transparency and Australia's compliance with Financial Action Task Force recommendations relating to beneficial ownership of companies. ^[1]

Schedule 1 to the Bill was released for public consultation on 14 November 2024. The finalised amendments include responses to stakeholder feedback.

Financial impact

Schedule 1 to the Bill is estimated to result in an unquantifiable impact on revenue that is not expected to be material.

Human rights implications

Schedule 1 to the Bill is compatible with human rights. See Statement of Compatibility with Human Rights — Chapter 3.

Compliance cost impact

Schedule 1 to the Bill does not trigger the requirement to complete an impact assessment. Compliance costs will apply to entities listed on Australian markets and their beneficial owners, which may need to implement new processes to comply with the new settings. Once systems are implemented, compliance costs should stabilise. Some of the changed settings in Schedule 1 to the Bill constitute regulatory relief, which is expected to offset the burden from some of the additional obligations.

Schedule 2 - Australian Charities and Not-for-profits Commission review Rec 17 – Secrecy Provisions

Outline

Schedule 2 to the Bill amends the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) to provide two new exceptions for the public disclosure of protected Australian Charities and Not-for-profits Commission (ACNC) information about new and ongoing investigations, The Commissioner may authorise ACNC officers to disclose information about a recognised assessment activity in relation to a registered entity in certain circumstances, subject to a safeguard of a public harm test.

Date of effect

Schedule 2 to the Bill commences the day after Royal Assent.

Schedule 2 to the Bill applies in relation to recognised assessment activity carried out by the Commissioner on or after commencement relating to conduct of a registered entity before, on or after commencement.

Proposal announced

Schedule 2 to the Bill partially implements the 'Treasury Portfolio – additional resourcing' measure in the 2023-2024 Budget.

Financial impact

Nil.

Human rights implications

Schedule 2 to the Bill raises human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Compliance cost impact

This measure is expected to have nil compliance cost impact.

Schedule 3 - Frequency of Financial Regulator Assessment Authority Reviews

Outline

Schedule 3 to the Bill amends the Financial Regulator Assessment Authority Act 2021 (FRAA Act) to reduce the frequency of the Financial Regulator Assessment Authority's (FRAA) reviews of the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA) to every five years. This lessens the regulatory burden on ASIC and APRA and allows for more comprehensive reviews by the FRAA.

Date of effect

Schedule 3 to the Bill commences the day after Royal Assent.

Proposal announced

The 'Financial Regulator Assessment Authority Frequency of Reviews' measure was announced in the 2023-2024 Budget.

Financial impact

Schedule 3 to the Bill is estimated to have minimal financial impact. This proposal would result in savings in the years between reviews, where no panel members or consultants are appointed. Savings would accumulate from 2023-24 but may not be fully realised until later years. In 2023-24 Treasury will retain some departmental funding to deliver the legislative changes. In the months before a review cycle, Treasury will retain some funding to stand up the secretariat function.

All figures in this table represent amounts in $m.

Human rights implications

Schedule 3 to the Bill does not raise human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Compliance cost impact

This Schedule is expected to have minimal regulatory impact.

Schedule 4 - Minor and technical amendments

Outline

Schedule 4 to the Bill makes minor 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 correct unintended drafting outcomes, update legislative references, simplify provisions and reduce red tape.

Date of effect

Part 1 of Schedule 4 to the Bill commences on the day after Royal Assent.

Part 2 of Schedule 4 to the Bill commences on the first 1 January, 1 April, 1 July or 1 October to occur after the day of Royal Assent.

Part 3 of Schedule 4 to the Bill commences on the 28th day after Royal Assent.

Financial impact

Most of the amendments contained in Schedule 4 have been assessed to have nil financial impact.

Three amendments in this Schedule have been assessed as likely to have a financial impact:

•

Division 8 of Part 1 – Inspector-General of Taxation Act 2003 and Division 4 of Part 2 – Income tax deduction for GST paid by reverse charge have been assessed to have an unquantifiable financial impact.

•

Division 2 of Part 2 – Tax credits has been assessed to have an unquantifiable small increase in receipts offset by an unquantifiable small increase in payments.

Human rights implications

Schedule 4 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Schedule 5 - Machinery and other technical amendments

Outline

Schedule 5 to the Bill makes machinery and other 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 correct unintended drafting outcomes, update legislative references, simplify provisions and reduce red tape.

While similar in nature to the minor and technical amendments in Schedule 5 to the Bill, the machinery and other technical amendments need to be in place as soon as possible to enable ongoing administration of key government programs and address unforeseen outcomes of previous legislative changes that undermine the proper functioning of various government initiatives.

Date of effect

Part 1 of Schedule 5 to the Bill commences on the day after Royal Assent.

Part 2 of Schedule 5 to the Bill commences immediately after the commencement of item 142 of Schedule 4 to the Treasury Laws Amendment (2020 Measures No. 6) Act 2020, being 1 July 2024.

Financial impact

Most of the amendments contained in Schedule 5 have been assessed to have nil financial impact.

One amendment in this Schedule has been assessed to have a financial impact:

•

Part 2 – Amendments with other commencement: Director penalty notices has been assessed to have an unquantifiable financial impact.

Human rights implications

Schedule 5 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Schedule 6 - Extend Operation of the Prohibiting Energy Market Misconduct Provisions

Outline

Schedule 6 to the Bill extends the operation of Part XICA of the Competition and Consumer Act 2010 (CCA) for another five years, from 1 January 2026 to 1 January 2031.

Date of effect

Schedule 6 to the Bill commences the day after Royal Assent.

Financial impact

Nil.

Human rights implications

Schedule 6 to the Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Compliance cost impact

Nil.

Schedule 7 - $20,000 instant asset write-off for small business entities

Outline

Schedule 7 to the Bill amends the Income Tax (Transitional Provisions) Act 1997 (ITTP Act) to extend the $20,000 instant asset write-off by 12 months until 30 June 2026. This will allow small businesses (with an aggregated annual turnover of less than $10 million) to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose on or before 30 June 2026. The extension will improve cash flow and reduce compliance costs for small businesses.

Date of effect

Schedule 7 to the Bill commences on the day after Royal Assent. The measure applies to eligible depreciating assets first used or first installed ready for use for a taxable purpose in the period from 1 July 2025 until 30 June 2026.

Proposal announced

Schedule 7 to the Bill fully implements the 'Small Business Support – instant asset write-off' measure that was accounted for in the 2025-26 Budget and announced on 4 April 2025 as an election commitment.

Financial impact

Schedule 7 to the Bill is estimated to decrease receipts by $310.0 million over three years from 2026-27.

Human rights implications

Schedule 7 to the Bill does not raise human rights issues. See Statement of Compatibility with Human Rights — Chapter 8.

Compliance cost impact

Schedule 7 to the Bill is expected to have minimal regulatory impact.