Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)General outline and financial impact
Unlawful payments from regulated superannuation funds - promotion of illegal early release schemes
Schedule 1 to this Bill introduces penalties to deter and penalise persons who promote illegal early release schemes.
Date of effect: These amendments apply to actions that occur after Royal Assent.
Proposal announced: This measure was announced by the Assistant Treasurer in a Media Release titled 'Integrity restored to Australia's taxation system' on 14 December 2013.
Financial impact: Nil. Costs associated with implementing a range of measures relating to the self managed superannuation fund (SMSF) sector, including penalties for promoters of illegal early release schemes, were offset by a previous increase to the SMSF supervisory levy.
Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights paragraphs 1.30 to 1.54.
Compliance cost impact: None.
Administrative directions and penalties for contraventions relating to self managed superannuation funds
Schedule 2 to this Bill introduces administrative directions and penalties for contraventions relating to self managed superannuation funds (SMSFs) including:
- •
- rectification directions;
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- education directions; and
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- administrative penalties.
Date of effect: These amendments apply to contraventions that occur on or after 1 July 2014.
Proposal announced: This measure was announced by the Assistant Treasurer in a Media Release titled 'Integrity restored to Australia's taxation system' of 14 December 2013.
Financial impact: Nil. Costs associated with implementing a range of measures relating to the self managed superannuation fund sector, including administrative directions and penalties, were offset by a previous increase to the SMSF Supervisory Levy.
Human rights implications: This Schedule raises a human rights issue. See Statement of Compatibility with Human Rights , paragraphs 2.103 to 2.118.
Compliance cost impact: None.
Phase-out of net medical expenses tax offset
Schedule 3 to this Bill amends the Income Tax Assessment Act 1936 to phase-out the net medical expenses tax offset by the end of the 2018-19 income year. During the income years 2013-14 to 2018-19 the tax offset will be subject to transitional arrangements.
Date of effect: The amendments will apply from 1 July 2013 with the transitional arrangements and the tax offset ceasing on 1 July 2019.
Proposal announced: This measure was initially announced by the former Government as part of the 2013-14 Budget. The current Government announced that it would proceed with the measure in the Treasurer's and Assistant Treasurer's Joint Media Release of 6 November 2013 titled 'Restoring Integrity in the Australian tax system'.
Date of effect: The amendments will apply from 1 July 2013 with the transitional arrangements and the tax offset ceasing on 1 July 2019.
Proposal announced: This measure was initially announced by the former Government as part of the 2013-14 Budget. The current Government announced that it would proceed with the measure in the Treasurer's and Assistant Treasurer's Joint Media Release titled 'Restoring Integrity in the Australian tax system' of 6 November 2013.
Financial impact: In the 2013-14 Budget, this measure was estimated to have the following revenue implications:
| 2012-13 | 2013-14 | 2014-15 | 2015-16 | 2016-17 |
| Nil | -$2.0m | $175.0m | $285.0m | $510.0m |
This measure was estimated to provide gains to revenue of $968 million over the forward estimates. Proceeding with this measure as announced has no additional impact over the forward estimates period.
Human rights implications: This Schedule is compatible with human rights. See Statement of Compatibility with Human Rights , paragraphs 3.47 to 3.55.
Compliance cost impact: None.
Deductible gift recipients
Schedule 4 to this Bill amends the Income Tax Assessment Act 1997 to update the list of specifically-listed deductible gift recipients.
Date of effect: The listing of the National Arboretum Canberra Fund applies to gifts made on or after 1 July 2013. The existing listing for the Bali Peace Park Association Inc., which expired on 17 December 2011, has been extended to 16 December 2014. The listing of The Prince's Charities Australia Limited applies to gifts made on or after 1 January 2014.
Proposal announced: The listing of the National Arboretum Canberra Fund was announced in the 2013 Pre-Election Economic and Fiscal Update . The extension of the existing listing of the Bali Peace Park Association Inc. was announced in the August 2013 Economic Statement . The listing of The Prince's Charities Australia Limited was announced in the 2014 Mid-Year Economic and Fiscal Outlook .
Financial impact: The revenue implications of this measure are as follows:
| Organisation |
2013-14
$m |
2014-15
$m |
2015-16
$m |
2016-17
$m |
| National Arboretum Canberra Fund | Nil | -0.02 | -0.02 | -0.02 |
| Bali Peace Park Association Inc. | -0.1 | -0.2 | -0.1 | Nil |
| The Prince's Charities Australia Limited | Nil | -0.3 | -0.5 | -0.5 |