Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer, the Hon Stuart Robert MP)Chapter 5 Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Schedule 1 - AMIT technical amendments
5.1 This Schedule 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 this Bill amends the TAA 1953, ITAA 1997, ITAA 1936, TLAA 2016 and the IT(TP)A 1997 to make a number of technical refinements to the income tax law so that the new tax system for managed investment trusts operates as intended.
Human rights implications
5.3 This Schedule does not engage any of the applicable rights or freedoms.
Conclusion
5.4 This Schedule is compatible with human rights as it does not raise any human rights issues.
Schedule 2 - Deductible gift recipients
5.5 This Schedule 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
5.6 Schedule 2 to this Bill amends the ITAA 1997 to update the list of specifically listed DGRs to include the Australian Sports Foundation Charitable Fund, Australian Women Donors Network, Paul Ramsay Foundation Limited, The Q Foundation Trust, Smile Like Drake Foundation Limited and Victorian Pride Centre Ltd.
Human rights implications
5.7 This Schedule does not engage any of the applicable rights or freedoms.
Conclusion
5.8 This Schedule is compatible with human rights as it does not raise any human rights issues.
Schedule 3 - Extending DGR status to entities promoting Indigenous languages
5.9 This Schedule 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
5.10 Schedule 3 extends DGR status to entities promoting Indigenous languages. This allows members of the public to make tax deductible gifts to organisations that are endorsed as an entity on the register of cultural organisations because they promote Indigenous languages.
Human rights implications
5.11 This Schedule engages the right to enjoy and benefit from culture contained in Article 27 of the International Covenant on Civil and Political Rights (ICCPR) and Article 15 of the International Covenant on Economic, Social and Cultural Rights (ICESR), as it promotes the preservation of Indigenous languages, which are a form of cultural expression.
5.12 The UN Committee on Economic, Social and Cultural Rights has regarded Indigenous peoples as a minority for the purposes of Article 27, and that culture encompasses many different forms including 'language'.
5.13 There are estimated to be 250 original Aboriginal and Torres Strait Islander languages and over 600 dialects.
5.14 The Bill is compatible with the right to enjoy and benefit from culture, as it promotes the preservation of Indigenous languages. It does this by providing appropriate support through the tax system for entities that promote the preservation of Indigenous languages, by allowing persons that make a donation of $2 or more to those entities to claim a tax deduction.
Conclusion
5.15 This Schedule is compatible with the right to enjoy and benefit from culture contained in Article 27 of the ICCPR and Article 15 of the ICESR, as it promotes the preservation of Indigenous languages.
Schedule 4 -Repeal of subsection 51(3) of the Competition and Consumer Act 2010
5.16 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
5.17 Schedule 4 provides for the repeal of subsection 51(3) of the Competition and Consumer Act 2010 (CCA) and subsection 51(3) of Schedule 1 to the CCA (the Competition Code). This will remove the exemption from Part IV of the CCA (restrictive trade practices) for conditional licensing or assignment of intellectual property (IP) rights such as patents, registered designs, copyright or eligible circuit layout rights. The intention of this amendment is to ensure anti-competitive conduct associated with IP is subject to appropriate regulation. This will promote innovation and competition, and enhance consumer welfare.
5.18 Removing the exemption will mean that offences and civil penalties in Division 1 of Part IV of the CCA will apply to these conditions in licences and assignments of IP. Division 1 of Part IV of the CCA and mirror provisions in the Competition Code contain offences and civil penalty provisions relating to cartel conduct. Under the provisions a person must not make, or give effect to, a contract, arrangement or understanding that contains a cartel provision. A cartel provision is a provision between two parties that are, or would otherwise be, in competition with each other where they partake in any of the following: price-fixing; restricting outputs in the production and supply chain; allocating customers, suppliers or territories; or bid-rigging.
5.19 Sections 45AF and 45AG provide that a person commits an offence if they enter into, or gives effect to, a cartel provision. The fault element is knowledge or belief, and the offence is an indictable offence. Subdivision C (sections 45AJ and 45AK) sets out the corresponding civil penalty provisions.
Human rights implications
5.20 This Schedule engages the following human rights and freedoms:
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- a guarantee against retrospective criminal laws under article 15(1) of the International Covenant on Civil and Political Rights (ICCPR); and
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- the right to be presumed innocent until proven guilty (evidential burden of proof) under article 14(2) of the ICCPR.
Assessment of civil penalties
5.21 The Parliamentary Joint Committee on Human Rights Guidance Note 2: Offence provisions, civil penalties and human rights (December 2014) observes that civil penalty provisions may engage criminal process rights under articles 14 and 15 of the ICCPR, regardless of the distinction between criminal and civil penalties in domestic law. This is because the word 'criminal' has an autonomous meaning in international human rights law. When a provision imposes a civil penalty, an assessment is therefore required as to whether it amounts to a 'criminal' penalty for the purposes of the articles 14 and 15 of the ICCPR.
5.22 The civil penalty provisions in Part IV of the CCA (which will apply more broadly following the repeal of section 51(3)) should not be considered 'criminal' for the purposes of international human rights law.
5.23 While the civil penalty provisions in Part IV are intended to deter people from non-compliance, none of the civil penalty provisions carry a penalty of imprisonment. The statement of compatibility therefore proceeds on the basis that the civil penalty provisions in Part IV of the CCA are not criminal offences for the purposes of articles 14 and 15 of the ICCPR.
Application of criminal offences
5.24 The repeal of subsection 51(3) will apply to a licence granted, an assignment made, or a contract, arrangement or understanding entered into, including conditions imposed, or provisions included in such, on, after or before the commencement of the Bill. This means offence and civil penalty provisions contained in Part IV of the CCA will apply to agreements made prior to the commencement of the Bill.
5.25 Generally, article 15 of the ICCPR prohibits retrospectively making an act or omission a criminal offence. In this instance the application of the offence provisions to existing contracts is appropriate given that the six month delayed commencement will enable entities time to review their arrangements, and apply to the ACCC for authorisation under Part VII of the CCA if they have concerns with application to existing contracts.
5.26 Further, the fault element of the offence requires knowledge or belief. On these grounds the application of the offence provisions to existing contracts are reasonable, necessary and proportionate, particularly given that they do not apply to the general public, but to a sector which should reasonably be aware of their obligations under the CCA (e.g. companies and directors of companies).
Reverse evidential burden of proof
5.27 Upon the repeal of section 51(3), Subdivision D of Part IV of the CCA will apply more broadly. Subdivision D provides the exceptions to the offences and civil penalty provisions set out in sections 45AF, 45AG, 45AJ and 45AK.
5.28 For example, under section 45AM of Subdivision D, a corporation may enter into, or give effect to, a cartel provision, if a provision in the contract provides that the cartel provision is subject to a condition that it will not come into force until a corporation is granted authorisation, and applies for the grant of the authorisation within 14 days after the contract is made. A person who wishes to rely on the exceptions contained in Subdivision D bears the evidential burden of proving the exception.
5.29 Under subsection 13.3(3) of the Criminal Code Act 1995 a defendant who wishes to rely on any exception, provided by the law creating an offence, bears an evidential burden in relation to that matter; the exception need not accompany the description of the offence. Accordingly, the reverse evidential burden of proof is acceptable in this instance as it is limited to reliance on the codified exception, and not the proving of innocence in and of itself.
Conclusion
5.30 Schedule 4 to the bill is compatible with human rights because:
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- the application of offence provisions to existing contracts are largely consistent with article 15(1) ICCPR, and the delayed commencement allows sufficient time for compliance; and
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- the reverse burden of proof is limited to the exception provisions and not the offence provisions, and therefore is consistent with article 14(2) of the ICCPR.
5.31 The Schedule is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.