House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. Josh Frydenberg MP)

General outline and financial impact

Overview

This legislative package contains a number of bills to implement the Government's economic response to the spread of the Coronavirus.

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Coronavirus Economic Response Package (Payments and Benefits) Bill 2020.

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Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020.

Further details on the measures contained in each of these bills and the Government's economic response to the spread of the Coronavirus are detailed below and in the subsequent chapters.

Schedule 1 - Amendment of the Fair Work Act 2009

This Schedule was prepared by the Attorney-General's Department.

Schedule 1 to this Bill amends the Fair Work Act to support the practical operation of the JobKeeper scheme in Australian workplaces in the national workplace relations system and keep Australians employed.

Part 1 of Schedule 1 to the Bill inserts new Part 6-4C into the Fair Work Act, which temporarily enables employers to issue JobKeeper enabling directions. These can provide (subject to various safeguards) for increased flexibility around employees' hours of work via a new JobKeeper enabling stand down direction, performance of duties and location of work. It also enables employers and employees to make agreements for increased flexibility around annual leave arrangements and days and times of work. The FWC will be able to resolve disputes, including by arbitration.

New Part 6-4C also requires JobKeeper qualifying employers to meet minimum payment obligations to employees who are subject to these arrangements, including by ensuring that at least the value of JobKeeper payments they receive through the Commissioner is passed on to such employees each fortnight, or the amount they would receive for the work they have performed if that would be greater.

New Part 6-4C also includes rules about accrual of service and calculation of benefits in certain circumstances.

Date of effect: Schedule 1 to this Bill will commence on the day after the day on which this Bill receives Royal Assent.

Proposal announced: The JobKeeper scheme was announced on 30 March 2020.

Financial impact: Nil.

Human rights implications: This Schedule raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.

Schedule 2 - Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and consequential amendments

This Schedule was prepared by the Department of the Treasury.

The Australian Government is acting decisively in the national interest to address the significant economic consequences of the Coronavirus, without a permanent or structural impact on the budget balance.

The Payments and Benefits Bill is a key part of the Commonwealth response to the potential national emergency arising from the spread of the Coronavirus. It provides a framework for financial support to be provided by the Commissioner to assist businesses and their employees through the downturn.

The Payments and Benefits Bill establishes a framework to administer the Coronavirus economic response payments. Under the framework, the Treasurer will be able to make rules to provide for payments administered by the Commissioner. This allows for flexibility of the payment arrangements and ensures the robustness of the eligibility criteria to appropriately respond to the impacts of the Coronavirus.

The design of the framework recognises that the Commissioner, through existing arrangements, makes payments to and receives payments from taxpayers as part of the administration of the tax law. Therefore, the Commissioner is well placed to administer payment programs to individuals and businesses, but requires specific legislative authority to facilitate this.

The JobKeeper Payments announced on 30 March 2020 are intended to be delivered under this framework. These payments will support businesses to keep more Australian workers in jobs through the course of the Coronavirus.

Date of effect: The Payments and Benefits Bill provides for rules to be made allowing the Commissioner to make payments on or after the day of commencement, for the period between 1 March 2020 and 31 December 2020 (inclusive).

Proposal announced: The JobKeeper scheme was announced on 30 March 2020.

Financial impact: This measure is estimated to have the following direct financial impact, via JobKeeper payments to eligible employers and employees, over the forward estimates period in underlying cash balance terms ($ billions):

Human rights implications: The Payments and Benefits Bill and Schedule 2 to this Bill do not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.

Schedule 3 - Guarantee of lending to small and medium enterprises

This Schedule was prepared by the Department of the Treasury.

Schedule 3 to this Bill makes technical amendments to the Guarantee of Lending Act. The amendments ensure that certain categories of smaller non-ADI lenders will fall within the definition of financial institution in that Act.

Date of effect: Schedule 3 to this Bill will commence on the day after the day on which this Bill receives Royal Assent.

Proposal announced: This measure has not previously been announced.

Financial impact: Unquantifiable.

Human rights implications: Schedule 3 to this Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.

Schedule 4 - Amendments to support the child care sector

This Schedule was prepared by the Department of Education, Skills and Employment.

Schedule 4 to this Bill amends the Family Assistance Administration Act to:

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modify the calculation method used for Child Care Subsidy reconciliation to ensure a consistent outcome for individuals who have changed their relationship status during the financial year; and

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meet various circumstances of social and financial hardship being experienced by the child care sector and families, arising from emergency and disaster events including the Coronavirus by ensuring that payments of Additional Child Care Subsidy and certain grants can draw upon standing appropriations.

The amendments also require that the Minister make rules which prescribe the total amount that can be paid in a financial year.

Date of effect: The amendments to modify the calculation method used for Child Care Subsidy reconciliation take effect from the first Child Care Subsidy fortnight after this Bill receives Royal Assent.

The amendments which ensure that payments of Additional Child Care Subsidy and grants can draw upon standing appropriations take effect from the day after the day on which this Bill receives Royal Assent.

The requirement that a total cap must be prescribed to limit the amount that can be drawn from special appropriations will take effect from 1 July 2020.

Proposal announced: The modifications to the Child Care Subsidy reconciliation were included in the Family Assistance Legislation Amendment (Improving Assistance for Vulnerable and Disadvantaged Families) Bill 2020 which was introduced into Parliament on 26 February 2020.

The other amendments in Schedule 4 to this Bill have not previously been announced.

Financial impact: It is not possible to determine the financial impact of the measures in Schedule 4 to this Bill as it will depend on sector need for additional financial assistance as a result of emerging issues and impacts from the Coronavirus.

Human rights implications: Schedule 4 to this Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen circumstances.

Schedule 5 - Modification of information and other requirements

This Schedule was prepared by the Attorney-General's Department.

Schedule 5 to this Bill provides a temporary mechanism for responsible Ministers to change arrangements for meeting information and documentary requirements under Commonwealth legislation in response to the challenges posed by the Coronavirus.

Date of effect: Schedule 5 to this Bill will commence on the day after the day on which this Bill receives Royal Assent.

Proposal announced: This measure has not previously been announced.

Financial impact: Nil.

Human rights implications: Schedule 5 to this Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.

Schedule 6 - Additional support for veterans

This Schedule was prepared by the Department of Veterans' Affairs.

Schedule 6 to this Bill allows the Veterans' Minister to:

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increase, by legislative instrument, the amount paid to persons receiving a payment under a provision of the Veterans' Law by the amount of the COVID-19 supplement; and

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vary the qualifications and eligibility for payments under the Veterans' Law by legislative instrument.

These instruments may only be made after consultation with the Social Services Minister. Both the powers and any instruments made using them will end on 31 December 2020.

Date of effect: Schedule 6 to this Bill will commence on the day after the day on which this Bill receives Royal Assent.

Proposal announced: This measure has not previously been announced.

Financial impact: The financial impact of the extension to veterans and their dependents has not been separately costed. These costs, and costs of any variation to the qualifications and benefits under the Veterans' Law, will be separately costed when the relevant legislative instrument is developed.

Human rights implications: Schedule 6 to this Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen circumstances.

Schedule 7 - Tax secrecy

This Schedule was prepared by the Department of the Treasury.

Schedule 7 to this Bill makes amendments to the tax secrecy provisions in the TAA 1953 to allow de-identified protected information to be disclosed to the Treasury for the purposes of policy development, or analysis, in relation to the Coronavirus, including in relation to programs introduced in response to the economic impacts of the Coronavirus. The amendments allow such disclosures to be made until 30 June 2023.

Date of effect: Schedule 7 to this Bill will commence on the day after the day on which this Bill receives Royal Assent. These amendments are repealed on 1 July 2023.

Proposal announced: This measure has not previously been announced.

Financial impact: Nil.

Human rights implications: Schedule 7 to this 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. See Statement of Compatibility with Human Rights - Chapter 8.

Compliance cost impact: An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen circumstances.