House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing, the Hon Michael Sukkar MP)

General outline and financial impact

Schedule 1 - Refund of large-scale generation shortfall charge

Schedule 1 to the Bill amends the ITAA 1997 to make refunds of large-scale generation shortfall charges NANE income for income tax purposes.

Date of effect: Schedule 1 will apply to refunds of large-scale generation shortfall charges made on or after 1 January 2019.

Proposal announced: Schedule 1 fully implements the measure 'Corporate Taxation - removing the tax on refunds of large-scale generation shortfall charges' from 2019-20 Mid-Year Economic and Fiscal Outlook.

Financial impact: Schedule 1 was estimated to have a cost to revenue of $70.0 million over the forward estimates period at the time of the 2019-20 MYEFO comprising ($m):

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

Compliance cost impact: Nil.

Schedule 2 - Industry code penalties under Part IVB of the Competition and Consumer Act 2010

Schedule 2 to the Bill amends the CCA by increasing the maximum amount of penalty units that can be included in regulations that prescribe an industry code, with specific amendments for industry codes relating to the industry of franchising.

Date of effect: Schedule 2 will commence on the day after the Bill receives Royal Assent.

Proposal announced: This Schedule was partially announced in the Government's response to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the operation and effectiveness of the Franchising Code of Conduct report: Fairness in Franchising.

Financial impact: Nil.

Human rights implications: Schedule 2 engages human rights but does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact: Nil.

A Regulation Impact Statement was prepared and certified by the Department of Industry, Science, Energy and Resources. It has been included at Chapter 3.

Schedule 2 - Summary of regulation impact statement

Regulation impact on business

Impact: Nil.

Main point:

•

The increase in penalty units will not impose any additional regulatory burdens on businesses that comply with the law.

Schedule 3 - Requirement for actuarial certificates for certain superannuation funds

Schedule 3 to the Bill amends the ITAA 1997 to remove the requirement for superannuation trustees to provide an actuarial certificate when calculating exempt current pension income using the proportionate method, where all members of the fund are fully in retirement phase for all of the income year.

Date of effect: The amendment commences on the first 1 January, 1 April, 1 July or 1 October to occur after this Bill receives Royal Assent.

Proposal announced: This Schedule partially implements the measure Superannuation - reducing red tape for superannuation funds that was announced in the 2019-20 Budget.

Financial impact: The 2019-20 Budget estimated the measure Superannuation - reducing red tape for superannuation funds would have no revenue impact over the forward estimates period.

Human rights implications: Schedule 3 does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact: There will be a minor saving for affected funds as these funds will not be required to obtain actuarial certificates.

Schedule 4 - Strengthening industry codes under Part IVB of the Competition and Consumer Act 2010

Schedule 4 to the Bill amends the Competition and Consumer Act 2010 to provide regulatory certainty for industry participants that are governed by industry codes prescribed by regulations made under Part IVB of the Act. These amendments are to address unintended ambiguity and to ensure Part IVB industry codes apply across various markets as intended.

Date of effect: Schedule 4 commences immediately after Schedule 2 to the Bill commences.

Proposal announced: Not applicable.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact: The amendments in Schedule 4 to the Bill are technical in nature and as such will have no impact on compliance costs.

Schedule 5 - Superannuation information for family law proceedings

Schedule 5 to the Bill amends the Taxation Administration Act and the Family Law Act to create a new mechanism for sharing superannuation information for family law proceedings.

The Registries of the Federal Circuit and Family Court of Australia and the Family Court of Western Australia will serve as an intermediary in the information sharing process. The Registries may request superannuation information of a party to permitted family law proceedings from the Commissioner on application of the other party to the proceedings. The Commissioner may disclose superannuation information to the requesting Registry to provide to the parties and their lawyers. All disclosures and on-disclosures of the superannuation information must be for the purpose of permitted family law proceedings.

The amendments will make it harder for parties to hide or under-disclose their superannuation assets in family law proceedings by reducing the time, cost and complexity for parties seeking information about their current or former spouse/de facto partner's superannuation. A party will be able to use information from the Commissioner to seek up-to-date superannuation information from the other party's superannuation fund, limiting the need to rely on subpoenas or court orders to obtain this information.

Date of effect: Part 1 of Schedule 5 to the Bill commences on 1 April 2022.

Part 2 of Schedule 5 to the Bill commences on the later of:

•

immediately after the commencement of Part 1 of Schedule 5; and

•

immediately after the commencement of the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020.

However, Part 2 of Schedule 5 does not commence if that Act does not commence.

Proposal announced: Schedule 5 to the Bill fully implements the 'Improving the Visibility of Superannuation Assets in Family Law Proceedings' measure announced in the Women's Economic Security Statement and included in the 2018-19 MYEFO.

Financial impact: The measure was costed as part of the Women's Economic Security Package announced at the 2018-19 MYEFO, which at the time was estimated to have a fiscal cost of $119.2 million over the forward estimates period.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 7.

Compliance cost impact: Nil.