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 - Australian Screen Production Incentive Reforms

Schedule 1 to the Bill amends Division 376 of the ITAA 1997 to increase the producer offset for films that are not feature films released in cinemas to 30 per cent of total qualifying Australian production expenditure, and to make various threshold and integrity amendments across the three screen tax offsets.

Date of effect: The amendments made in this Schedule apply to:

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films commencing principal photography on or after 1 July 2021 in respect of the amendments to the location offset and producer offset; and

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films commencing post, digital and visual effects production on or after 1 July 2021 in respect of the PDV offset.

Proposal announced: This Schedule implements the reforms to the Australian Screen Production Incentive contained in the 'Media Reforms Package - Screen Sector Support' from the 2020-21 Budget.

Financial impact: The measure is estimated to have the following impact on the underlying cash balance over the forward estimates period ($m):

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

Compliance cost impact: This measure has a minor compliance cost saving for each company.

Schedule 1 - Summary of regulation impact statement

Regulation impact on business

Impact: Compliance cost saving of $191,391 for each affected company.

Main points:

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The ASPI, as the Australian Government's primary mechanism for providing support to the screen industry, provides tax incentives for film, television and other screen production in Australia and is available in three streams: the producer offset, the location offset and the PDV Offset.

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The ASPI was designed to suit pre-2007 industry settings. Various reviews and inquiries that have taken place since 2017 have all found that the current policy settings for supporting the production of Australian screen content were fit for purpose when they were designed and have generally served domestic audiences and the Australian screen production sector well.

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These processes also found that with a need for Australian producers to consistently create Australian stories that resonate with local and international audiences, the policy settings need to be modernised to support the creation of quality Australian content and for it to be made available across all platforms from traditional television to online services.

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Government policies need to be set so that our industry focuses on the creation of content that can compete for audiences in this market by producing quality, engaging stories with high production values this is available to audiences on the right distribution platform.

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Under the option that is implemented in this Schedule, regulatory savings will be achieved as a result of changes to the eligibility criteria for the producer and PDV offsets.

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Other changes under that option will have no regulatory impact.

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The full Regulatory Impact Statement has been included at Attachment A.

Schedule 2 - Consequential and transitional matters arising from corporate insolvency reforms

On 1 January 2021, the Australian Government's corporate insolvency reforms - Corporations Amendment (Corporate Insolvency Reforms) Act 2020 and Corporations Amendment (Corporate Insolvency Reforms) Regulations 2020 - commenced. The reforms established new debt restructuring and simplified liquidation processes for eligible incorporated small businesses, which reduce the complexity, time and costs of external administration and the compliance burden for insolvency practitioners. These processes enable more Australian small businesses to quickly restructure and keep trading or, where restructure is not possible, the intent is to support businesses to wind up faster, enabling greater returns for creditors.

Schedule 2 to the Bill makes consequential amendments to integrate the corporate insolvency reforms across the Commonwealth statute book.

Date of effect: Schedule 2 to the Bill commences on the day after this Bill receives Royal Assent.

Proposal announced: Schedule 2 to the Bill partially implements the measure JobMaker Plan - supporting small business and responsible lending from the 2020-21 Budget.

Financial impact: Nil.

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

Compliance cost impact: The Government's corporate insolvency reforms as a whole are expected to deliver significant regulatory savings for impacted businesses and individuals.

Summary of regulation impact statement

Impact: The Government's corporate insolvency reforms as a whole are expected to deliver significant regulatory savings for impacted businesses and individuals.

Main points:

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Schedule 2 to the Bill makes consequential amendments to integrate the corporate insolvency reforms across the Commonwealth statute book.

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A Regulation Impact Statement was prepared and included in the explanatory statement accompanying the related Corporations Amendment (Corporate Insolvency Reforms) Regulations 2020.

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This Regulation Impact Statement also covers the consequential amendments in Schedule 2 and has been included at Attachment B.

Schedule 3 - Miscellaneous and technical amendments

Schedule 3 to the Bill makes a number of miscellaneous and technical amendments to various laws in the Treasury portfolio to improve these laws and ensure they operate as intended.

Date of effect: Part 1 of Schedule 3 commences the day after receives Royal Assent.

Part 2 of Schedule 3 commences on the first 1 January, 1 April, 1 July or 1 October after Royal Assent.

If the Bill receives Royal Assent in 2021, Division 1 of Part 3 of Schedule 3 commences on 1 January 2022. Otherwise, it commences on the later of the first 1 January, 1 April, 1 July or 1 October after Royal Assent.

Division 2 of Part 3 of Schedule 3 commences on the later of the day the Bill receives Royal Assent or immediately after the commencement of Part 1 of Schedule 2 to the Treasury Laws Amendment (2020 Measures No. 5) Act 2020.

Division 3 of Part 3 of Schedule 3 commences immediately after the commencement of section 2 of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020.

Division 4 of Part 3 of Schedule 3 commences immediately after the commencement of section 2 of the Treasury Laws Amendment (2020 Measures No. 6) Act 2020.

Proposal announced: This measure was announced on 5 May 2021.

Financial impact: These amendments are estimated to have a small but unquantifiable impact on receipts over the forward estimates period.

Human rights implications: Schedule 3 to this Bill does not raise any human rights issues - Chapter 4.

Compliance cost impact: The amendments are unlikely to have more than a minor impact on compliance costs.