Explanatory Memorandum
(Circulated by authority of the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP)Chapter 6: Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Treasury Laws Amendment (2022 Measures No. 2) Bill 2022
Schedule 1 - Assisting businesses to meet their record-keeping obligations
Overview
6.1 Schedule 1 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.
6.2 Schedule 1 to the Bill amends Schedule 1 to the TAA 1953 to empower the Commissioner to direct an entity to complete an approved record-keeping course where the Commissioner reasonably believes the entity has failed to comply with its tax-related record keeping obligations as an alternative to existing financial penalties.
Human rights implications
6.3 Schedule 1 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
6.4 Schedule 1 to the Bill is compatible with human rights as it does not raise any human rights issues.
Schedule 2 - Sharing economy reporting regime
6.5 Schedule 2 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
6.6 Schedule 2 to the Bill amends Schedule 1 to the TAA 1953 to require electronic platform operators to provide information on transactions facilitated through the platform to the ATO. This measure implements a recommendation of the report of the Taskforce.
Human rights implications
6.7 The amendments made by Schedule 2 to the Bill engage the prohibition on arbitrary or unlawful interference with privacy contained in Article 17 of the International Covenant on Civil and Political Rights (ICCPR), as operators of electronic platforms will need to provide a range of personal information to the Commissioner about individuals that they collect in the course of their business.
6.8 The obligation for operators to report this information is compatible with the prohibition as it is neither arbitrary nor unlawful. The objective of the requirement to report this information is to ensure that sellers on these electronic platforms are paying the correct amount of tax by gathering information about potential tax liabilities.
6.9 Further, reporting regimes such as this provide more certainty and consistency of treatment for entities than the alternative, where the Commissioner collects information under his or her general information gathering powers on an ad-hoc basis. The information reported by operators would typically be limited to information that they already hold having collected it in the ordinary course of their business. Taxpayer information held by the ATO is subject to strict confidentiality rules that prohibit tax officials from making records or disclosing this information unless a specific legislative exemption rule applies.
6.10 The Commissioner may only require platforms to report information that relates to the identification, collection or recovery of a possible tax related liability as well as the identity of the taxpayer to which the tax related liability may arise.
6.11 The Commissioner retains flexibility to exempt certain entities from the reporting regime, for example to avoid double reporting or where reporting would be impractical. The Commissioner can also vary timeframes for reporting to ensure the compliance burden on operators of platforms is minimal.
Conclusion
6.12 The Bill is consistent with Article 17 of the ICCPR on the basis that its engagement of the right to privacy will neither be unlawful nor arbitrary. To this extent, the Bill complies with the provisions, aims and objectives of the ICCPR.
Schedule 3 - Removing the self-education expenses threshold
6.13 Schedule 3 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
6.14 Schedule 3 to the Bill reduces the compliance costs for individuals claiming work related self-education expenses by repealing the $250 non-deductible threshold for work-related self-education expenses in section 82A of the ITAA 1936.
6.15 Individuals must determine the deductibility of their self-education expenses by reference to section 8-1 of the ITAA 199 7, as affected by other general deduction limitations and any relevant specific deductions.
Human rights implications
6.16 Schedule 3 to the Bill does not engage any of the applicable rights or freedoms.
Conclusion
6.17 Schedule 3 to the Bill is compatible with human rights as it does not raise any human rights issues.
Schedule 4 - Increased Tribunal powers for small business tax decisions
Overview
6.18 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.
6.19 Schedule 4 to the Bill amends the TAA 1953 to enable small business entities to apply to the Small Business Taxation Division of the AAT for an order staying, or otherwise affecting, the operation or implementation of decisions of the Commissioner that are being reviewed by the AAT. This will enable the AAT to restrain the Commissioner from taking certain discretionary actions to collect disputed debts from small businesses while the relevant reviewable objection decisions in relation to small business taxation assessment decisions are under review.
Human rights implications
6.20 Schedule 4 to the Bill does not engage any of the applicable rights or freedoms, including the right to a fair trial and fair hearing rights.
6.18 The amendments enable the AAT to stay, or otherwise affect, the operation or implementation of a small business taxation decision under review if certain criteria are met. They do not affect the rights of small businesses to seek merits or judicial review of a reviewable objection decision, or any of their existing rights under law.
6.22 In addition, the review applicants will be business entities and not individuals because the amendments affect small business taxation assessment decisions only. As human rights do not apply to business entities, this amendment has no human rights implications.
Conclusion
6.23 Schedule 4 to the Bill is compatible with human rights as it does not raise any human rights issues.
Schedule 5 - Expanding eligibility for downsizer contributions
Overview
6.24 Schedule 5 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.
6.25 Schedule 5 to the Bill amends the ITAA 1997 to extend access for individuals to make downsizer contributions to their superannuation plan from the proceeds of selling their main residence by reducing the eligibility age from 60 to 55 years.
Human rights implications
6.26 Schedule 5 to the Bill positively engages the right to social security under Article 9 of the International Covenant on Economic, Social and Cultural Rights.
6.27 The right to social security requires Australia to, within its maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.
6.28 Schedule 5 to the Bill improves the right to social security in Australia by expanding access to downsizer contributions to Australians between the ages of 55 and 59, who did not previously have access to the downsizer scheme. Expanding eligibility to make downsizer contributions constitutes a positive interaction with the right to social security because it allows more people to make additional contributions to their superannuation funds.
Conclusion
6.29 Schedule 5 to the Bill is compatible with human rights because it positively engages the right to social security.