House of Representatives

Explanatory Memorandum

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

Glossary

The following abbreviations and acronyms are used throughout this explanatory memorandum.

General outline and financial impact

Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020

Schedule 1 to the Bill amends the Act to allow the Treasurer to make rules for a kind of Coronavirus economic response payment that is primarily intended to improve the prospects of individuals getting employment or increase workforce participation.

This amendment facilitates the JobMaker Hiring Credit scheme that was announced by the Government as part of the 2020-21 Budget. This scheme will operate until 6 October 2022.

Date of effect: The day after the Bill receives the Royal Assent.

Proposal announced: The Bill partially implements the JobMaker Hiring Credit measure from the 2020-21 Budget.

Financial impact: The JobMaker Hiring Credit measure is estimated to involve a cost of $4.0 billion over the 2020-21, 2021-22 and 2022-23 financial years.

Human rights implications: The Bill does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2.

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

Chapter 1 - Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020

Outline of chapter

1.1 Schedule 1 to the Bill provides for an additional kind of payment to be authorised by the Act to facilitate payments in relation to the JobMaker Hiring Credit scheme announced by the Government in the 2020-21 Budget. The scheme will operate from 7 October 2020 until 6 October 2022.

1.2 These amendments do not affect the prescribed period for the JobKeeper scheme or the rules which provide for that scheme in accordance with subsection 7(1). The JobKeeper scheme could not be extended beyond 28 March 2021 without further amendments to the Act by Parliament.

1.3 All legislative references in this Chapter are to the Act unless otherwise stated.

Context of amendments

1.4 The Act authorises the Treasurer to make rules to provide for payments to provide financial support to entities directly or indirectly affected by the Coronavirus. Any payments authorised by the Act are collectively referred to as 'Coronavirus economic response payments'. The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules) established the first such Coronavirus economic response payment, the JobKeeper payment.

1.5 Section 7 authorises rules being made in relation to one or more kinds of payments by the Commonwealth in respect of a time that occurs during the 'prescribed period', and the establishment of a scheme providing for matters relating to one or more such payments and matters relating to such a scheme. The Treasurer is authorised to make rules prescribing such matters under subsection 20(1) of the Act.

1.6 The term 'prescribed period' is defined in section 6 of the Act as the period between 1 March 2020 and 28 March 2021. This imposes a time limit on any payments made under section 7 through the related rules.

Summary of new law

1.7 Schedule 1 to the Bill amends the Act to provide for an additional kind of payment authorised by the Act during the relevant period. The relevant period is 7 October 2020 to 6 October 2022. This change facilitates the JobMaker Hiring Credit scheme which will operate from 7 October 2020 until 6 October 2022.

Comparison of key features of new law and current law

Detailed explanation of new law

1.8 The amendments extend the circumstances in which the rules can make provision for payments that are authorised by the Act to facilitate the JobMaker scheme.

1.9 They achieve this by introducing a new provision that authorises payments by the Commonwealth to an entity in respect of a time that occurs in the 'relevant period'. Such payments must be for the primary purpose of:

•

improving the prospects of individuals getting employment in Australia; or

•

increasing workforce participation in Australia.

[Schedule 1, item 3, subsection 7(1A)]

1.10 The amendments are restricted to facilitating payments under the JobMaker Hiring Credit scheme, which will support businesses to hire additional employees and expand their organisation to ensure young people can access new employment opportunities as the economy recovers from the Coronavirus

1.11 Rules will be made by the Treasurer to establish the JobMaker Hiring Credit scheme, including setting out:

•

which employers qualify for the payment;

•

the employees to which payments relate;

•

the amount payable and timing of payments; and

•

the obligations for recipients of the payment.

1.12 The amendments insert the definition of 'relevant period' in section 6. The 'relevant period' is 7 October 2020 and 6 October 2022. [Schedule 1, item 2, section 6]

1.13 This definition limits the time in respect of which payments that are authorised under the new provision can be made.

1.14 The amendments do not alter the existing provisions that authorise the JobKeeper scheme, including the 28 March 2021 limit for the period in relation to which payments under the JobKeeper scheme can be made. Further amendments to the Act would be required in order for the Treasurer to be authorised to make further rules in relation to any other types of payments, or to extend the period in relation to which payments under the JobKeeper scheme can be made.

Consequential amendments

1.15 These amendments also make a minor consequential amendment to subsection 7(2) to add a reference to the rules that may be made under the amendments made by the Bill. [Schedule 1, item 4, subsection 7(2)]

1.16 The amendments explain the constitutional basis for the Act. The Act relies on the legislative power under the Constitution with respect to matters that are peculiarly adapted to the government of a nation and cannot otherwise be carried on for the benefit of the nation. The Act also relies on all other legislative powers under the Constitution that are relevant to a payment authorised by the Act. [Schedule 1, item 5, section 21]

1.17 The amendments also amend the objects clause for the Act to clarify that the purpose for which payments that are authorised for the new provision is consistent with the objects of the Act. [Schedule 1, item 1, section 3]

Chapter 2 - Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020

2.1 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

2.2 Schedule 1 to the Bill amends the Act to allow the Treasurer to make rules for a kind of Coronavirus economic response payment that is primarily intended to improve the prospects of individuals getting employment or increase workforce participation.

2.3 This amendment facilitates the JobMaker Hiring Credit scheme that was announced by the Government as part of the 2020-21 Budget. This scheme will operate until 6 October 2022.

Conclusion

2.4 The Bill is compatible with human rights as it does not raise any human rights issues.