House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

General outline and financial impact

Payslip reporting

Schedule 1 to this Bill amends the Superannuation Industry (Supervision) Act 1993 to repeal the payslip reporting provisions.

Date of effect: This measure commences on the day this Bill receives Royal Assent.

Proposal announced: This measure was released as an exposure draft for public consultation on 27 August 2014.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 1, paragraphs 1.14 to 1.17.

Compliance cost impact: Nil, but avoid additional compliance costs from being borne by employers in the future.

Consolidation and repeal of tax provisions

Schedule 2 to this Bill simplifies the taxation laws by:

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consolidating duplicated taxation administration provisions contained in various taxation Acts into a single set of provisions in Schedule 1 to the Taxation Administration Act 1953;

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repealing spent or redundant taxation laws; and

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moving longstanding regulations into the primary law.

Date of effect: These amendments generally apply from Royal Assent. However, the repeal of the duplicated taxation administration provisions and the transfer of certain regulations to the primary law are delayed till 1 July 2015 to give the Commissioner of Taxation time to make any necessary changes to administrative systems.

Proposal announced: This measure was released as an exposure draft for public consultation on 27 August 2014.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.66 to 2.81.

Compliance cost impact: This measure will reduce compliance costs for affected taxpayers. The overall magnitude of the compliance save is unquantifiable.

Financial Sector (Shareholdings) Act 1998

Schedule 3 to this Bill amends the Financial Sector (Shareholdings) Act 1998 to remove the deemed shareholding applied to an associate where the associate has no actual shareholding in the company.

Date of effect: This measure commences on the day this Bill receives Royal Assent.

Proposal announced: This measure has not previously been formally announced, but was released as an exposure draft for public consultation on 27 August 2014.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.25 to 3.28.

Compliance cost impact: This measure will reduce compliance costs for affected entities. The measure will result in an annual reduction in costs across the industry in the order of $70,000 per year.

Tax law rewrite: definition of Australia

Schedule 4 to this Bill rewrites provisions from the Income Tax Assessment Act 1936 into the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. This is another step towards achieving a single income tax assessment act for Australia.

The rewritten provisions define 'Australia' for income tax purposes. The income tax concept applies across other taxes, with amendments as required in order to retain intended policy differences.

The rewritten provisions generally make no policy changes. However, they include drafting changes needed to conform to the legislative approach used in the Income Tax Assessment Act 1997, to simplify how the law is expressed, and to remove any ambiguity about the operation of the law.

Date of effect: This rewrite applies to tax periods or quarters commencing on or after 1 July 2015.

Proposal announced: This measure was released as an exposure draft for public consultation on 27 August 2014.

Financial impact: Nil.

Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 4, paragraphs 4.99 to 4.104.

Compliance cost impact: This measure will reduce compliance costs for affected taxpayers. The overall magnitude of the compliance save is unquantifiable.