House of Representatives

Explanatory Memorandum

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

Chapter 6 - Electronic invoicing implementation

Outline of chapter

6.1 Schedule 6 to the Bill amends the TAA to confer on the Commissioner functions and powers to develop and/or administer a framework or system for electronic invoicing.

Context of amendments

6.2 Electronic invoicing is the electronic exchange of invoices and other procurement related information and documentation between suppliers and buyers. Establishing an electronic invoicing regime provides an opportunity to streamline invoice transactions. In the electronic invoicing context, 'invoice' includes what are traditionally regarded as invoices and other procurement related information and documentation. Electronic invoicing removes the need for businesses to create invoices that then have to be scanned, posted or emailed, and manually entered into the receiver's accounting system. An electronic invoice can be sent directly to a customer's system, even if the two businesses are using different accounting software. Deloitte Access Economics estimates that electronic invoicing could result in economy-wide benefits of up to $28 billion over ten years. Electronic invoicing reduces processing times and errors leading to faster payment. Electronic invoicing will reduce the costs of doing business for both government and industry and also support the Government's policy of improving payment times to small business.

6.3 The Australian and New Zealand governments are working together to pursue common approaches to electronic invoicing as part of the Single Economic Market agenda. In March 2018, the Australian and New Zealand Prime Ministers agreed to a trans-Tasman approach to electronic invoicing. On 22 February 2019, the Prime Minister jointly announced with the New Zealand Prime Minister the two countries' intention to adopt the Pan-European Public Procurement Online interoperability framework for trans-Tasman electronic invoicing.

6.4 The Pan-European Public Procurement Online interoperability framework is a secure network that enables government organisations and private enterprises to exchange business documents, such as invoices, electronically. The Pan-European Public Procurement Online interoperability framework connects different electronic procurement and invoicing systems by establishing a set of common business processes and technical standards. This provides a seamless exchange of information between trading partners who use different software applications. The Pan-European Public Procurement Online interoperability framework is currently used in over 30 countries across Europe, Asia and North America. It is proposed that the Commissioner become the Australian local Pan-European Public Procurement Online Authority due to the skills and experience the Commissioner has with similar projects. However, the Commissioner does not currently have specific functions and powers related to electronic invoicing.

Summary of new law

6.5 Schedule 6 to the Bill amends the TAA to confer on the Commissioner:

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functions to develop and/or administer a framework or system for electronic invoicing; and

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powers to do all things necessary or convenient to be done for or in connection with the performance of those functions.

Comparison of key features of new law and current law

Detailed explanation of new law

6.6 Schedule 6 to the Bill amends the TAA to confer on the Commissioner functions and powers related to electronic invoicing.

6.7 Schedule 6 to the Bill provides that the Commissioner's functions include the function of developing and/or administering a framework or system for electronic invoicing. These are broad functions that give the Commissioner the flexibility to determine how to most efficiently and effectively implement an electronic invoicing regime. [Schedule 6, item 2, subsection 3G(1) of the TAA 1953]

6.8 These functions are not limited to developing or implementing electronic invoicing for use solely within Australia. The Commissioner can develop and/or administer a framework or system for electronic invoicing that may connect to, or be accessed by, users in other countries.

6.9 Schedule 6 to the Bill also provides that, without limiting the functions conferred on the Commissioner by the Bill, the Commissioner may develop the framework or system by adopting, with appropriate modification, a system for electronic invoicing operating outside Australia. This could allow the Commissioner to, for example, adopt the Pan-European Public Procurement Online interoperability framework for electronic invoicing, for use both in Australia and for trans-Tasman and other international transactions. [Schedule 6, item 2, subsection 3G(2) of the TAA 1953]

6.10 Schedule 6 to the Bill gives the Commissioner the power to do all things that are necessary or convenient to be done for or in connection with the performance of the functions conferred by Schedule 6 to the Bill. This is intended to ensure a comprehensive conferral of power to allow the Commissioner to carry out the functions described above. [Schedule 6, item 2, subsection 3G(3) of the TAA 1953]

6.11 Schedule 6 to the Bill also provides that three specific powers are included in the power to do all things that are necessary or convenient to be done for or in connection with the performance of the functions:

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the power to enter into agreements for integrating the framework or system for electronic invoicing that the Commissioner operates with frameworks or systems for electronic invoicing that operate outside Australia;

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the power to enter into agreements for accessing the framework or system that the Commissioner operates; and

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the power to liaise with foreign countries and agencies, and other entities, of foreign countries to develop common approaches to electronic invoicing between countries. [Schedule 6, item 2, subsection 3G(4) of the TAA 1953]

6.12 These specified powers do not limit the broader power to do all things that are necessary or convenient to be done for or in connection with the performance of the Commissioner's functions. Rather, the powers are specified to remove any doubt that the Commissioner can engage in the described activities.

6.13 Schedule 6 to the Bill also provides that the conferral of powers and functions on the Commissioner does not limit any other functions or powers that the Commissioner has. [Schedule 6, item 2, subsection 3G(5) of the TAA 1953]

Application and transitional provisions

6.14 The amendments made by Schedule 6 to the Bill commence and apply from the day after Royal Assent.