House of Representatives

Explanatory Memorandum

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

General outline and financial impact

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

This Schedule was prepared by the Treasury.

Schedule 1 to the Bill extends the current time limit on payment rules authorised by the Coronavirus Economic Response Package (Payments and Benefits) Act 2020. This amendment facilitates the JobKeeper scheme being extended to 28 March 2021.

Schedule 1 also amends the tax secrecy provisions in the TAA to allow protected information relating to the JobKeeper scheme to be disclosed to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus.

Date of effect: The amendments in Schedule 1 to the Bill commence from the day of Royal Assent.

Proposal announced: The extension to the JobKeeper scheme was announced by the Prime Minister and the Treasurer on 21 July 2020, with further changes announced on 7 August 2020. The changes to the tax secrecy provisions have not been previously announced.

Financial impact: The combined effect of the announced changes and the recent economic deterioration in Victoria bring the estimate of JobKeeper payments overall to $101.3 billion.

Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3.

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

Schedule 2 - JobKeeper-related provisions of the Fair Work Act 2009

This Schedule was prepared by the Attorney-General's Department.

Schedule 2 to the Bill supports the extended operation of the JobKeeper scheme for a further temporary period by providing employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

Part 1 of Schedule 2 extends the operation of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act until 28 March 2021, in line with the extended end date of the JobKeeper scheme. However, the flexibilities in Part 6-4C concerning annual leave will still be repealed at the start of 28 September 2020 per the original repeal date. The preservation of this repeal date for the annual leave provisions is given effect by Part 3 of Schedule 2.

Part 2 of Schedule 2 makes substantive changes to Part 6-4C of the Fair Work Act by creating two broad categories of employers who can access particular flexibilities under the Part in certain circumstances from 28 September 2020:

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employers who are eligible for JobKeeper payments after 28 September 2020 (qualifying employers); and

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employers who did receive one or more JobKeeper payments in the period prior to 28 September 2020, but no longer qualify for a payment after 28 September 2020 (legacy employers).

Qualifying employers will retain access to the full range of flexibility measures in Part 6-4C in the extended period of operation of the provisions (with the exception of annual leave provisions being repealed on 28 September 2020).

Legacy employers who have who have a certificate stating they have experienced a 10% decline in turnover will have access to modified flexibility measures from 28 September 2020.

Parts 4 and 5 of Schedule 2 make consequential amendments.

Date of effect: The extension of the operation of Part 6-4C of the Fair Work Act in Part 1 of Schedule 2 will commence on 27 September 2020, to ensure the original repeal on 28 September 2020 does not occur. This means flexibilities in place (that is, JobKeeper enabling directions or agreements under the existing provisions of Part 6-4C of the Fair Work Act) for qualifying employers will automatically be extended as a consequence.

The substantive amendments to Part 6-4C of the Fair Work Act in Part 2 of Schedule 2 will commence on Royal Assent to allow legacy employers and their employees to put arrangements in place for any new JobKeeper enabling directions or agreements made under the new provisions to be in effect from 28 September 2020.

Part 3 of Schedule 2 commences on 28 September 2020, to ensure the annual leave provisions are still repealed on that day.

Part 4 of Schedule 2 commences on 29 March 2021, immediately after the commencement of Part 2 of Schedule 1 to the Coronavirus Omnibus Act to make changes consequential to the repeal of the substantive JobKeeper flexibilities in the remaining provisions.

Part 5 of Schedule 2 commences at the same time as Part 2 of Schedule 1 to the JobKeeper Amendment Rules No. 8, to make changes consequential to those amendments.

Proposal announced: The extension of the Fair Work Act JobKeeper provisions was announced on 21 July 2020.

Financial impact: Nil.

Human rights implications: This Schedule raises human rights issues. See Statement of Compatibility with Human Rights - Chapter 3.

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