House of Representatives

Explanatory Memorandum

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

Chapter 1 - Amendments relating to Coronavirus economic response payments

Outline of chapter

1.1 Schedule 1 to the Bill amends the Payments and Benefits Act to allow the Treasurer to make rules for a kind of Coronavirus economic response payment to an entity where the payment is to provide support to the entity because it has been adversely affected by restrictions imposed by a State or Territory by way of a public health order that is directed at preventing or controlling the transmission of the Coronavirus between members of the public.

Context of amendments

1.2 The Payments and Benefits Act authorises the Treasurer to make rules to provide for payments to support entities directly or indirectly affected by the Coronavirus. Any payments authorised by the Payments and Benefits Act are collectively referred to as 'Coronavirus economic response payments'.

1.3 The first such Coronavirus economic response payment was the JobKeeper payment. The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 9) 2020 later introduced the JobMaker Hiring Credit payment.

1.4 The amendments made by the Bill will facilitate the establishment of a national approach for Coronavirus business support payments across all States and Territories in the event that significant restrictions are imposed by way of a State or Territory public health order.

Summary of new law

1.5 Schedule 1 to the Bill amends the Payments and Benefits Act to provide for an additional kind of payment authorised by the Act in relation to the period beginning 1 July 2021 until 31 December 2022.

1.6 The payment must be for the purpose of providing financial support to entities that are adversely affected by restrictions imposed under a public health order of a State or Territory to prevent or control the transmission of the Coronavirus.

Comparison of key features of new law and current law

Detailed explanation of new law

1.7 The measure extends the circumstances in which the rules can make provision for payments that are authorised by the Payments and Benefits Act.

1.8 The amendments made by the Bill achieve this by introducing a new power for the Treasurer to authorise payments by the Commonwealth to an entity that is adversely affected by a Coronavirus related State or Territory public health order in respect of a time that occurs on or after 1 July 2021 and on or before 31 December 2022. [Schedule 1, item 1, subsection 7(1B) of the Payments and Benefits Act]

1.9 Rules will be made by the Treasurer to establish the payment, including setting out:

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which entities qualify for the payment;

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the amount payable and timing of payments; and

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the obligations for recipients of the payment.

1.10 Any new payment scheme will be administered by the Commissioner of Taxation in accordance with general administrative framework set out in the Taxation Administration Act 1953.

Application and transitional provisions

1.11 The Treasurer may establish a new payment scheme after the Bill receives the Royal Assent in relation to a period occurring between 1 July 2021 to 31 December 2022.