Senate

Supplementary Explanatory Memorandum relating to sheet PC122

(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)

Chapter 2: Statement of Compatibility with Human Rights

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

Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 - Parliamentary Amendments to Schedule 1

Overview

2.1 The Parliamentary Amendments to Schedule 1 to the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 (the Bill) are 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.

2.2 The Parliamentary Amendments to Schedule 1 to the Bill:

•

extend the minimum lease period for dwellings in an active BTR development from three years to five years, requiring dwellings to either be made available to the public to be tenanted for a lease term of at least five years or tenanted for lease terms of at least five years;

•

require each of the dwellings to be made available to the public to be tenanted or tenanted by way of lease in accordance with any requirements relating to lease terms that are determined by the Minister by legislative instrument;

•

amend the definition of 'affordable dwelling' to provide that a dwelling is an affordable dwelling if it satisfies the requirements determined by the Minister by legislative instrument;

•

revise the provisions that deal with the BTR misuse tax by imposing liability to pay the BTR misuse tax on the entity that owns the BTR development immediately before that development ceased to be an active BTR development;

•

adjust the way the BTR misuse tax is calculated;

•

extend the notification obligation relating to the acquisition of an ownership interest in the BTR development, requiring both the acquiring entity as well as the disposing entity to notify the Commissioner of the change of ownership interest within 28 days of the change of ownership event. This extended notification obligation assists with the administration of the BTR misuse tax; and

•

extend eligibility for the MIT withholding tax concession to all BTR developments that satisfy the eligibility requirements, even if the development existed, or construction on the development had commenced, before or on 7:30 pm (by legal time in the Australian Capital Territory) on 9 May 2023.

2.3 The purpose of these Parliamentary Amendments is to address stakeholder feedback and key concerns with provisions in Schedule 1 to the Bill.

Human rights implications

2.4 The Parliamentary Amendments to Schedule 1 to the Bill are 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.

2.5 The Parliamentary Amendments to Schedule 1 to the Bill engage the following rights:

•

Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) - the right to an adequate standard of living; and

•

Article 12(1) of the ICESCR - the right to health.

2.6 The Parliamentary Amendments to Schedule 1 to the Bill engage the right to an adequate standard of living, including food, water and housing under Article 11 of the ICESCR.

2.7 The right to an adequate standard of living provides that Australia must take appropriate steps towards the realisation of this right in its jurisdiction, and that the relevant standard must be continuously improving.

2.8 The United Nations Committee on Economic, Social and Cultural Rights (the Committee) has stated that the 'right to adequate housing, which is thus derived from the right to an adequate standard of living, is of central importance for the enjoyment of all economic, social and cultural rights'. ^[1] The Committee has highlighted the importance of housing affordability as part of this right:

'Personal or household financial costs associated with housing should be at such a level that the attainment and satisfaction of other basic needs are not threatened or compromised ... States parties should establish housing subsidies for those unable to obtain affordable housing, as well as forms and levels of housing finance which adequately reflect housing needs.' ^[2]

2.9 The Parliamentary Amendments to Schedule 1 to the Bill also engage the right to health under Article 12 of the ICESCR. Article 12 of the ICESCR protects the right of all individuals to enjoy the highest attainable standards of physical and mental health. The Committee has stated that the right to health embraces a wide range of socio-economic factors that promote conditions in which people can lead a healthy life, which includes housing.

2.10 The Parliamentary Amendments to Schedule 1 to the Bill engage these rights by seeking to improve housing outcomes for Australians:

•

the amendments increasing the minimum lease period from three years to five years supports the long-term security of tenure for tenants in BTR developments. This aims to incentivise long-term rental supply within these developments, ensuring tenants have access to an adequate standard of housing and secure housing for a longer period;

•

the amendments requiring each of the dwellings to be made available to the public to be tenanted or tenanted by way of lease in accordance with any requirements relating to lease terms that are determined by the Minister by legislative instrument. It is intended that the requirements determined will support the rights of tenants in the BTR developments. Specifically, it is intended that the Minister will impose requirements prohibiting leases for dwellings in a BTR development from containing terms allowing the eviction of a tenant without the tenant having breached their tenancy agreement, or without being provided a reason as to why the tenancy is being terminated (where such a lease term requirement is permissible under a law of a State or Territory); and

•

the amendments extending eligibility for the MIT withholding tax concession to BTR developments that existed, or for which construction commenced, before or on 7:30pm (by legal time in the Australian Capital Territory) on 9 May 2023 seeks to incentivise ongoing supply of long-term rental stock, in particularly affordable tenancies; and

•

the amendments that alter the definition of 'affordable dwelling', revise the provisions that deal with the BTR misuse tax and extend the notification obligation, do not engage any of the applicable rights or freedoms and do not affect the initial analysis of human rights issues conducted for the Bill.

2.11 Thus, the Parliamentary Amendments to Schedule 1 to the Bill allow Australians to meet an adequate standard of housing and support the attainment and satisfaction of their other needs. The Parliamentary Amendments therefore promote the right to an adequate standard of living, including food, water and housing. The amendments also improve the right to health by incentivising continued investment in rental housing stock (including affordable tenancies).

Conclusion

2.12 The Parliamentary Amendments to Schedule 1 to the Bill are compatible with human rights as they support the right to an adequate standard of living, and the right to health.

2.13 The Parliamentary Amendments to Schedule 1 to the Bill do not raise any other human rights issues.