Treasury Laws Amendment

21 June 2023


I'm pleased to take this opportunity to also rise to speak on the Treasury Laws Amendment (2023 Law Improvement Package No.1) Bill 2023. As part of its regulatory stewardship role, the government is progressing amendments to ensure that Treasury portfolio legislation remains current and fit for purpose. The amendments in this bill are mostly technical but they will reduce the complexity in Australia's corporations and financial services law, increase its navigability and enhance its clarity, and they supplement the law improvement amendments in the Treasury Laws Amendment (Modernising Business Communications) Bill.


I want to acknowledge the ongoing work, which often doesn't receive much attention, of the Assistant Treasurer and the Department of the Treasury. It is an ongoing package of work to ensure that these laws are fit for purpose, and to reduce complexity. These amendments relate to an enormous number of laws, so it is an ongoing piece of work, as I say, one that doesn't always receive a lot of attention. A lot of work goes into it, and it really does make a difference.


The reforms in this bill implement recommendations made by the Australian Law Reform Commission in its interim reports for the Review of the Legislative Framework for Corporations and Financial Services Regulation to simplify and rationalise Australia's corporations and financial services law. The ALRC's recommendations in its interim reports are designed for immediate implementation prior to the release of its final report on 30 November this year. The recommendations address technical issues and have widespread support. This follows an extensive consultation process on these amendments.


I will now to talk to the detail of the changes in this bill. Schedules 1 to 3 of the bill enact recommendations made by the Australian Law Reform Commission in interim report A and interim report B of its Review of the Legislative Framework for Corporations and Financial Services Regulation. The purpose of the review is to inquire into the potential simplification and rationalisation of Australia's financial services law. Schedules 1 to 3 of the bill improve the navigability of and simplify the law by unfreezing the Acts Interpretation Act 1901 so that the current version applies to the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001. They create a single glossary of all defined terms in section 9 of the Corporation Act. They repeal redundant provisions, including definitions that are no longer used and cross-references to repeal provisions, they correct errors and they improve clarity, with a particular focus on terms defined as having more than one meaning and definitions containing substantive obligations. You can see there the changes that these schedules are making, which will make this more usable for people and make these laws easier to understand and less unnecessarily complex.


Schedule 4 of this bill relates to insurance and makes amendments to the Insurance Acquisitions and Takeovers Act 1991, the Life Insurance Act 1995 and Insurance Act 1973. These acts are enabling acts of certain legislative instruments regulating the insurance industry that are due to sunset on 1 October this year. Sunsetting is the automatic repeal of legislative instruments after a certain date unless action is taken to retain them. It is important to ensure that legislative instruments are kept up to date and only remain in force for as long as they are needed. The purpose of the relevant insurance acts is to protect policyholders by regulating the types of persons that may carry on insurance businesses and to prescribe standards to ensure the prudent management of the insurance industry. The amendments will help to ensure that the sunsetting insurance instruments that are still necessary are up to date and fit for purpose when they are remade. The amendments in schedule 4 of the bill are primarily technical and include updating certain provisions to reflect modern communication practices, allowing regulators to administratively prescribe the manner and form of certain notices to increase flexibility and align with modern drafting practices, and moving some provisions in the insurance instruments into the primary legislation.


Schedule 5 of the bill relates to the rationalisation of ending ASIC instruments. Schedule 5 of the bill amends the Corporations Act and the National Consumer Credit Protection Act 2009 to incorporate longstanding matters currently contained in Australian Securities and Investments Commission, ASIC, legislation. Long-term reliance on ASIC's exemption and modification powers to update the law for changing circumstances makes it difficult for regulated entities to understand the full state of the law as it applies to them. The amendments in schedule 5 of the bill improve the clarity of the law, provide certainty and make it simpler for regulated entities and consumers to understand their rights and obligations.


Schedule 6 of the bill brings together the minor and technical amendments that are required. These minor and technical amendments amend various laws in the Treasury portfolio to ensure those laws operate in accordance with the policy intent, make minor changes to improve administrative outcomes and remedy unintended consequences, as well as to correct technical and drafting defects. The amendments have been identified by a number of Treasury portfolio agencies, the Office of Parliamentary Counsel and policy divisions within Treasury, including as a result of the consultation with affected users of the laws.


It is such an important process that Treasury does in consulting with the people that use these laws and using that information to improve them in bills such as this. The amendments made by schedule 6 to the bill reflect the government's commitment to the ongoing care and maintenance of Treasury laws to rectify minor problems with the law that prevent it from operating as intended, making it easier for Australians to comply with these laws.


The minor and technical amendments process was first supported by a recommendation of the 2008 Tax Design Review Panel, which was appointed to examine how to reduce delays in the enactment of tax legislation and improve the quality of tax law changes. It has since been expanded to all Treasury portfolio legislation. As you can see, the changes that are included in this bill are not necessarily that exciting and they don't necessarily get that much attention often, but it is a really important ongoing process. Having worked at Treasury, I know firsthand the complicated and difficult work, and the important consultation work, that goes into this ongoing process of amendments to ensure these laws are fit for purpose and fit with modern life in Australia so that people who use these laws find it as easy as possible to comply with them, which is, of course, very important to ensure that the laws serve their intent. So it really is an important part of the work of the Treasury and the Assistant Treasurer, and I just want to acknowledge that ongoing work.


I've just followed a speech from the member from Bradfield, who took the opportunity to talk about our superannuation changes for those with accounts over $3 million. Given that he has talked about that in the debate on this bill, I thought I would respond. Our government has been completely upfront about the challenges that are facing our economy and the budget. We are making this modest adjustment to superannuation tax breaks for earnings on balances above $3 million, a change that will not come into effect until after the next election. Ninety-nine point five per cent of Australians with super accounts will still receive the same generous tax breaks that they do, and that 0.5 per cent of people who have balances over $3 million who will be affected by this change will still receive tax breaks, but they will be slightly less generous. That is how our policy works.


But we have seen, unfortunately, the scaremongering from the opposition that we have become so used to. The member for Bradfield talked a lot about dishonesty. I think really they need to look at the way they are talking about this policy to the public. In fact, just this week there was a motion put forward by a member of the opposition claiming that this would impact young people. I think that is quite misleading about the intent of this policy, because basically a young person earning $90,000 a year today, and projecting an increasing salary throughout their life, will almost never accumulate $3 million in their super accounts. In fact, Treasury projects that, in 2052, only the top 10 per cent of earners retiring that year will have more than $3 million in their super accounts. So it's pretty clear that the coalition are not talking to young people in their electorates. This is a change affecting people with the highest superannuation balances, 0.5 per cent of Australians. They will still receive generous tax breaks on that superannuation, but they will be slightly less generous as we deal with the debt that we have inherited from a decade of coalition government.


Let's not forget what we're talking about here. We're talking about the superannuation system that Labor built, which is the envy of the world. The only reason that young people could even dream of a $3 million super balance in their retirement is Labor's superannuation policy and our commitment to always protect that superannuation policy. It is Australians' own money, for their retirement. We will always defend that. Those on the opposite side will always attack the superannuation system, because they don't believe in it. We saw this during COVID, when the first place they looked for money for younger people was superannuation balances. We know, and young people know, that most young people don't have a lot of money in their superannuation; they are just beginning that journey of building it. Taking out money that is in there today robs their future self of money that would grow over their entire working life to help support them in their retirement. This is such an important principle. People who were forced, in a sense, to access that money during COVID will now not benefit from that in their retirement. If the Liberals and Nationals were particularly concerned about young people during the pandemic, perhaps they should have provided more support at the time to casual employees, through the JobKeeper scheme, and to students, who were largely left out of their assistance packages.


We are proposing a modest change to tax that, as I say, will not come into effect until after the next election. We cannot be more upfront about that. It is a very modest change, for those with the absolutely highest wealth in this country, people with balances of over $3 million. I suggest to the member for Bradfield that he should not be scaremongering about this policy that only affects a tiny minority of people, in a modest way. Perhaps he should focus on the coalition's plans for the future and come up with some ideas for the Australian people rather than just opposing everything and, worse still, scaremongering about the impacts of policies on people in our community.