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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN
COLLECTION CENTRES) TAX AMENDMENT BILL 2018
EXPLANATORY MEMORANDUM
Circulated by authority of the Minister for Health, the Hon Greg Hunt MP
HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN
COLLECTION CENTRES) TAX AMENDMENT BILL 2018
OUTLINE
As part of the 2017-18 Budget measure 'Pathology Approved Collection Centres -
strengthening compliance', the Government announced it would implement a suite of
measures to strengthen compliance arrangements at a cost of $18 million from 2017-
18 to 2020-21. This Bill forms part of this comprehensive package of reforms.
The Department of Health is implementing the Government's direction for pathology
by reducing regulatory cost pressures for Approved Pathology Authorities (APAs) by
streamlining and strengthening compliance activities relating to prohibited practices.
Medicare benefits can be claimed for pathology services provided using specimens
collected at a pathology specimen collection centre approved under section 23DNBA
of the Health Insurance Act 1973 (an Approved (specimen) Collection Centre
(ACC)). Before an approval can be granted, the tax on the grant of the approval must
be paid and several documents must be submitted to the Department of Human
Services, including:
an application form;
a copy of the floor plan of the premises the collection centre will be located in;
the signed lease; and
assignment of lease documentation or proof of ownership of the premises where
the collection centre will be located.
The Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act
2000 (the 'Pathology Tax Act') currently only enables tax to be calculated for
approvals of up to one year. As a result, ACC approvals are granted for a maximum of
one year, with a tax of $1,000. This Bill amends the Pathology Tax Act so that a tax
can be calculated for approvals granted for a period of more than one year.
The Health Insurance (Eligible Collection Centres) Approval Principles 2010 (the
'Approval Principles') regulate the granting of ACC approvals and currently set the
period of an ACC approval at six months (for new approvals) or one year (for
renewals of existing approvals). This is an interim measure. It is proposed that at the
same time as the Bill amends the Pathology Tax Act, the Approval Principles will be
amended to extend ACC approval periods to two years. This will enable the
Government to reduce the regulatory burden on APAs, with APAs no longer having
to apply for approval of their ACCs yearly.
This Bill will provide for a tax on the grant of a two year approval to be $2,000, and
will retain the current nil rate of tax for ACCs on the same premises as a category GX
or category GY pathology laboratory. The changes will not negatively impact APAs
as there is no increase to the financial component other than the tax being paid two
yearly.
Financial Impact Statement
There is no financial impact in this Bill.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN
COLLECTION CENTRES) TAX AMENDMENT BILL 2018
This Bill is 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.
Overview of the Bill
This Bill amends the Health Insurance (Approved Pathology Specimen Collection
Centres) Tax Act 2000 (the 'Pathology Tax Act') to enable the tax payable on the
grant of an approval of an Approved (Specimen) Collection Centre (ACC) to be
calculated for approvals granted for periods longer than one year.
Medicare benefits can be claimed for pathology services provided using specimens
collected at an ACC.
Currently, the tax on an approval granted for an ACC for one year is $1,000. The Bill
will amend the Pathology Tax Act to provide for a tax of $2,000 on an approval
granted for a period of two years.
Extending the period of ACC approval to two years will require amendment to the
Health Insurance (Eligible Collection Centres) Approval Principles 2010, made under
the Health Insurance Act 1973.
The amendments to the Pathology Tax Act and the Health Insurance (Eligible
Collection Centres) Approval Principles 2010 are intended to commence on
1 July 2018 to align the amendments to the start of the financial year and meet the
Government's public commitment to reduce the regulatory burden for pathology
providers.
This Bill will result in a reduction in regulatory burden on approved pathology
authorities (APAs) that own and operate ACCs. Biennial applications for ACC
approval will deliver administrative efficiencies and will reduce administrative burden
to the pathology sector.
Streamlining existing approval processes for ACCs was announced as part of the
2017-18 Budget, Pathology Approved Collection Centres - strengthening compliance.
The amendment to the Pathology Tax Act will save APAs time in not having to
complete an application each year.
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Human rights implications
This Bill does not engage any of the applicable rights or freedoms. In assessing the
Bill, consideration was given to the right to the enjoyment of the highest attainable
standard of physical and mental health contained in article 12(1) of the International
Covenant on Economic, Social and Cultural Rights. The effects of the Bill are limited
to the business interests of persons granted an approval for an ACC. The measures in
the Bill will not inhibit the rights of natural persons to enjoy the highest attainable
standard of physical and mental health.
The amendments made by this Bill do not affect who is entitled to Medicare benefit,
or the amount of benefit to which they are entitled.
There are no human rights implications relating to this Bill.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The Hon Greg Hunt MP, the Minister for Health
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HEALTH INSURANCE (APPROVED PATHOLOGY SPECIMEN
COLLECTION CENTRES) TAX AMENDMENT BILL 2018
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides for the short title of the Act to be the Health Insurance (Approved
Pathology Specimen Collection Centres) Tax Amendment Act 2018.
Clause 2 - Commencement
Sections 1 to 3 of the Bill will commence on the day the Bill receives the Royal
Assent. Schedule 1 will commence on 1 July 2018 in order to align with the start of
the financial year.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to this Bill is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item has effect according to its terms. Schedule 1 amends the Health
Insurance (Approved Pathology Specimen Collection Centres) Tax Act 2000 (the
'Pathology Tax Act').
SCHEDULE 1 -- AMENDMENT OF THE HEALTH INSURANCE
(APPROVED PATHOLOGY SPECIMEN COLLECTION CENTRES) TAX ACT
2000
Items 1 and 2 Subsections 5(2) and (3)
Section 5 of the Pathology Tax Act imposes a tax on the grant of an ACC approval.
.
Item 1 amends subsection 5(2) to provide that the tax payable on an ACC approval
granted for a period of two years is $2,000. Previously, the tax payable was $1,000 for
an approval granted for a period of one year.
Item 2 amends the formula for the pro rata calculation of tax on an ACC approval in
subsection 5(3), consequential on the amendment made by item 1.
Item 3 addition at the end of Subsection 5(3)
This amendment adds a note to clarify for readers that a range of matters, including
the period for which an ACC approval may be granted, is dealt with in principles
made under section 23DNBA of the Health Insurance Act 1973. .
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