Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020 - Commentary on Ministerial Responses [2020] AUSStaCSBSD 236 (9 December 2020)

• Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020
• Significant matters in delegated legislation24

---

Foreign Acquisitions and Takeovers Fees Imposition Amendment Bill 2020

Purpose	This bill is part of a package which seeks to amend the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 in order to strengthen and simplify the foreign investment framework, while continuing to offset the cost of the package by simplifying existing fee arrangements
Portfolio	Treasury
Introduced	House of Representatives on 28 October 2020
Bill status	Passed both Houses on 8 December 2020

Significant matters in delegated legislation^[2]

2.1 In Scrutiny Digest 16 of 2020 the committee requested the Treasurer's advice as to whether guidance in relation to the method of calculation of the fees in proposed section 6, which are imposed as taxes, can be included on the face of the bill.^[25]

Treasurer's response^[26]

2.2 The Treasurer advised:

Currently, fee amounts are set in the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 and in the Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015. The power in proposed subsection 6(2) to place all fee amounts in the regulations is therefore not dissimilar to the current legislation.
This legislative design approach supports the Government’s objective to establish a simpler fee framework. Prescribing the amount of a fee in a single piece of legislation (the regulations) creates a more user-friendly experience.
Additionally, allowing the regulations to list the fee amounts will provide the Government with the necessary flexibility to make timely amendments. However, we note there are protections included in the legislation place appropriate limits on the flexibility provided. For example, once amended, the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 will include a cap to limit the maximum fee that can be set and as the regulations are subject to disallowance parliamentary scrutiny over the regulations remains in place.

Committee comment

2.3 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the approach of providing for fee amounts in the regulations supports the government’s objective to establish a simpler fee framework and that prescribing the amount of a fee in a single piece of legislation creates a more user-friendly experience.

2.4 While noting this advice, the committee reiterates its consistent scrutiny view that it is for the Parliament, rather than makers of delegated legislation, to set a rate of tax. In this case, the fact that a maximum cap is set in the primary legislation partly addresses the committee’s scrutiny concerns. However, any delegation to the executive of legislative power in relation to taxation still represents a significant delegation of the Parliament’s legislative powers. In addition, the committee notes that the objective of prescribing the amount of a fee in a single location could be achieved by setting out the amount of all fees on the face of the primary legislation.

2.5 While the committee welcomes the important limitation in the bill on the proposed power to set the rate of taxation through regulations, the committee reiterates its consistent scrutiny view that it is for the Parliament, rather than makers of delegated legislation, to set a rate of tax.

2.6 The committee also draws this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.

2.7 In light of the fact that this bill has already passed both Houses of the Parliament the committee makes no further comment on this matter.

---

24 Schedule 1, item 7, proposed sections 5 and 6. The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(iv).

[25] Senate Scrutiny of Bills Committee, Scrutiny Digest 16 of 2020, pp. 8-9.

[26] The Treasurer responded to the committee's comments in a letter dated 1 December 2020. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 17 of 2020 available at: www.aph.gov.au/senate_scrutiny_digest