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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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Schedule 1 to the bill amends the Foreign Acquisitions and Takeovers Act
1975 to double the maximum financial penalties for contraventions of
provisions that relate only to residential land.
Schedule 2 to the bill amends the Taxation Administration Act 1953
to allow protected information to be disclosed to Australian government agencies
for the purpose of administering major disaster
support programs approved by the
minister.
Schedule 3 to the bill amends Schedule 5 of the Coronavirus Economic
Response Package Omnibus (Measures No. 2) Act 2020 to extend a temporary
mechanism for responsible ministers to make alternative arrangements for meeting
information and documentary
requirements under Commonwealth legislation,
including requirements to give information and produce, witness and sign
documents,
in response to COVID-19.
Schedule 4 to the bill make amendments to reduce the tax rate on certain
income earned by foreign resident workers participating in
the Pacific Australia
Labour Mobility scheme from marginal rates starting at 32.5 per cent to a flat
15 per cent.
Schedule 5 to the bill amends the Superannuation Industry (Supervision)
Act 1993 to provide for an alternative annual performance test for
faith-based products.
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Portfolio
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Treasury
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Introduced
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House of Representative on 8 September 2022
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1.112 Section 365-25 of Schedule 1 to the Taxation Administration Act 1953 currently provides that it is an offence if a person records or discloses protected information, with a maximum penalty of imprisonment for two years. Item 2 of Schedule 2 to the bill seeks to insert a new defence this offence.[86]
1.113 Proposed subsection 365-25(8) provides that it is a defence to the offence set out under existing section 3652-25 if the record is made for, or the disclosure is to, an Australian government agency and the record or disclosure is for the purpose of administering a program declared under section 355-66 to be a major disaster support program. A defendant bears an evidential burden in relation to this defence.
1.114 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence.[87] This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.
1.115 In relation to the defence set out under item 2, the explanatory memorandum states:
The reversal of the evidential burden of proof is consistent with the Attorney-General’s Department’s A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011 edition.
It is appropriate that the evidential burden be reversed in this situation. Matters relating to the disclosure of protected information and for which purposes (such as what information is being disclosed and for what purpose the disclosure is being made) are peculiarly within the knowledge of the person making the disclosure as the defendant is the only person who will be aware of to whom the information has been disclosed or that it was disclosed in reliance of the exception. It would be significantly more difficult and costly for the prosecution to disprove these facts.[88]
1.116 As alluded to in this explanation, the Guide to Framing Commonwealth Offences[89] provides that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the offence) where:
• it is peculiarly within the knowledge of the defendant; and
• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.[90]
1.117 In this instance, it does not appear that several of the matters relevant to a proposed subsection 365-25(8) defence would be peculiarly within the knowledge of the defendant. For example, it appears that the fact that a disclosure was made to a government agency in relation to a section 355-66 program is a matter that the prosecution could readily ascertain. These matters therefore appear to be matters more appropriate to be included as elements of the offence.
1.118 The committee further notes that it does not consider that consistency with existing provisions is a sufficient justification for reversing the evidential burden of proof in relation to matters which do not appear to be peculiarly within the knowledge of the defendant.
1.119 The committee considers it is not appropriate to reverse the evidential burden of proof in relation to matters that are not peculiarly within the knowledge of the defendant. The committee therefore requests the minister's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in this instance.
1.120 Schedule 2 to the Treasury Laws Amendment (Your Future, Your Super) Act 2021 (Your Future, Your Super Act) requires the Australian Prudential Regulation Authority (APRA) to conduct an annual superannuation performance test for certain superannuation products. Schedule 5 to the bill seeks to amend this process to provide for an alternative supplementary performance test for faith-based superannuation products. Under this new process, if a faith-based product fails the original assessment it is then required to undergo the supplementary faith-based test. A superannuation trustee is only subject to the consequences of a failed performance if it also fails the supplementary test.
1.121 The committee commented on Schedule 2 of the then Treasury Laws Amendment (Your Future, Your Super) Bill 2021 in Scrutiny Digest 4 of 2021 and Scrutiny Digest 6 of 2021 in relation to the inclusion of significant matters within delegated legislation.[92] The committee was concerned that Schedule 2 of that bill was characterised by 'framework provisions' which contain only the broad principles of a legislative scheme while relying heavily on delegated legislation to determine the scheme's scope and operation. The committee has longstanding concerns with framework provisions because they considerably limit the ability of Parliament to have appropriate oversight over new legislative schemes.
1.122 The amendments introduced by Schedule 5 of this bill mirror the framework approach already taken by the Your Future, Your Super Act by leaving significant elements of the new supplementary test scheme to the regulations. For example, a 'faith-based product' is defined by the bill as a Part 6A product which APRA has determined under proposed subsection 60L(4) to be a faith-based product.[93] A 'Part 6A product' is defined as a MySuper product or a class of beneficial interest in a regulated superannuation fund that is identified by regulations.[94] Other than MySuper products, a superannuation product must therefore be identified in regulations and then specified in a determination in order to be defined as a faith-based product. Determinations made by APRA under proposed subsection 60L(4) are themselves made on the basis of an application given to APRA which must contain information specified by the regulations.[95] Regulations made for that purpose may specify information by reference to information already specified in a legislative instrument.[96]
1.123 Many other significant elements of the scope and operation of this new legislative scheme are left to delegated legislation. For example, the requirements relating to the supplementary test may be specified within the regulations.[97]
1.124 The committee's position is that significant matters should be included within primary legislation unless a sound justification for the use of delegated legislation is provided. Where substantial elements of the scope and operation of a legislative scheme are proposed to be left to delegated legislation, the committee's already significant concerns will be further heightened.
1.125 In this instance, the explanatory memorandum does not contain any justification for the framework approach taken by the bill but does justify individual uses of delegated legislation. For example, in relation to the power to specify requirements for the supplementary test, the explanatory memorandum states:
These regulation-making powers reduce the complexity of the [Superannuation Industry (Supervision)] Act by removing the administrative and technical matters from the primary law and unfolding that detail in a lower level of legislation. This accords with hierarchy of laws principles and increases the readability of the SIS Act. As a consequence, this may increase the level of understanding about responsibilities and obligations and, ultimately, compliance with regulatory expectations.[98]
1.126 The committee acknowledges that it is appropriate to include certain administrative and technical matters within delegated legislation. For example, highly technical scientific information may be appropriate for inclusion within delegated legislation on the basis that the law-making process should include considerable input from experts within the executive. However, in this instance, it appears that substantial elements of the scope and operation of the legislative scheme proposed to be introduced by Schedule 5 of the bill will be left to delegated legislation. The committee considers that it would be more appropriate to include this information within the primary legislation to allow an appropriate level of parliamentary oversight.
1.127 The committee's concerns in this regard are heightened given that other key elements of the supplementary test scheme are set out in what appear to be non‑legislative instruments. Specifically, Schedule 5 includes several provisions allowing the minister to set out certain matters within determinations. [99] There is nothing on the face of the bill, or within the explanatory memorandum, clarifying whether determinations made by the minister under Schedule 5 are legislative instruments. Given that it appears that these determinations are intended to be non-legislative in nature, the committee notes that significant elements of the scheme set up by Schedule 5 will thus be contained within instruments that are not subject to the tabling, disallowance or sunsetting requirements that apply to legislative instruments or scrutiny by the Senate Standing Committee for the Scrutiny of Delegated Legislation.
1.128 In light of the above, the committee requests the minister's detailed advice as to:
• why it is considered necessary and appropriate to leave almost all of the information relating to the scope and operation of the new supplementary performance test for faith-based superannuation products to delegated legislation and non-legislative instruments; and
• whether the bill can be amended to include at least high-level guidance regarding these matters on the face of the primary legislation.
Availability of merits review[100]
1.129 Item 2 of Schedule 5 to the bill seeks to insert proposed section 60L into the Superannuation Industry (Supervision) Act 1993. As noted above, Schedule 5 to the bill introduces a new supplementary performance test for faith-based superannuation products. Proposed subsection 60L(4) provides that APRA may determine that a product is a faith-based product for a financial year if a trustee provides APRA with a valid application between 1 February of the prior financial year and 31 January of the relevant financial year. Under proposed subsection 60N(1), APRA may decide to revoke a subsection 60L(4) determination.
1.130 The committee considers that, generally, administrative decisions that will, or are likely to, affect the interests of a person should be subject to independent merits review unless a sound justification is provided. It appears that decisions made by APRA under proposed subsection 60L(4) and proposed subsection 60N(1) will, or are likely to, affect individual interests. However, there is nothing on the face of the bill, or within the explanatory memorandum, stating that either decision is subject to independent merits review. The committee expects any justification for excluding merits review to refer to the Administrative Review Council's guidance document, What decisions should be subject to merits review?.
1.131 In relation to a decision made under proposed subsection 60L(4), the explanatory memorandum states:
APRA’s decision whether or not to determine a product is a faith-based product will not be a ‘reviewable decision’ within the meaning of the SIS Act. The omission of merits review is in accordance with the Administrative Review Council’s guide, What decisions should be subject to merits review?, which states that decisions that automatically follow from the happening of certain circumstances are unsuitable for merits review. APRA’s decision is an automatic decision, following from the submission of an application that contains the required information. The requirements for the faith-based status determination are clearly specified in the SIS Act (and will be further specified in the regulations) and the determination is based on whether certain information, already available to trustees, is provided to APRA or not. Upon the occurrence of a valid application, there is nothing on which merits review can operate.[101]
1.132 It is not clear to the committee why the explanatory memorandum states that a decision to determine that a product is a faith-based product for a financial year is an automatic decision when proposed subsection 60L(4) states that if the trustee gives an application within the relevant period APRA may make a determination. The committee further notes that there is nothing on the face of the bill mandating that a subsection 60L(4) determination must be made upon receipt of a valid application. It therefore appears that a decision under proposed subsection 60L(4) should be subject to independent merits review.
1.133 The explanatory memorandum does not explain why proposed subsection 60N(1) is not subject to merits review. As with subsection 60L(4), this decision appears to be discretionary.
1.134 In light of the above, the committee requests the minister's advice as to whether the bill can be amended to provide that independent merits review will be available in relation to a decision made under proposed subsection 60L(4) and proposed subsection 60N(1) of the bill.
[85] Schedule 2, item 2, proposed subsection 355-65(8). The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[86] See Schedule 2, item 2, proposed subsection 355-65(8).
[87] Subsection 13.3(3) of the Criminal Code provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.
[88] Explanatory memorandum, p. 17.
[89] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 50–52.
[90] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 50.
[91] Schedule 5. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[92] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 4 of 2021,
24 February 2021, pp. 9–15; Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 6 of 2021, 21 April 2021, pp. 88–99.
[93] Schedule 5, item 1, proposed subsection 10(1).
[94] Superannuation Industry (Supervision) Act 1993, section 60B.
[95] Schedule 5, item 2, proposed paragraph 60L(2)(d).
[96] Schedule 5, item 2, proposed paragraph 60L(3)(a).
[97] Schedule 5, item 2, proposed section 60Q.
[98] Explanatory memorandum, p. 40.
[99] See, for example, Schedule 5, item 2, proposed subsections 60L(4) and 60N(1); Superannuation Industry (Supervision) Act 1993, section 60C(2).
[100] Schedule 5, item 2, proposed subsections 60L(4) and 60N(1). The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(iii).
[101] Explanatory memorandum, pp. 34-35.
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2022/73.html