Excise and Customs Legislation Amendment (Streamlining Administration) Bill 2024 - Initial Scrutiny [2024] AUSStaCSBSD 112 (26 June 2024)

• Excise and Customs Legislation Amendment (Streamlining Administration) Bill 202495
• Availability of merits review96
• Significant penalties97

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Excise and Customs Legislation Amendment (Streamlining Administration) Bill 2024^[95]

Purpose	This bill seeks to amend the Excise Act 1901 to streamline licence application and renewal requirements for excise licences to store or manufacture excisable goods. Additionally, the bill seeks to amend the Customs Act 1901 to streamline licence application and renewal requirements for customs warehouse licences that authorise the warehousing of excise-equivalent goods. The bill also seeks to establish a public register of entities that hold such licences.
Portfolio	Treasury
Introduced	House of Representatives on 16 May 2024
Bill status	Before the Senate

Availability of merits review^[96]

1.121 The bill empowers a range of decisions to be made in relation to excise licenses for the storage and manufacture of excisable goods. For example, item 16 of Schedule 1 to the bill would substitute existing subsection 81B(1) of the Customs Act 1901 to authorise the Comptroller-General of Customs to vary an excise license.

1.122 The committee expects that explanatory materials to bills which authorise administrative decisions that may affect the interests of a person should clearly set out whether independent merits review is applicable within the existing legislative regimes. If merits review is considered inappropriate the committee’s expectation is that a sound justification should be provided by reference to the Administrative Review Council's guidance document, What decisions should be subject to merits review?

1.123 In this instance, the explanatory memorandum does not set out whether the decisions authorised under the bill are subject to any existing merits review frameworks. The committee’s view is that this information should have been provided in the explanatory memorandum to the bill, or, if merits review is not applicable, a sound justification should have been provided.

1.124 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole for consideration the adequacy of the explanatory memorandum to the bill in relation to merits review of decisions made under the bill.

Significant penalties^[97]

1.125 Item 121 of Schedule 1 to the bill inserts proposed subsection 39K(1A) into the Excise Act 1901 (the Excise Act). Proposed subsection 39K(1A) provides that during a period in which a license is suspended under subsection 39G(1A), the license holder must not, without permission and at premises in relation to which the license is suspended:

• for a manufacturer license—intentionally manufacture goods that are excisable goods knowing, or being reckless as to whether, they are excisable goods (proposed paragraph 39K(1A)(a)); or

• for a manufacturer license or a storage license—intentionally keep or store excisable goods knowing, or being reckless as to whether, they are excisable goods (proposed paragraph 39K(1A)(b)).

1.126 A penalty of up to 2 years imprisonment applies to contravention of this offence.

1.127 Item 139 would insert proposed subsection 39M(2) into the Excise Act. Proposed subsection 39M(2) provides that if a license is varied to no longer cover particular premises, a person must not, without permission, intentionally remove from the premises any excisable goods on which duty has not been paid, knowing, or being reckless as to whether the goods are excisable goods on which duty has not been paid.

1.128 A penalty of up to 2 years imprisonment applies in contravention of this offence.

1.129 The committee's expectation is that the rationale for the imposition of significant penalties will be fully outlined in the explanatory memorandum. In particular, penalties should be justified by reference to similar offences in Commonwealth legislation. This not only promotes consistency, but guards against the risk that liberty of the person is unduly limited through the application of disproportionate penalties. In this regard, the committee notes that the Guide to Framing Commonwealth Offences states that a penalty 'should be consistent with penalties for existing offences of a similar kind or of similar seriousness. This should include a consideration of...other comparable offences in Commonwealth legislation.'^[98]

1.130 In this instance, no justification has been provided in the explanatory memorandum for the imposition of custodial penalties in relation to either proposed subsection 39K(1A) or 39M(2).

1.131 The committee therefore seeks the Treasurer’s advice as to:

• the appropriateness of the penalties of two years imprisonment for proposed subsections 39K(1A) and 39M(2); and

• whether these penalties are broadly equivalent to similar offences in Commonwealth legislation and if not, why not.

1.132 The committee's consideration of the appropriateness of these provisions would be assisted if the Treasurer’s response explicitly addresses relevant principles as set out in the Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

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^[95] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Excise and Customs Legislation Amendment (Streamlining Administration) Bill 2024, Scrutiny Digest 7 of 2024; [2024] AUSStaCSBSD 112.

^[96] Various provisions of the bill. The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(iii).

^[97] Schedule 1, item 121, proposed subsection 39K(1A), and item 139, proposed subsection 39M(2). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(i).

^[98] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, May 2024, p. 39.