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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
BUSINESS NAMES REGISTRATION (FEES) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Small Business, Minister Assisting on Deregulation and Public Sector
Superannuation, Minister Assisting the Minister for Tourism, Senator the Hon Nick
Sherry)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Imposition of fees for chargeable matters ............................................... 5
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ASIC Australian Securities and Investments
Commission
COAG Council of Australian Governments
Fees Bill Business Names Registration (Fees) Bill
2011
National Business Name Business Names Registration Bill 2011,
Registration Package Business Names Registration (Transitional
and Consequential Provisions) Bill 2011 and
the Business Names Registration (Fees) Bill
2011 and other legislative instruments
Register Business Names Register
Registration Bill Business Names Registration Bill 2011
Registration System National Business Name Registration System
Transitional Bill Business Names Registration (Transitional
and Consequential Provisions) Bill 2011
1
General outline and financial impact
Outline
The Business Names Registration (Fees) Bill 2011 (Fees Bill) forms part
of the National Business Names Registration Package which also includes
the Business Names Registration Bill 2011 and the Business Names
(Transitional and Consequential) Bill 2011; and other legislative
instruments including the Business Names (Availability of Name)
Determination 2011.
This legislative package establishes a national business names registration
system, a key regulatory reform initiative of the Council of Australian
Governments.
The main purpose of business name registration is to protect consumers,
by allowing them to identify the entity behind a business name.
Under the Registration Bill, various fees are to be imposed in relation to,
amongst other things, the registration and renewal of a business name and
for an extract of the Business Names Register (Register). These fees are
imposed, as taxes, by the Fees Bill.
Date of effect: The Fees Bill commences at the same time as section 3 of
the Business Names Registration Act 2011 commences.
Proposal announced: The proposal to transfer responsibility for business
name registration to the Commonwealth was announced by COAG on
3 July 2008.
Financial impact: The 2010-11 Budget allocated $125.2m over four
years to implement the Registration System. These funds were distributed
between the Department of Innovation, Industry, Science and Research
(DIISR), the Australian Securities and Investment Commission (ASIC)
and the Australian Taxation Office (ATO). This amount is being fully
offset in unspent funding.
The National Partnership Agreement to deliver a Seamless National
Economy committed the Commonwealth and the States and Territories to
delivering on agreed implementation milestones and deadlines, which are
tied to reward payments under the National Partnership Agreement.
Compliance cost impact: No net increase in compliance costs. The
replacement of the existing State and Territory business names regimes
with a single new Commonwealth business regime will result in a net
reduction in compliance costs for businesses and those transacting with
businesses.
3
Imposition of fees for chargeable matters
Outline of chapter
0.1 The Fees Bill provides for the imposition of fees for things done
under the Registration Bill. It is a separate piece of Commonwealth
legislation to ensure compliance with Commonwealth constitutional
requirements in relation to taxation bills.
Context of new law
0.2 Any fees under the Fees Bill will be imposed as a tax in order to
comply with section 55 of the Australian Constitution which provides in
part that "Laws imposing taxation shall deal only with the imposition of
taxation, and any provision therein dealing with any other matter shall be
of no effect".
0.3 A law will impose taxation where it authorises a compulsory
exaction of money by a public authority for public purposes, enforceable
by law.
0.4 The approach taken in the Fees Bill is generally consistent with
the Corporations (Fees) Act 2001 which deals with the imposition of fees
under the Corporations Act 2001 and the National Consumer Credit
Protection (Fees) Act 2009 which deals with the imposition of fees under
the National Consumer Credit Protection Act 2009.
0.5 The fees imposed under the Fees Bill are payable to the
Commonwealth (through ASIC) by the application of Part 9 of the
Registration Bill.
Summary of new law
0.6 The Fees Bill establishes a comprehensive set of provisions
concerning the imposition of fees and charges in the form of taxation
legislation that complies with Commonwealth constitutional requirements.
It deals with matters such as the:
· imposition of fees for chargeable matters;
· imposition of, and matters relating to the amount of, fees; and
· differential fees for electronic compliance in relation to a
chargeable matter.
5
Business Names Registration (Fees) Bill 2011
Comparison of key features of new law and current law
New law Current law
The Fees Bill will impose fees for As the Fees Bill is part of the
things done under the Registration National Business Name
Bill. Registration Package, there is no
current law dealing with the
imposition of fees. Each State
and Territory has their own
business names legislation which
imposes fees.
Detailed explanation of new law
What is a chargeable matter?
1.7 The key provision in the Fees Bill is the definition of the term
chargeable matter. [Subsection 3(1)] It is defined broadly as any of the
following:
· a registration of a business name to an entity;
· a renewal of the registration of a business name to an entity;
and
· an application by an entity for an extract of the Business
Names Register.
Other definitions
1.8 Other expressions used in this Bill that are defined in the
Registration Bill have the same meanings as they have in that Bill.
[Subsection 3(2)]
Imposition of, and matters relating to the amount of, fees
1.9 Fees for chargeable matters may be prescribed in the
regulations. [Subsection 4(1)] Any fees prescribed will be imposed as a tax
to ensure compliance with constitutional requirements. [Subsection 4(2)]
1.10 It is anticipated that the regulations will provide for the increase
of fees over time through indexation of fee amounts to the Consumer
Price Index (CPI). This approach to indexation is consistent with that
adopted in the Corporations (Fees) Act 2001 and regulation 3 of the
Corporations (Fees) Regulations 2001 as amended by the Corporations
(Fees) Amendment Regulations 2010 (No.2). This approach is also
consistent with the method of fee indexation adopted under the National
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Consumer Credit Protection (Fees) Act 2009 and regulations 6 and 7 of
the National Consumer Credit Protection (Fees) Regulations 2010 (No.2).
1.11 The inclusion of the CPI indexing mechanism in the Bill would
impede the timely amendment of the indexing provisions to address any
possible problems that may be identified in the future. CPI indexing
provisions are basic machinery provisions. The CPI indexing mechanisms
would determine fees by reference to a fixed and certain formula, the
application of which would not rely upon the exercise of any discretion by
the regulator and which would utilise objectively determinable inputs.
Inclusion of the CPI indexing mechanisms in the regulations is therefore
appropriate.
1.12 The regime for imposing fees in relation to business names
should be viewed in light of paragraphs 6.1 and 6.2 of the
Intergovernmental Agreement for Business Names, entered into between
the Commonwealth and the States and Territories. These non-legally
binding provisions provide that:
6.1. The Commonwealth will levy fees on private individuals and
non-government corporate entities for registering a business name.
These fees will be commensurate with the total costs involved in
setting up and administering the national business names registration
system.
6.2. Consistent with the objective of full cost recovery, the
Commonwealth will seek to ensure that any new fee for national
business name registrations will not be higher than the lowest business
name registration fee currently paid by any State or Territory, taking
account of the consumer price index increases. ASIC will consult with
the States and Territories prior to recommending the level of
registration fees or any change in the level of registration fees, to the
Government.
1.13 Two or more fees may be prescribed for the same chargeable
matter. [Subsection 4(3)]
1.14 Fees for chargeable matters may be prescribed in the regulations
by specifying an amount as the fee (not exceeding $10,000) or by
specifying a method of calculating the amount of the fee. The $10,000
maximum applies separately to each fee imposed if more than one fee is
prescribed for the same chargeable matter. [Subsection 5(1)]
1.15 A fee for a chargeable matter need not bear any relationship to
the cost of providing any service that forms part of, or is related to, that
matter. [Subsection 5(2)] A fee, or the sum of fees, for a chargeable matter
must not exceed $50,000. [Subsection 5(3)]
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Business Names Registration (Fees) Bill 2011
Different fees in relation to chargeable matter
1.16 Regulations may prescribe that fees can be charged at different
rates depending whether or not a chargeable matter is complied with by
electronic means. [Section 6]
Regulations
1.17 The Fees Bill provides that the Governor-General may make
regulations for the purposes of sections 4 to 6. [Section 7]
8