Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
MEDICARE LEVY AMENDMENT (NATIONAL DISABILITY INSURANCE
SCHEME FUNDING) BILL 2017
FRINGE BENEFITS TAX AMENDMENT (NATIONAL DISABILITY
INSURANCE SCHEME FUNDING) BILL 2017
INCOME TAX RATES AMENDMENT (NATIONAL DISABILITY INSURANCE
SCHEME FUNDING) BILL 2017
SUPERANNUATION (EXCESS NON-CONCESSIONAL CONTRIBUTIONS TAX)
AMENDMENT (NATIONAL DISABILITY INSURANCE SCHEME FUNDING)
BILL 2017
SUPERANNUATION (EXCESS UNTAXED ROLL-OVER AMOUNTS TAX)
AMENDMENT (NATIONAL DISABILITY INSURANCE SCHEME FUNDING)
BILL 2017
INCOME TAX (TFN WITHHOLDING TAX (ESS)) AMENDMENT (NATIONAL
DISABILITY INSURANCE SCHEME FUNDING) BILL 2017
FAMILY TRUST DISTRIBUTION TAX (PRIMARY LIABILITY) AMENDMENT
(NATIONAL DISABILITY INSURANCE SCHEME FUNDING) BILL 2017
TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 1)
AMENDMENT (NATIONAL DISABILITY INSURANCE SCHEME FUNDING)
BILL 2017
TAXATION (TRUSTEE BENEFICIARY NON-DISCLOSURE TAX) (NO. 2)
AMENDMENT (NATIONAL DISABILITY INSURANCE SCHEME FUNDING)
BILL 2017
TREASURY LAWS AMENDMENT (UNTAINTING TAX) (NATIONAL
DISABILITY INSURANCE SCHEME FUNDING) BILL 2017
NATION-BUILDING FUNDS REPEAL (NATIONAL DISABILITY INSURANCE
SCHEME FUNDING) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP and
Minister for Finance, Senator the Hon Mathias Cormann)
Table of contents
Glossary ................................................................................................. 1
General outline and financial impact....................................................... 3
Chapter 1 Change to the Medicare levy rate ................................. 7
Chapter 2 Closure of the Building Australia and the
Education Investment Funds .......................................25
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ITAA 1936 Income Tax Assessment Act 1936
ITAA 1997 Income Tax Assessment Act 1997
TFN tax file number
The Board Future Fund Board of Guardians
1
General outline and financial impact
Change to the Medicare levy rate
Schedule 1 to the Medicare Levy Amendment (National Disability
Insurance Scheme Funding) Bill 2017 amends the Medicare Levy
Act 1986 to increase the Medicare levy rate from 2 to 2.5 per cent of
taxable income for the 2019-20 income year and later income years.
Schedule 1 to each of the following Bills incorporates the change in the
Medicare levy rate into other Acts setting tax rates that take the rate of
Medicare levy into account:
• Fringe Benefits Tax Amendment (National Disability
Insurance Scheme Funding) Bill 2017;
• Income Tax Rates Amendment (National Disability
Insurance Scheme Funding) Bill 2017;
• Superannuation (Excess Non-concessional Contributions
Tax) Amendment (National Disability Insurance Scheme
Funding) Bill 2017;
• Superannuation (Excess Untaxed Roll-over Amounts Tax)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Income Tax (TFN Withholding Tax (ESS)) Amendment
(National Disability Insurance Scheme Funding) Bill 2017;
• Family Trust Distribution Tax (Primary Liability)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017; and
• Treasury Laws Amendment (Untainting Tax) (National
Disability Insurance Scheme Funding) Bill 2017.
3
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
Date of effect: This measure applies to the 2019-20 income year and later
income years. The amendments to the Fringe Benefits Tax Act 1986 apply
to the year of tax beginning on 1 April 2019 and later years of tax.
Proposal announced: This measure was announced by the Treasurer as
part of the 2017-18 Budget on 9 May 2017.
Financial impact: This measure is estimated to result in a gain to revenue
of $8,200 million over the forward estimates period comprising:
2016-17 2017-18 2018-19 2019-20 2020-21
- - $400m $3,550m $4,250m
- Nil
Human rights implications: These Bills do not raise any human rights
issues. See Statements of Compatibility with Human Rights,
paragraphs 1.48 to 1.87.
Compliance cost impact: Low.
Closure of the Building Australia and the Education
Investment Funds
The Nation-building Funds Repeal (National Disability Insurance Scheme
Funding) Bill 2017 implements the Government's 2016-17 Mid-Year
Economic and Fiscal Outlook decision to not proceed with the Asset
Recycling Fund. The Bill provides for the repeal of the Nation-building
Funds Act 2008. Uncommitted funds from the Building Australia Fund
and the Education Investment Fund will subsequently be credited to the
National Disability Insurance Scheme Savings Fund Special Account
when it is established.
The Nation-building Funds Repeal (National Disability Insurance Scheme
Funding) Bill 2017 also makes consequential amendments to:
• COAG Reform Fund Act 2008;
• Future Fund Act 2006;
• DisabilityCare Australia Fund Act 2013;
• Health Insurance Act 1973; and
• Medical Research Future Fund Act 2015.
4
General outline and financial impact
Date of effect: The closure of the Building Australia Fund and the
Education Investment Fund will take effect from the date of the repeal of
the Nation-building Funds Act 2008, which will be fixed by Proclamation.
Proposal announced: The Government announced the closure of the
Building Australia Fund and the Education Investment Fund, as part of the
2016-17 Mid-Year Economic and Fiscal Outlook measure, Asset
Recycling Fund - not proceeding, on 19 December 2016.
Financial impact: The closure of the Building Australia Fund and the
Education Investment Fund is part of the 2016-17 Mid-Year Economic
and Fiscal Outlook measure Asset Recycling Fund - not proceeding,
which had the following total impact on fiscal balance:
2016-17 2017-18 2018-19 2019-20 2020-21
- $23m $29m $29m -
- Nil
Between them, the uncommitted balances of the Building Australia Fund
and the Education Investment Fund, will contribute in excess of
$7.2 billion to the National Disability Insurance Scheme Savings Fund
Special Account when it is established.
Human rights implications: These Bills do not raise any human rights
issues. See Statements of Compatibility with Human Rights,
paragraphs 2.43 to 2.46.
Compliance cost impact: Low.
5
Chapter 1
Change to the Medicare levy rate
Outline of chapter
1.1 Schedule 1 to the Medicare Levy Amendment (National
Disability Insurance Scheme Funding) Bill 2017 amends the Medicare
Levy Act 1986 to increase the Medicare levy rate from 2 to 2.5 per cent of
taxable income for the 2019-20 income year and later income years.
1.2 Schedule 1 to each of the following Bills (in this Chapter
referred to as the supporting Bills) incorporates the change in the
Medicare levy rate into other Acts setting tax rates that take the rate of
Medicare levy into account:
• Fringe Benefits Tax Amendment (National Disability
Insurance Scheme Funding) Bill 2017;
• Income Tax Rates Amendment (National Disability
Insurance Scheme Funding) Bill 2017;
• Superannuation (Excess Non-concessional Contributions
Tax) Amendment (National Disability Insurance Scheme
Funding) Bill 2017;
• Superannuation (Excess Untaxed Roll-over Amounts Tax)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Income Tax (TFN Withholding Tax (ESS)) Amendment
(National Disability Insurance Scheme Funding) Bill 2017;
• Family Trust Distribution Tax (Primary Liability)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017;
• Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2)
Amendment (National Disability Insurance Scheme Funding)
Bill 2017; and
7
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
• Treasury Laws Amendment (Untainting Tax) (National
Disability Insurance Scheme Funding) Bill 2017.
Context of amendments
1.3 The National Disability Insurance Scheme Act 2013 established
the National Disability Insurance Scheme. The National Disability
Insurance Scheme ensures that Australians with permanent and significant
disability get the support they need, and will allow them to live with
dignity and exercise choice and control in accessing the services they
require.
1.4 The Government is increasing the Medicare levy rate by half a
percentage point from 2 per cent to 2.5 per cent to fund the
Commonwealth's contribution to the National Disability Insurance
Scheme. This provides certainty to people with permanent and significant
disability and their families and carers that the National Disability
Insurance Scheme will be funded in the long term.
1.5 One-fifth of the revenue raised by the Medicare levy from
1 July 2019 will be credited to the National Disability Insurance Scheme
Savings Fund Special Account, building on the Commonwealth's share of
the DisabilityCare Australia Fund, repurposed disability-related
expenditure and other credits to the National Disability Insurance Scheme
Savings Fund Special Account to ensure that the Commonwealth's
National Disability Insurance Scheme contribution is fully funded.
1.6 The Medicare levy currently applies at a rate of 2 per cent to a
person's taxable income. Low income earners receive relief from the
Medicare levy through the low income thresholds for singles, families,
seniors and pensioners. A number of people are also exempt from the
Medicare levy, including blind pensioners, low-income earners,
non-residents for tax purposes and Medicare exemption certificate
recipients.
1.7 Increasing the Medicare levy rate also requires a number of
consequential amendments to other tax rates that are linked to the top
marginal rate and the Medicare levy. Consequential amendments include
changes to fringe benefits tax, excess contributions tax and the tax
withheld on bank accounts when the account holder has not provided their
tax file number (TFN).
8
Change to the Medicare levy rate
Summary of new law
1.8 Schedule 1 to the Medicare Levy Amendment (National
Disability Insurance Scheme Funding) Bill 2017 amends the Medicare
Levy Act 1986 to increase the Medicare levy rate from 2 per cent to
2.5 per cent for the 2019-20 income year and later income years.
1.9 The supporting Bills amend taxing Acts that have tax rates that
have been set taking the rate of the Medicare levy into account. They
include amendments to the rate of fringe benefits tax, excess
non-concessional contributions tax and tax withheld on bank accounts
when the account holder has not provided their TFN.
Comparison of key features of new law and current law
New law Current law
Medicare levy
The Medicare levy rate is 2.5 per cent The Medicare levy rate is 2 per cent.
for the 2019-20 income year and later
income years.
Fringe benefits tax
The fringe benefits tax rate is The fringe benefits tax rate is
47.5 per cent for the 2019-20 year of 47 per cent.
tax and later years of tax.
Rate of income tax on No-TFN contributions income
The Medicare levy component of the The Medicare levy component of the
rate of income tax on No-TFN rate of income tax on No-TFN
contributions income is 2.5 per cent contributions income is 2 per cent.
for the 2019-20 income year and later
income years.
Superannuation excess non-concessional contributions tax
The superannuation excess The superannuation excess
non-concessional contributions tax non-concessional contributions tax
rate is 47.5 per cent for the 2019-20 rate is 47 per cent.
financial year and later financial
years.
Superannuation excess untaxed roll-over amounts tax
The Medicare levy component of the The Medicare levy component of the
superannuation excess untaxed superannuation excess untaxed
roll-over amounts tax rate is roll-over amounts tax rate is
2.5 per cent for the 2019-20 income 2 per cent.
year and later income years.
9
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
New law Current law
Income tax on ESS interest amounts
The Medicare levy component of the The Medicare levy component of the
income tax (TFN withholding tax income tax (TFN withholding tax
(ESS)) rate is 2.5 per cent for the (ESS)) rate is 2 per cent.
2019-20 income year and later
income years.
Family trust distribution tax
The family trust distribution tax rate The family trust distribution tax rate
is 47.5 per cent for the 2019-20 is 47 per cent.
income year and later income years.
Trustee beneficiary non-disclosure tax (no. 1)
The trustee beneficiary The trustee beneficiary
non-disclosure tax (no. 1) rate is non-disclosure tax (no. 1) rate is
47.5 per cent for the 2019-20 income 47 per cent.
year and later income years.
Trustee beneficiary non-disclosure tax (no. 2)
The trustee beneficiary The trustee beneficiary
non-disclosure tax (no. 2) rate is non-disclosure tax (no. 2) rate is
47.5 per cent for the 2019-20 income 47 per cent.
year and later income years.
New business tax system untainting tax
The untainting tax rate is The untainting tax rate is 48 per cent.
48.5 per cent for the 2019-20 income
year and later income years.
Detailed explanation of new law
Medicare Levy
1.10 The Medicare levy is imposed by section 5 of the Medicare Levy
Act 1986.
1.11 Section 6 of the Medicare Levy Act 1986 specifies the rate of the
Medicare levy. The rate of the Medicare levy payable is increased by
these amendments from 2 per cent to 2.5 per cent for the following:
• a person;
• a person who is liable to be assessed on a share of the net
income of a trust estate as a trustee under section 98 of the
Income Tax Assessment Act 1936 (ITAA 1936);
10
Change to the Medicare levy rate
• a person who is liable to be assessed on the share of the net
income of a trust estate as a trustee under section 99 or 99A
of the ITAA 1936; and
• a person in the capacity of a trustee of an attributable
managed investment trust (also known as AMIT) in respect
of amounts mentioned in subsections 276-405(2), 276-415(2)
and 276-420(2) of the Income Tax Assessment Act 1997
(ITAA 1997).
[Schedule 1, item 1 of the Medicare Levy Amendment (National Disability Insurance
Scheme Funding) Bill 2017, subsections 6(1) to 6(6) of the Medicare Levy Act 1986]
1.12 Section 7 of the Medicare Levy Act 1986 provides that the
Medicare levy phases-in at a rate of 10 cents in the dollar for particular
taxpayers with taxable income between certain amounts.
1.13 The amendments also provide that the upper phase-in amount
for the net income or part of the net income of a trust estate, where a
person in the capacity of trustee of a trust is liable to assessment under
section 99 of the ITAA 1936, increases from $520 to $555 to reflect the
new Medicare levy rate. [Schedule 1, item 2 of the Medicare Levy Amendment
(National Disability Insurance Scheme Funding) Bill 2017, subsection 7(4) of the
Medicare Levy Act 1986]
1.14 Section 8 of the Medicare Levy Act 1986 adjusts the Medicare
levy liability for certain persons that have a spouse or dependants.
Subsection 8(2) of that Act provides for the Medicare levy of those
persons to be reduced if the family income of those persons exceeds the
family income threshold but is within the phase-in range for the levy. The
Medicare levy rate components of the formula specified for this purpose
are amended to reflect the increased rate. [Schedule 1, item 3 of the Medicare
Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017,
subsection 8(2) of the Medicare Levy Act 1986]
Consequential amendments
1.15 The supporting Bills make consequential amendments to ratings
Acts to update tax rates where those tax rates incorporate the rate of the
Medicare levy.
Fringe benefits tax
1.16 Section 5 of the Fringe Benefits Tax Act 1986 imposes tax on
the fringe benefits taxable amount of an employer for each year of tax
(within the meaning of the Fringe Benefits Tax Assessment Act 1986), and
11
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
section 6 sets the rate of that tax. Fringe benefits tax applies to an
employer that provides an employee with a fringe benefit other than salary
and wages, in respect of their employment.
1.17 The fringe benefits tax rate is increased in respect of the fringe
benefits taxable amount of an employer for a year of tax from 47 per cent
to 47.5 per cent. This amendment ensures that the fringe benefits tax rate
continues to be equal to the sum of the maximum income tax rate under
Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent) and the increased rate of the Medicare levy (2.5 per cent).
[Schedule 1, item 1 of the Fringe Benefits Tax Amendment (National Disability
Insurance Scheme Funding) Bill 2017, section 6 of the Fringe Benefits Tax Act 1986]
Rate of income tax on No-TFN contributions income
1.18 Section 29 of the Income Tax Rates Act 1986 specifies the rate
of income tax payable by trustees of complying and non-complying
superannuation funds, and retirement savings account providers in respect
of no-TFN contributions income. No-TFN contributions income
comprises contributions for an individual that are included in the
superannuation provider's assessable income if no TFN has been quoted
in respect of that individual by the end of the income year in which the
contribution is made.
1.19 The rate of tax is calculated in accordance with
subsection 29(2) of the Income Tax Rates Act 1986. This includes a
component that is set at the current rate of the Medicare levy. The rate of
this component of the tax calculation is increased so that it incorporates
the increase in the Medicare levy rate from 2 per cent to 2.5 per cent.
[Schedule 1, item 1 of the Income Tax Rates Amendment (National Disability Insurance
Scheme Funding) Bill 2017, paragraph 29(2)(b) of the Income Tax Rates Act 1986]
Superannuation excess non-concessional contributions tax
1.20 Section 4 of the Superannuation (Excess Non-concessional
Contributions Tax) Act 2007 imposes excess non-concessional
contributions tax, which is payable under section 292-80 of the
ITAA 1997. Excess non-concessional contributions tax is payable where
an individual has excess non-concessional contributions for a financial
year.
1.21 An individual has excess non-concessional contributions where
their non-concessional contributions exceed their non-concessional
contributions cap, and they elect not to release the amount of the excess
and associated earnings.
12
Change to the Medicare levy rate
1.22 Subdivision 292-C of the ITAA 1997 provides for the amount of
the non-concessional contributions cap and sets out when a contribution is
a non-concessional contribution.
1.23 The superannuation excess non-concessional contributions tax
rate that applies to an individual's excess non-concessional contributions
for a financial year is increased from 47 per cent to 47.5 per cent. This
amendment ensures that the superannuation excess non-concessional
contributions tax rate continues to be equal to the sum of the maximum
income tax rate under Part I of Schedule 7 to the Income Tax Rates
Act 1986 (currently 45 per cent) and the increased rate of the Medicare
levy (2.5 per cent). [Schedule 1, item 1 of the Superannuation (Excess
Non-concessional Contributions Tax) Amendment (National Disability Insurance
Funding) Bill 2017, section 5 of the Superannuation (Excess Non-concessional
Contributions Tax) Act 2007]
Superannuation excess untaxed roll-over amounts tax
1.24 Section 4 of the Superannuation (Excess Untaxed Roll-over
Amounts Tax) Act 2007 imposes tax on an excess untaxed roll-over
amount, which is payable under section 306-15 of the ITAA 1997. An
individual may have a benefit that is a roll-over superannuation benefit if
the benefit includes an amount that is an element untaxed in the fund (an
untaxed roll-over amount). If the untaxed roll-over amount exceeds the
individual's untaxed plan cap amount for the superannuation plan from
which the benefit is payable, the individual is liable to tax on the amount
of the excess. This tax is the excess untaxed roll-over amounts tax.
1.25 The rate of the excess untaxed roll-over amounts tax is increased
from 47 per cent to 47.5 per cent. This amendment ensures that the rate
continues to be equal to the sum of the maximum income tax rate under
Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently 45 per
cent) and the increased rate of the Medicare levy (2.5 per cent). [Schedule 1,
item 1 of the Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(National Disability Insurance Scheme Funding) Bill 2017, paragraph 5(2)(b) of the
Superannuation (Excess Untaxed Roll-over Amounts Tax) Act 2007]
Income tax on ESS interest amounts
1.26 Section 3 of the Income Tax (TFN Withholding Tax (ESS))
Act 2009 imposes additional income tax on amounts that are included in
an individual's assessable income under Division 83A of the ITAA 1997
(ESS interest amounts) if Subdivision 14-C in Schedule 1 to the Taxation
Administration Act 1953 applies. Subdivision 14-C applies broadly if an
employer provides one or more ESS interests under an employee share
scheme, and the employee has not quoted their Australian Business
Number or their TFN to their employer by the end of the income year.
13
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
1.27 The rate of income tax that is imposed on ESS interest
amounts is increased from 47 per cent to 47.5 per cent. This amendment
ensures that the rate of income tax that is imposed on ESS interest
amounts continues to be equal to the sum of the maximum income tax rate
under Part I of Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent) and the increased rate of the Medicare levy (2.5 per cent).
[Schedule 1, item 1 of the Income Tax (TFN Withholding Tax (ESS)) Amendment
(National Disability Insurance Scheme Funding) Bill 2017, paragraph 4(b) of the
Income Tax (TFN Withholding Tax (ESS)) Act 2009]
Family trust distribution tax
1.28 Section 3 of the Family Trust Distribution Tax (Primary
Liability) Act 1998 imposes tax payable under sections 271-15, 271-20,
271-25, 271-30 or 271-55 in Schedule 2F to the ITAA 1936 (trust losses
and other deductions), on the amount or value of income or capital.
Family trust distribution tax is payable at a rate equal to the top marginal
rate if a distribution is made to a party that is not a member of the family
group of the individual specified in a family trust election.
1.29 The family trust distribution tax rate is increased from
47 per cent to 47.5 per cent. This amendment ensures that the family trust
distribution tax rate continues to be equal to the sum of the maximum
income tax rate under Part I of Schedule 7 to the Income Tax Rates
Act 1986 (currently 45 per cent) and the increased rate of the Medicare
levy (2.5 per cent). [Schedule 1, item 1 of the Family Trust Distribution Tax
(Primary Liability) Amendment (National Disability Insurance Scheme Funding)
Bill 2017, section 4 of the Family Trust Distribution Tax (Primary Liability) Act 1998]
Trustee beneficiary non-disclosure tax (no. 1)
1.30 The Taxation (Trustee Beneficiary Non-disclosure Tax)
Act (No. 1) 2007 imposes the additional tax payable under
paragraph 102UK(2)(a) of the ITAA 1936. Section 102UK of the ITAA
1936 applies if:
• a share of the net income of a closely held trust for a year of
income is included in the assessable income of a trustee
beneficiary of the trust under section 97 of the ITAA 1936;
and
• during the trustee beneficiary statement period, the trustee of
the closely held trust is required to give the Commissioner of
Taxation a trustee beneficiary statement about the share, but
it fails to do so.
14
Change to the Medicare levy rate
1.31 The trustee beneficiary non-disclosure tax (no. 1) rate is
increased from 47 per cent to 47.5 per cent. This amendment ensures that
the trustee beneficiary non-disclosure tax (no. 1) rate continues to be equal
to the sum of the maximum income tax rate under Part I of Schedule 7 to
the Income Tax Rates Act 1986 (currently 45 per cent) and the increased
rate of the Medicare levy (2.5 per cent). [Schedule 1, item 1 of the Taxation
(Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment (National Disability
Insurance Scheme Funding) Bill 2017, section 4 of the Taxation (Trustee Beneficiary
Non-disclosure Tax) Act (No. 1) 2007]
Trustee beneficiary non-disclosure tax (no. 2)
1.32 The Taxation (Trustee Beneficiary Non-disclosure Tax)
Act (No. 2) 2007 imposes the additional tax payable under
paragraph 102UM(2)(a) of the ITAA 1936. It applies where a share of the
net income of a closely held trust is included in the assessable income of a
trustee beneficiary and the share (or part of it) is income (or a part of
income) which the trustee of the closely held trust becomes presently
entitled to.
1.33 The trustee beneficiary non-disclosure tax (no. 2) rate is
increased from 47 per cent to 47.5 per cent. This amendment ensures that
the trustee beneficiary non-disclosure tax (no. 2) rate continues to be equal
to the sum of the maximum income tax rate under Part I of Schedule 7 to
the Income Tax Rates Act 1986 (currently 45 per cent) and the increased
rate of the Medicare levy (2.5 per cent). [Schedule 1, item 1 of the Taxation
(Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment (National Disability
Insurance Scheme Funding) Bill 2017, section 4 of the Taxation (Trustee Beneficiary
Non-disclosure Tax) Act (No. 2) 2007]
Untainting tax
1.34 Section 3 of the New Business Tax System (Untainting Tax)
Act 2006 imposes untainting tax that is payable under section 197-60 of
the ITAA 1997.
1.35 Untainting tax is payable if a company's share capital account
has become tainted and it chooses to untaint it. A company's share capital
account will become tainted if it transfers certain amounts to that account.
If a company taints its share capital account, a franking debit arises in the
company's franking account and any dividends it distributes while the
account is tainted are unfrankable. If the company chooses to untaint its
share capital account, an additional franking debit may arise and
untainting tax is payable.
1.36 Section 197-60 of the ITAA 1997 sets out the formula to
calculate the amount of untainting tax for which a company is liable if it
15
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
makes the choice to untaint its share capital account. The applicable tax
rate for untainting tax is:
• for a company with only lower tax members in relation to the
tainting period is the company's corporate tax rate for
imputation purposes for the income year in which the choice
is made; or
• for a company with higher tax members in relation to the
untainting period - the sum of:
- the maximum income tax rate payable under Part I of
Schedule 7 to the Income Tax Rates Act 1986 (currently
45 per cent); and
- 3 per cent, being the sum of the 2 per cent Medicare
levy rate and the 1 per cent Medicare levy surcharge rate.
1.37 The rate of the Medicare levy and Medicare levy surcharge
component of the untainting tax rate is increased from 3 per cent to
3.5 per cent so that it incorporates the increase in the Medicare levy rate
from 2 per cent to 2.5 per cent. The note that explains how this component
of the untainting tax rate is set is also updated. [Schedule 1, items 1 and 2 of the
Treasury Laws Amendment (Untainting Tax) (National Disability Insurance Scheme
Funding) Bill 2017, subparagraph (b)(ii) of the definition of applicable tax rate in
subsection 197-60(3) and the note following subsection 197-60(3) of the ITAA 1997]
Commencement
1.38 The amendments made by the Medicare Levy Amendment
(National Disability Insurance Scheme Funding) Bill 2017 commence on
the first 1 January, 1 April, 1 July or 1 October to occur after the day the
Act receives Royal Assent. [Clause 2 of the Medicare Levy Amendment (National
Disability Insurance Scheme Funding) Bill 2017]
1.39 The amendments made by the supporting Bills commence at the
same time as the Medicare Levy Amendment (National Disability
Insurance Scheme Funding) Bill 2017 commences. [Clause 2 of the Fringe
Benefits Tax Amendment (National Disability Insurance Scheme Funding) Bill 2017;
clause 2 of the Income Tax Rates Amendment (National Disability Insurance Scheme
Funding) Bill 2017; clause 2 of the Superannuation (Excess Non-concessional
Contributions Tax) Amendment (National Disability Insurance Funding) Bill 2017;
clause 2 of the Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(National Disability Insurance Scheme Funding) Bill 2017; clause 2 of the Income Tax
(TFN Withholding Tax (ESS)) Amendment (National Disability Insurance Scheme
Funding) Bill 2017; clause 2 of the Family Trust Distribution Tax (Primary Liability)
Amendment (National Disability Insurance Scheme Funding) Bill 2017; clause 2 of the
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment (National
16
Change to the Medicare levy rate
Disability Insurance Scheme Funding) Bill 2017; clause 2 of the Taxation (Trustee
Beneficiary Non-disclosure Tax) (No. 2) Amendment (National Disability Insurance
Scheme Funding) Bill 2017 and clause 2 of the Treasury Laws Amendment (Untainting
Tax) (National Disability Insurance Scheme Funding) Bill 2017]
Application provisions
1.40 The amendments to the Medicare levy apply to assessments for
the 2019-20 income year and later income years. [Schedule 1, item 4 to the
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017]
1.41 The amendment to the rate of fringe benefits tax applies to the
year of tax beginning on 1 April 2019 (that is 2019-20 year of tax), and
later years of tax. [Schedule 1, item 2 of the Fringe Benefits Tax Amendment
(National Disability Insurance Scheme Funding) Bill 2017]
1.42 The amendment to the rate of income tax on No-TFN
contributions income applies to assessments for the 2019-20 income year
and later income years. [Schedule 1, item 2 of the Income Tax Rates Amendment
(National Disability Insurance Scheme Funding) Bill 2017]
1.43 The amendment to the rate of superannuation excess
non-concessional contributions tax applies to assessments for the
2019-20 financial year and later financial years. [Schedule 1, item 2 of the
Superannuation (Excess Non-concessional Contributions Tax) Amendment (National
Disability Insurance Scheme Funding) Bill 2017]
1.44 The amendment for the superannuation excess untaxed roll-over
amounts tax applies to excess untaxed roll-over amounts paid on or after
1 July 2019. [Schedule 1, item 2 of the Superannuation (Excess Untaxed Roll-over
Amounts Tax) Amendment (National Disability Insurance Scheme Funding) Bill 2017,]
1.45 The amendment to the rate of income tax on ESS interest
amounts applies to ESS interests (within the meaning of the ITAA 1997)
provided on or after 1 July 2019. [Schedule 1, item 2 of the Income Tax (TFN
Withholding Tax (ESS)) Amendment (National Disability Insurance Scheme Funding)
Bill 2017
1.46 The amendment to family trust distribution tax payable under
section 271-55 in Schedule 2F to the ITAA 1936 applies for notices
mentioned in that section that are given by the Commissioner of Taxation
on or after 1 July 2019. Otherwise, the amendment applies to present
entitlements conferred, or distributions made, on or after 1 July 2019.
[Schedule 1, item 2 of the Family Trust Distribution Tax (Primary Liability) Amendment
(National Disability Insurance Scheme Funding) Bill 2017]
1.47 The amendments to the trustee beneficiary non-disclosure tax
(no. 1), trustee beneficiary non-disclosure tax (no. 2) and untainting tax
17
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
rates apply to the 2019-20 income year and later income years. [Schedule 1,
item 2 of the Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment
(National Disability Insurance Scheme Funding) Bill 2017, Schedule 1, item 2 of the
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment (National
Disability Insurance Scheme Funding) Bill 2017, Schedule 1, item 3 of the Treasury
Laws Amendment (Untainting Tax) (National Disability Insurance Scheme Funding)
Bill 2017]
Statements of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017
1.48 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
1.49 This Bill amends the Medicare Levy Act 1986 to increase the
Medicare levy rate from 2 to 2.5 per cent of taxable income.
Human rights implications
1.50 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.51 This Bill is compatible with human rights as it does not raise any
human rights issues.
Fringe Benefits Tax Amendment (National Disability Insurance Scheme
Funding) Bill 2017
1.52 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.
18
Change to the Medicare levy rate
Overview
1.53 This Bill amends the fringe benefits tax rate from 47 per cent to
47.5 per cent. This ensures that the fringe benefits tax rate continues to be
equal to the sum of the maximum income tax rate and the increased rate of
the Medicare levy.
Human rights implications
1.54 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.55 This Bill is compatible with human rights as it does not raise any
human rights issues.
Income Tax Rates Amendment (National Disability Insurance Scheme
Funding) Bill 2017
1.56 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
1.57 This Bill amends the component of the income tax rate on
No-TFN contributions income that aligns with the Medicare levy
increasing the rate of tax from 47 per cent to 47.5 per cent. This ensures
that the component of the tax rate that is aligned to the rate of the
Medicare levy is increased consistent with the increase in the Medicare
levy.
Human rights implications
1.58 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.59 This Bill is compatible with human rights as it does not raise any
human rights issues.
19
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
Superannuation (Excess Non-concessional Contributions Tax)
Amendment (National Disability Insurance Scheme Funding) Bill 2017
1.60 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
1.61 This Bill amends the superannuation excess non-concessional
contributions tax rate from 47 per cent to 47.5 per cent. This ensures that
the superannuation excess non-concessional contributions tax rate
continues to be equal to the sum of the maximum income tax rate and the
increased rate of the Medicare levy.
Human rights implications
1.62 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.63 This Bill is compatible with human rights as it does not raise any
human rights issues.
Superannuation (Excess Untaxed Roll-over Amounts Tax) Amendment
(National Disability Insurance Scheme Funding) Bill 2017
1.64 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
1.65 This Bill amends the component of the superannuation excess
untaxed roll-over amounts tax rate that aligns with the Medicare levy
thereby increasing the rate of tax from 47 per cent to 47.5 per cent. This
ensures that the component of the calculation that is aligned to the rate of
the Medicare levy is increased consistent with the increase in the
Medicare levy.
20
Change to the Medicare levy rate
Human rights implications
1.66 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.67 This Bill is compatible with human rights as it does not raise any
human rights issues.
Income Tax (TFN Withholding Tax (ESS)) Amendment (National Disability
Insurance Scheme Funding) Bill 2017
1.68 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
1.69 This Bill amends the component of the income tax rate on ESS
interest amounts that aligns with the Medicare levy thereby increasing the
rate of tax from 47 per cent to 47.5 per cent. This ensures that the
component of the calculation that is aligned to the rate of the Medicare
levy is increased consistent with the increase in the Medicare levy.
Human rights implications
1.70 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.71 This Bill is compatible with human rights as it does not raise any
human rights issues.
Family Trust Distribution Tax (Primary Liability) Amendment (National
Disability Insurance Scheme Funding) Bill 2017
1.72 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.
21
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
Overview
1.73 This Bill amends the family trust distribution tax rate from
47 per cent to 47.5 per cent. This ensures that the family trust distribution
tax rate continues to be equal to the sum of the maximum income tax rate
and the increased rate of the Medicare levy.
Human rights implications
1.74 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.75 This Bill is compatible with human rights as it does not raise any
human rights issues.
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 1) Amendment
(National Disability Insurance Scheme Funding) Bill 2017
1.76 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
1.77 This Bill amends the trustee beneficiary non-disclosure tax
(no. 1) tax rate from 47 per cent to 47.5 per cent. This ensures that the
family trust distribution tax rate continues to be equal to the sum of the
maximum income tax rate and the increased rate of the Medicare levy.
Human rights implications
1.78 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.79 This Bill is compatible with human rights as it does not raise any
human rights issues.
22
Change to the Medicare levy rate
Taxation (Trustee Beneficiary Non-disclosure Tax) (No. 2) Amendment
(National Disability Insurance Scheme Funding) Bill 2017
1.80 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
1.81 This Bill amends the trustee beneficiary non-disclosure tax
(no. 2) tax rate from 47 per cent to 47.5 per cent. This ensures that the
family trust distribution tax rate continues to be equal to the sum of the
maximum income tax rate and the increased rate of the Medicare levy.
Human rights implications
1.82 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
1.83 This Bill is compatible with human rights as it does not raise any
human rights issues.
Treasury Laws Amendment (Untainting Tax) (National Disability
Insurance Scheme Funding) Bill 2017
1.84 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
1.85 This Bill amends the untainting tax rate from 48 per cent to
48.5 per cent. This ensures that the untainting tax rate continues to be
equal to the sum of the maximum income tax rate, the increased rate of
the Medicare levy and the 1 per cent rate of Medicare levy surcharge.
Human rights implications
1.86 This Bill does not engage any of the applicable rights or
freedoms.
23
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
Conclusion
1.87 This Bill is compatible with human rights as it does not raise any
human rights issues.
24
Chapter 2
Closure of the Building Australia and the
Education Investment Funds
Outline of chapter
2.1 Schedule 1 to the Nation-building Funds Repeal (National
Disability Insurance Scheme Funding) Bill 2017 repeals the
Nation-building Funds Act 2008 to implement the Government's decision
to close the Building Australia Fund and the Education Investment Fund.
The Bill also makes consequential amendments to five other Acts and
provides transitional arrangements, primarily to assist reporting.
Context of amendments
2.2 The Government is closing the Building Australia Fund and the
Education Investment Fund, through the repeal of the Nation-building
Funds Act 2008, and will credit the uncommitted balances of the Building
Australia Fund and the Education Investment Fund to the National
Disability Insurance Scheme Savings Fund Special Account when it is
established. This will assist in ensuring that the Commonwealth's
National Disability Insurance Scheme contribution is fully funded.
2.3 Repealing the Nation-building Funds Act 2008 requires some
consequential amendments to five other Acts and some transitional
provisions to preserve reporting and other requirements relating to the
repealed Building Australia Fund and Education Investment Fund.
Summary of new law
2.4 Part 1 of Schedule 1 to the Nation-building Funds Repeal
(National Disability Insurance Scheme Funding) Bill 2017 repeals the
Nation-building Funds Act 2008 in its entirety.
2.5 Part 2 of Schedule 1 to the Nation-building Funds Repeal
(National Disability Insurance Scheme Funding) Bill 2017 makes
consequential amendments to:
• COAG Reform Fund Act 2008;
25
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
• DisabilityCare Australia Fund Act 2013;
• Future Fund Act 2006;
• Health Insurance Act 1973; and
• Medical Research Future Fund Act 2015.
2.6 Part 3 of Schedule 1 to the Nation-building Funds Repeal
(National Disability Insurance Scheme Funding) Bill 2017 provides
transitional provisions relating to: reporting and Annual Report
obligations of the Future Fund Board of Guardians (the Board);
compliance with statutory duties; and agreements made under the
Nation-building Funds Act 2008. The transitional provisions also allow
the Finance Minister to make rules relating to matters of a transitional
nature.
Detailed explanation of new law
2.7 Part 1 of Schedule 1 to the Nation-building Funds Repeal
(National Disability Insurance Scheme Funding) Bill 2017 provides that
the Nation-building Funds Act 2008 is repealed. On repeal of the
Nation-building Funds Act 2008, all instruments made under the Act,
including the investment mandates, are also be repealed.
Consequential amendments
2.8 Part 2 of Schedule 1 to the Nation-building Funds Repeal
(National Disability Insurance Scheme Funding) Bill 2017 makes
consequential amendments to five other Acts as a result of the repeal of
the Nation-building Funds Act 2008.
COAG Reform Fund Act 2008
2.9 Items 2 to 4 repeal redundant references to the Nation-building
Funds Act 2008 contained in the COAG Reform Fund Act 2008.
DisabilityCare Australia Fund Act 2013
2.10 Item 5 substitutes the definition of financial asset contained in
the DisabilityCare Australia Fund Act 2013 to refer to the definition of
financial asset contained in the Future Fund Act 2006.
26
Closure of the Building Australia and the Education Investment Funds
2.11 Item 6 amends the DisabilityCare Australia Fund Act 2013 to
remove references to the Nation-building Funds Act 2008 in the purposes
of the DisabilityCare Australia Fund Special Account.
Future Fund Act 2006
2.12 Item 7 removes a reference to the Nation-building Funds
Act 2008 in a note to the simplified outline of the Future Fund Act 2006.
2.13 Items 8 and 10 repeal definitions of the Building Australia Fund
and the Education Investment Fund, special accounts and Ministers that
will be redundant as a result of the repeal of the Nation-building Funds
Act 2008.
2.14 Item 9 substitutes a definition of Health Minister to replace the
current definition, which refers to the definition contained in the
Nation-building Funds Act 2008.
2.15 Item 11 removes the reference to the Building Australia Fund
and the Education Investment Fund from a note in Schedule 2A of the
Future Fund Act 2006, which deals with transfers of amounts from the
Future Fund to other Government Investment Funds that are managed by
the Future Fund Board of Guardians.
2.16 Item 12 removes references to the Nation-building Funds
Act 2008 from the section of the Future Fund Act 2006, which allows
investment managers to be engaged as investment managers of one or
more of the Government Investment Funds that are managed by the
Future Fund Board of Guardians.
2.17 Item 13 removes a reference to the Nation-building Funds
Act 2008 from the simplified outline of the Future Fund Act 2006 that
deals with the Future Fund Board of Guardians.
2.18 Item 14 removes the reference to the Nation-building Funds
Act 2008 from the list of Acts that confer functions on the Future Fund
Board of Guardians.
2.19 Item 15 removes the reference to the Nation-building Funds
Act 2008 from the list of Acts that do not apply to the Future Fund Board
of Guardians in respect of keeping the responsible Ministers informed and
providing reports, document and information to the nominated Minister
(i.e. the Finance Minister). The Nation-building Funds Act 2008 was
excluded from the application of these provisions in the Future Fund
Act 2006 as these responsibilities were instead covered by sections 113 to
115 and 203 to 205 of the Nation-building Funds Act 2008. Transitional
provisions in the Nation-building Funds Repeal (National Disability
27
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
Insurance Scheme Funding) Bill 2017 provide for residual reporting
requirements relating to the Building Australia Fund and the Education
Investment Fund.
2.20 Item 16 removes references to the Nation-building Funds
Act 2008 from the list of Acts that are not contravened, in relation to the
Board's or the Chair's compliance with statutory duties, if an Act in the
list required the Board or the Chair to do an act.
2.21 Item 17 removes the subsections, which detail the reporting
requirements for the Building Australia Fund and the Education
Investment Fund that are required to be included in an Annual Report.
Reporting requirements are preserved through transitional provisions in
the Nation-building Funds Repeal (National Disability Insurance Scheme
Funding) Bill 2017.
2.22 Items 18 and 20 remove the references to Ministers that will be
redundant as a result of the repeal of the Nation-building Funds Act 2008.
2.23 Item 19 makes a minor formatting amendment consequential to
item 20.
2.24 Item 21 removes the reference to two subsections in the
Nation-building Funds Act 2008 under which the Future Fund Board of
Guardians may delegate its powers.
2.25 Item 22 removes the reference to the Nation-building Funds
Act 2008, and the references to the Building Australia Fund Special
Account and the Education Investment Fund Special Account, from the
provision that allows miscellaneous receipts to be credited to the Future
Fund Special Account.
2.26 Item 23 removes the subsections, which deal with the handling
of miscellaneous receipts received in the Future Fund Special Account
that are to be credited to the Building Australia Fund or the Education
Investment Fund.
2.27 Items 24 and 25 remove subsequent references to the two
subsections removed in item 23.
2.28 Item 26 removes references to subparagraphs in the
Nation-building Funds Act 2008 that relate to use of the Future Fund
Special Account where that use does not exclusively relate to the Building
Australia Fund or the Education Investment Fund.
28
Closure of the Building Australia and the Education Investment Funds
2.29 Item 27 removes the reference to the Building Australia Fund
and the Education Investment Fund from the simplified outline for
Schedule 2A (Inter-fund transfers).
2.30 Item 28 repeals the clauses, which deal with inter-fund transfers
from the Future Fund to the Building Australia Fund and the Education
Investment Fund.
Health Insurance Act 1973
2.31 Item 29 makes a minor amendment to a note in section 46AA(1)
of the Health Insurance Act 1973, which deals with payments relating to
the former Health and Hospitals Fund, to reflect that the Nation-building
Funds Act 2008 is repealed.
Medical Research Future Fund Act 2015
2.32 Items 30 to 32 make a minor amendment to two simplified
outlines and two definitions to reflect that the Nation-building Fund
Act 2008 is repealed.
2.33 Item 33 removes redundant references to subparagraphs in the
Nation-building Funds Act 2008 in relation to the purposes of the Medical
Research Future Fund Special Account.
Application and transitional provisions
Commencement
2.34 Sections 1 to 3 of the Nation-building Funds Repeal (National
Disability Insurance Scheme Funding) Bill 2017 commence on the day
that the Act receives the Royal Assent. Schedule 1 to the Bill commences
on Proclamation or six months after the day the Act receives the Royal
Assent (if Proclamation does not occur).
Savings and transitional provisions
2.35 Items 34 to 38 of Schedule 1 to the Nation-building Funds
Repeal (National Disability Insurance Scheme Funding) Bill 2017 contain
transitional and savings provisions to ensure that residual matters relating
to the closure of the Building Australia Fund and the Education
Investment Fund are managed appropriately.
29
Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and
supporting Bills and Nation-building Funds Repeal (National Disability Insurance Funding)
Bill 2017
2.36 Item 34 provides that reporting obligations of the Board relating
to the Building Australia Fund and the Education Investment Fund
continue to apply despite the repeal of the Nation-building Funds
Act 2008.
2.37 Item 35 ensures that an agreement that is in force immediately
before the repeal of the section is taken, after that repeal, to continue in
force. If remaining Education Investment Fund project payments are not
made by the time the Nation-building Funds Act 2008 is repealed, these
payments will be made under the Higher Education Support Act 2003.
Item 35 also allows for the agreement to be varied or revoked by the
Minister responsible for the Higher Education Support Act 2003 if
required.
2.38 Item 36 provides that the repeal of provisions in the Future Fund
Act 2006 relating to the Nation-building Funds Act 2008, which affect
compliance with statutory duties, are to apply in relation to acts done after
the item commences.
2.39 Item 37 extends the requirement for the Annual Report given by
the Future Fund Board of Guardians to the Minister to include information
relating to the Building Australia Fund and the Education Investment
Fund. This includes debits relating to the Building Australia Fund and the
Education Investment Fund that are made from the Future Fund Special
Account after the Building Australia Fund and the Education Investment
Fund are repealed.
2.40 Item 38 does not allow any residual miscellaneous receipts that
may be received after the Building Australia Fund and the Education
Investment Fund are repealed, to be credited to the Future Fund Special
Account. Instead, these receipts are credited to the Consolidated Revenue
Fund, which will allow them to be subsequently credited to the National
Disability Insurance Scheme Savings Fund Special Account when it is
established.
2.41 Item 39 provides a rule making power to enable detailed rules to
be made in relation to transitional matters relating to the amendments or
repeals made by the Nation-building Funds Repeal (National Disability
Insurance Scheme Funding Bill) 2017. The areas where rules may not be
made are specified.
2.42 This provision is included to allow the Minister to deal with
unintended or unforeseen consequences of the amendments or the repeals
made by the Nation-building Funds Repeal (National Disability Insurance
Scheme Funding Bill) 2017. Rules made under this item are legislative
instruments under the Legislation Act 2003.
30
Closure of the Building Australia and the Education Investment Funds
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Nation-building Funds Repeal (National Disability Insurance Scheme
Funding) Bill 2017
2.43 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
2.44 This Bill repeals the Nation-building Funds Act 2008, makes
consequential amendments to five other Acts and provides transitional
arrangements, primarily to assist reporting.
Human rights implications
2.45 This Bill does not engage any of the applicable rights or
freedoms.
Conclusion
2.46 This Bill is compatible with human rights as it does not raise any
human rights issues.
31