Bills Digest No. 101, 2019–20
PDF version [710 KB]
Paula Pyburne
Law and Bills Digest Section
9
June 2020
Contents
Purpose of the Bills
Structure of the Bills
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Compliance and enforcement
Protected information
Review of decisions
Protection against civil liability
Date introduced: 13
May 2020
House: House of
Representatives
Portfolio: Employment,
Skills, Small and Family Business
Commencement: As
set out in the body of this Bills Digest.
Links: The links to the Bills,
their Explanatory Memoranda and second reading speeches can be found on the
homepage for the Payment
Times Reporting Bill 2020 and the Payment
Times Reporting (Consequential Amendments) Bill 2020,or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at June 2020.
Purpose of
the Bills
This Bills Digest relates to two Bills. The purpose of the
Payment Times Reporting Bill 2020 (the Reporting Bill) is to provide the
legislative framework for the Payment Times Reporting Scheme. The purpose of
the Payment Times Reporting (Consequential Amendments) Bill 2020 (Consequential
Amendments Bill) is to amend the Taxation
Administration Act 1953 to enable the Commissioner of Taxation to
disclose certain tax information to the Payment Times Reporting Regulator for
the purpose of administering the Scheme.
Structure of
the Bills
The Reporting Bill has five Parts:
- Part
1 sets out preliminary matters, including key definitions
- Part
2 is about reporting payment times
- Part
3 establishes the Payment Times Reporting Regulator
- Part
4 contains compliance and enforcement provisions which apply the Regulatory Powers
(Standard Provisions) Act 2014
- Part
5 relates to protected information and
- Part
6 contains miscellaneous provisions including a rule-making provision.
The Consequential Amendments Bill has two Parts:
- Part
1 contains general amendments to the Tax Administration Act and
- Part
2 sets out contingent amendments to the Payment Times Reporting Act
(when enacted).
Commencement
of the Bills
All of the provisions of the Reporting Bill
commence on 1 January 2021 provided that Royal Assent is before that date.
Otherwise, the provisions commence on the first 1 January or 1 July to occur after
Royal Assent.
Sections 1–3 of the Consequential Amendments Bill
commence on Royal Assent. The provisions in Part 1 of the Consequential
Amendments Bill commence at the same time as the Payment Times Reporting Act
2020 commences. However, the provisions in Part 1 do not commence at all if
that Act does not commence.
The provisions in Part 2 of the Consequential Amendments
Bill commence on the later of:
- immediately
after the commencement of the Payment Times Reporting Act 2020 and
- the
commencement of the Federal Circuit and Family Court of Australia Act 2020.[1]
However, the provisions of Part 2 of the Consequential
Amendments Bill do not commence at all unless both of the events set out above
occur.
Background
The problem
of late payments
The problems arising from late payment by big business to
its suppliers is not new. In November 2016, the Australian Small Business
and Family Enterprise Ombudsman (ASBFEO), together with the Council of
Small Business Australia, the Australian Institute of Credit Management and the
Institute of Public Accountants, in partnership with the Small Business
Commissioners in New South Wales, Victoria, South Australia and Western
Australia, commenced a self-initiated inquiry to examine payment times and practices
in Australia.[2]
In April 2017, the ASBFEO issued the final report of the
Payment Times and Practices Inquiry[3]
which had been carried out by that office (ASBFEO Report).[4]
The report identified two issues affecting businesses of all sizes being:
- late
payment times: getting paid beyond the agreed time in the contract and
- extended
payment terms: payment times beyond usual industry standards.[5]
The ASBFEO Report sets out the nature of the problem as
follows:
Both of these issues are related to trade credit terms agreed
between businesses when conducting business. Trade credit is the practice of
supplying goods and services to businesses or individuals with payment at an
agreed later date.
Late payments have been a perennial problem for businesses in
Australia ... Late payments affect cash flow of the business owed the outstanding
debt, forcing them to find ways to finance the short fall in their working
capital instead of being paid on time and using the cash flow to grow their
business. A lack of cash flow is the leading cause of business insolvency and
this underscores the importance of the issue of late payments which can easily
put many businesses out of operation.
Against the backdrop of late payments, there has been a
growing trend in payment practices, particularly amongst large Australian and
multinational businesses, to extend payment times. The growth in extended
payment times is partly linked to the practices of multinational businesses who
apply global policies to improve their working capital efficiency. Extending
payment times for suppliers effectively uses the businesses in the supply chain
as a cheap form of finance.
The growing trend for extended payment times impacts the
economy in two ways. Firstly, it slows down the flow of cash through supply
chains which limits the growth of businesses as they have more capital tied up
in financing their operations and secondly it raises costs for businesses which
are financing longer trade credit to their customers.[6]
Amongst other things, the ASBFEO Report recommended
establishing a National Payment Transparency Register to publish businesses
payment times and practices rated against a benchmark for good and bad
performers.[7]
Whilst that Register was established in December 2017, the Regulatory Impact Statement
suggests:
[that it] demonstrates voluntary reporting is likely not a
viable [option] to drive widespread improvement in practice.
... only 29 large firms had signed-up to the ASBFEO register by
mid-2019. Firms that have registered were already good performers, with all but
four of the signatories paying within 30 days. This highlights a second issue
with voluntary measures, which is that they are more likely to be taken up by
good actors. This means the firms with the poorest practices do not improve.[8]
Government
commitment
Following the publication of the ASBFEO Report, the Prime
Minister, Scott Morrison, announced on 21 November 2018, the Government’s
objective to improve payment times from large to small business.[9]
In the lead-up to the 2019 Federal Election, the Coalition committed to
‘ensuring small businesses are not used as a bank by requiring large businesses
with a turnover of over $100 million and government agencies to publish
their payment information’.[10]
Consultation
The Department of Education, Skills and Employment circulated
a discussion paper in February 2019 seeking input from stakeholders about
the design of the Payment Times Reporting Framework.[11]
The Department of Industry, Science, Energy and Resources circulated a
consultation paper and exposure draft of the proposed Payment Times Reporting
Bill on 21 February 2020.[12]
Supply chain
financing
Payment of
invoices
Generally speaking, when a company orders goods from a
supplier, the supplier delivers them and issues an invoice with a due day, such
as 30 days’ time. The company pays the supplier within the specified 30 days.[13]
If the debt is not paid then, depending on the terms of the invoice agreed to
between the supplier and debtor, late fees or
interest can accrue and ultimately legal action can be taken to forcibly
recover the unpaid amount.
Alternative
method—factoring
Factoring is defined as buying goods for resale
without further processing. Debt factoring is buying debts due from another
business’ customers and collecting them.[14]
Suppliers who have delivered their goods but want to get
paid earlier than the agreed time for payment have the option of factoring—that
is, approach a bank and selling 80 per cent of the invoice (typically the
maximum the bank is prepared to buy) before the due date. The bank later
collects the invoice payment.[15]
In this case the supplier (willingly) forgoes their entitlement
to the face value of the invoice for a smaller amount of assured revenue. That
is, the discount in forgone revenue is the price paid by the supplier
for timely cash flow.
Alternative
method—supply chain financing
Another option arises where big debtor
companies (with the help of banks and financiers) take the initiative and
suggest payment options to their suppliers. One such option is supply
chain financing (also known as reverse factoring). It
occurs when a finance company, such as a bank, interposes itself between a
company and its suppliers and commits to pay the company’s invoices to the
suppliers at an accelerated rate in exchange for a discount (usually smaller
than that in traditional factoring).[16]
The earlier a supplier wants to be paid for an invoice provided to one of its
debtors, the bigger the discount it must offer and the bigger the fees it must
pay.
Advantages for the debtor and supplier companies
Reverse factoring has the following benefits for the debtor
company that is paying its suppliers:
- the
debtor company can foster very close links with its core group of suppliers,
since this can be a major benefit to them in terms of accelerated cash
flow
- the
debtor company no longer has to deal with requests from suppliers for ‘early’
payment, since they are already being paid as soon as possible,[17]
at a period they selected themselves (noting suppliers are charged discounts
and/or other fees for ‘early’ payment) and
- the
debtor company can seek to extend payment times for its suppliers that don’t
enter into reverse factoring arrangements and therefore exert greater control
over its cash flow.[18]
Reverse factoring has the following benefits for suppliers:
- a
cash-strapped supplier can be paid much sooner than normal, in exchange for the
finance company’s fee and the discount (forgone revenue) provided
- the interest
rate charged by the finance company should be low, since it is based on
the credit standing of the paying (debtor) company, not the credit rating of
the suppliers.[19]
Problems for suppliers
It has been reported:
Supply chain financing, sometimes referred to as ‘‘reverse
factoring’’ or factoring of payables, has exploded in popularity. But it has
also attracted controversy because accounting rules don’t require companies to
disclose its use, and questions have been raised about whether suppliers are
being forced to accept unfavourable terms in the form of discounted payments.[20]
Concern over the increasing use of supply chain financing
is rising globally. There are reports that suppliers that seek to rely on the
traditional payment of invoices by debtors are, as a matter of practicality,
being forced to accept longer payment terms and therefore are receiving payment
later than under previous arrangements.
Review by the ASBFEO
From that perspective it may be that suppliers are faced
with entering into reverse factoring agreements in order to get paid within 30
days—the usual terms of trade. Under such an arrangement suppliers are forced
to offer discounts for supposed ‘early’ payment—even though the ‘early’ payment
offered is no more than what was previously normal terms of trade. That being
the case, in October 2019 Kate Carnell, Australian Small Business and Family
Enterprise Ombudsman, announced a review into the
impact of supply chain financing on the small business and family
enterprise sector.[21]
The final report of the Supply Chain Finance Review was
released in March 2020.[22]
In the forward to the report, Ms Carnell states:
I have been extremely disappointed to receive numerous
reports of large businesses extending payment times, or even suspending
payments to small businesses in a time of significant pressure for the business
community. These businesses, many of which have turnover in the hundreds of
millions of dollars per year, are pushing the pain felt by the current economic
climate on to small suppliers who can least afford it. There is no doubt that
this behaviour by large players will not pass the pub test. Those that do this
should be on notice that behaviours that damage their small business suppliers
will, in the end, damage them too.[23]
Committee
consideration
Senate Standing Committee
for Selection of Bills
At its meeting of 13 May 2020, the Senate Standing
Committee for the Selection of Bills deferred consideration of the Bills.[24]
Senate
Standing Committee for the Scrutiny of Bills
At the time of writing this Bills Digest the Senate
Standing Committee for the Scrutiny of Bills had not commented on the Bills.
Policy
position of non-government parties/independents
Shadow Minister for Small and Family Business, Brendan
O’Connor, has reportedly called for the Minister for Employment, Skills, Small
and Family Business, Senator Michaelia Cash, to hold a roundtable on the Bills,
given small business concerns on the approach taken, particularly ‘the
extensive use of delegated legislation’ to set out the details of the scheme’s operation.[25]
Mr O’Connor expressed concern that the rules that the Minister is
empowered to make had not been released and that ‘the government appears to be
seeking the parliament’s passage of the enabling legislation without any
assurance that the Minister’s Rules are adequate’.[26]
Another area of concern for Mr O’Connor was the perceived failure of the Bill
to deal adequately with supply chain financing:
Of significant concern to many small businesses is that the
legislation does not adequately deal with the use of [supply chain financing]
SCF. I note that a passing, non-defined reference to SCF had been added to the
legislation but this only serves to emphasise that SCF ‘may’ be addressed in
the Minister’s Rules.[27]
Other non-government parties and independents have not
publicly stated their positions on the Bills as at the date of this Digest.
Position of
major interest groups
In a submission to the then Department of Jobs and Small
Business on its February 2019 discussion paper, the Australian Chamber of
Commerce and Industry (ACCI) stated that it supported the ‘aim of getting big
business to pay small business as quickly as possible’ but was concerned with
how a payment times reporting framework could be ‘effectively and efficiently
achieved’.[28]
In particular, the ACCI was worried that the framework would be overly complex
and result in ‘burdensome red tape’ for business. The ACCI was concerned that the
inclusion of businesses with total income of more than $100 million will ‘capture
a substantial number of medium-sized businesses, extending the economic drag of
red tape burden’.[29]
To address this concern, the ACCI suggested that only the largest businesses
(those with annual turnover of more than $250 million) should be captured by
the reporting framework, or that it be phased in by company size over a number
of years.[30]
In a submission to the Department of Industry, Science,
Energy and Resources on the consultation paper and exposure draft of the Bill
released in February 2020, Chartered Accountants Australia and New Zealand (CAANZ)
and CPA Australia expressed concern about how ‘small business’ will be defined.[31]
The term is not defined in the Reporting Bill, but will instead be set out in
the rules to be made by the Minister. CAANZ and CPA Australia stated that they
‘remain firmly of the view that key legislative concepts, such as the
definition of small business, should be contained in legislation not rules’.[32]
Trent Innes, Managing Director of Xero Australia, which facilitated
a report
on the economic impact of big businesses paying Australian small businesses
late,[33]
has welcomed the Bills:
Xero’s 2019 report on late payments estimates that half of
all invoices issued by small business to big business are paid late. Big
businesses pay $115 billion late to small businesses each year with payments
arriving 23 days past their due date on average. Changing this behaviour will
have enormous benefits for small businesses and the broader economy.
As Australia’s economy begins to recover from the fallout of
the COVID-19, it will be more important than ever that businesses are being
paid on time to boost their confidence to invest and employ.
Additionally, following the commitment of government to move
towards e-invoicing and five day payment terms for invoices under $1 million
from January 2020, there should be no reason why big business can’t follow
suit.
In providing greater visibility, the Payment Times Reporting
Framework will ultimately inform whether industry-led solutions are working or
if further legislation will be required.[34]
The Bills have also been welcomed by the Institute of
Public Accountants, which considers that they ‘will go a long way to help small
businesses that are struggling with cash flow issues’.[35]
The Australian Trucking Association (ATA) welcomed the
Bills, noting that over 98 per cent of trucking operators are owner-operators
or small businesses, but considered that the Bills do not go far enough, and
urged the Government to ‘include all business to business transactions in
mandatory payment terms legislation, with the statutory time period set at 20
days’.[36]
Financial
implications
According to the Explanatory Memorandum for the Bills, the
financial impact for the Government will be ‘$10.0 million over four years from
2019-20 (including $3.4 million in capital funding), $2.6 million in
2023-24 and $2.4 million per year ongoing from 2024-25’.[37]
The measures in the Bills ‘will increase compliance costs
for reporting entities by an average of $22.5 million per year, on an
annualised basis’.[38]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[39]
Parliamentary
Joint Committee on Human Rights
At the time of writing this Bills Digest the Parliamentary
Joint Committee on Human Rights had not commented on the Bills.
Key issues
and provisions
Establishing
the Payment Times Reporting Regulator
Clause 24 of the Reporting Bill establishes the position
of the Payment Times Reporting Regulator (the Regulator). The Secretary
of the Department is required to designate a position within the Department as
the Regulator, in writing.[40]
The Regulator is the SES employee who occupies, or the acting SES
employee who is acting in, that position.[41]
The Regulator is empowered to carry out the
following functions:
- to
administer the Payment Times Reporting Act (when enacted)
- to
undertake functions conferred by the Payment Times Reporting Act
- to
monitor and enforce compliance with Payment Times Reporting Act
- to
undertake any other function prescribed by the rules
- to
undertake any other function conferred by any other law of the Commonwealth
- to
advise the Minister about matters relating to any of the functions set out
above and
- to do anything incidental or conducive to the performance of any
of the preceding functions.[42]
The Regulator may delegate some but not all of his, or her
powers under the Payment Times Reporting Act. The functions of
appointing authorised officers and infringement officers, under clauses 35
and 36, may not be delegated.[43]
The following functions may only be delegated to an SES employee, or acting SES
employee:
- determining
that an entity has ceased to be a reporting entity (subclause 7(3))
- allowing
an entity additional time in which to give a payment times report (subclause
13(4))
- publishing
information about failure to comply with the Act (subclause 22(1)) and
- requiring
a reporting entity to arrange an audit (subclause 30(2)).[44]
The Regulator’s other functions or powers may be delegated
to either an SES employee or a person holding an Executive Level 2 position in
the Department, or a person acting in one of those positions.[45]
In performing a delegated function or exercising a delegated power, the delegate
must comply with any written directions of the Regulator.[46]
Rule-making power
Subclause 58(1) of the Reporting Bill sets out
the powers of the Minister to make Rules for the purposes of the Payment
Times Reporting Act (when enacted). The power is limited by subclause 58(2)
which provides that the Rules may not, amongst other things, create an offence
or civil penalty; provide powers of arrest or detention or entry, search or
seizure; impose a tax; set an amount to be appropriated; or directly amend
the Act.
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Establishing the Payment Times Reports Register
Clause 17 of the Reporting Bill requires the
Regulator to maintain the Payment Times Reports Register (the Register)
which must be available for public inspection, without cost, on the internet.
Who must
report
Income test
to be applied
Subclause 7(2) of the Reporting Bill is directed
toward an entity that carries on an
enterprise[47]
in Australia, is not registered under the Australian
Charities and Not-for-profits Commission Act 2012 (ACNC Act) and
to which any one of the following applies:
- the
total income for the entity for the most recent income year for the entity was
more than $100 million
- if
the entity is a controlling corporation—the combined total income for all
members of the controlling corporation’s group for the most recent income year
for the controlling corporation was more than $100 million or
- if
the entity is a member of the group of a controlling corporation where the
group’s income for the most recent income year was more than $100 million—the
total income for the entity for the most recent income year for the entity was
at least $10 million.
Becoming a
reporting entity
Under subclause 7(1) of the Reporting Bill a
constitutionally covered entity becomes a reporting entity at the
start of an income year (the relevant income year) for the
entity, if it is an entity with a total income as identified above.
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Constitutionally covered entity
Under the Reporting Bill, each of the following is a constitutionally
covered entity:
- a
constitutional corporation (that is, a foreign corporation, or a trading or
financial corporation formed in Australia)
- a
foreign entity
- an
entity, other than a body politic, that carries on an enterprise
in a Territory
- a body
corporate that is incorporated in a Territory
- a body
corporate that is taken to be registered in a Territory under section 119A of
the Corporations
Act 2001
- a
corporate Commonwealth entity, or a Commonwealth company, within the meaning
of the Public
Governance, Performance and Accountability Act 2013.[48]
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In the alternative, a volunteering entity
may, before the start of the relevant income year, give the Regulator notice in
writing that it elects to become a reporting entity at the start of that income
year.[49]
What is to
be reported
Clause 12 of the Reporting Bill states that a reporting
entity must give the Regulator a payment times report for each
reporting period for the entity. Clause 8 of the Reporting Bill
defines a reporting period as the first six months of each income
year in which the entity is a reporting entity and the remainder of each such
income year.
Subclause 14(1) of the Reporting Bill lists those
matters which must be reported to the Regulator. Amongst other things,
the report must:
- state
the reporting period to which it relates
- state
the shortest and longest standard payment periods (as prescribed
by the rules[50])
for the entity at the start of the reporting period and the details of any
changes to those standard payment periods during that period
- state
the proportion, determined by total number and total value, of small
business invoices[51]
paid by the entity during the reporting period in accordance with each of the following:
- less
than 21 days after the invoice was issued
- between
21 and 30 days after the invoice was issued
- between
31 and 60 days after the invoice was issued and
- more
than 60 days after the invoice was issued.[52]
The details of the principal governing body of
the entity must also be contained in the payment times report. This refers to the
body, or group of members of the entity, with primary responsibility for its governance
or such other body which is prescribed by the rules. By way of example if the entity
is a company, the principal governing body is the company’s board of directors.[53]
Where the entity is a member of a controlling
corporation’s group—the controlling corporation is to be identified in
the payment times report. A controlling corporation is an entity that is incorporated
in Australia and is not a subsidiary of another body corporate that is incorporated
in Australia.[54]
The Reporting Bill requires that a responsible
member of an entity makes a declaration in the payment times report that
the report will be provided to its principal governing body.[55]
This is a reference to:
- an
individual member of the entity’s principal governing body who is authorised to
sign payment times reports
- the
trustee of a trust administered by a sole trustee
- the
person constituting a corporation sole
- the
administrator of a corporation under administration within the meaning of the Corporations Act
2001
- the
member of any type entity that is prescribed by the rules.[56]
The payment times report must also detail any notifiable
event that has occurred since the last payment times report.[57]
Finally, the payment times report must include any other information
or documents prescribed by the rules.[58]
Subclause 14(3) provides that the relevant information or documents may
relate to the entity’s payment terms or practices, including supply chain
financing. If the rules require the provision of this information, it will have
the effect of identifying publicly those entities that engage in supply chain
financing.
Key
issue—what is a small business
The Reporting Bill does not define the term small
business. That will be left to the rules.[59]
According to the Explanatory Memorandum to the Bills, ‘the Scheme will draw on
a taxation legislation definition of small business as entities with annual
turnover of less than $10 million’.[60]
As set out above, concerns have been raised by Labor and industry stakeholders
as to the appropriateness of dealing with key aspects of the payment times
reporting scheme in delegated, rather than primary, legislation.[61]
When the report
must be given to the Regulator
Subclause 13(1) of the Reporting Bill requires the
payment times report to be given to the Regulator within three months after the
end of the reporting period.
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Example
Company A is a reporting entity on 1 July 2021 and
remains so for the financial year of
2021–22.
The first reporting period is 1 July 2021 to 31 December
2021. The payment times report for this period must be given to the Regulator
by 30 March 2022.
The second reporting period is 1 January 2022 to 30 June
2022. The payment times report for this period must be given to the Regulator
by 30 September 2022.
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Extension of
time
A reporting entity may apply in writing to the Regulator
for further time to give the report.[62]
In that case, the application must specify the reasons for the request and
include evidence in support of the request, including any additional
information which is set out in the rules.
The Regulator may grant the request if, having considered
the application and any matters specified in the rules, the Regulator is
satisfied that the circumstances that have resulted in the need for further
time were exceptional or were outside the entity’s control. In that case, the
Regulator must give the reporting entity a written notice specifying the
further time within which the report is to be provided.[63]
A decision not to allow further time to give a payment
times is reviewable under clause 51 of the Reporting Bill (see further
information below).
Registration
of payment times reports
The Regulator must maintain a register of payment times
reports (the Register).[64]
Each payment times report provided to the Regulator must be included in the
Register.[65]
However, the Regulator may decide that certain information contained in a
payment times report will not be made public, if the Regulator considers that
making the information public would be contrary to the public interest.[66]
In making that decision the Regulator must have regard to whether the
information is personal information within the meaning of the Privacy Act 1988
or is commercial-in-confidence. The Regulator must also have regard to any
other matters set out in the rules.[67]
Information is commercial-in-confidence if the Regulator is
satisfied that:
- release
of the information would cause competitive detriment to a reporting entity
- the
information is not in the public domain and is not required to be disclosed
under another Australian law and
- the
information is not readily discoverable.[68]
The Explanatory Memorandum clarifies:
Given the objective of the Scheme, whilst its publication may
cause competitive detriment, poor payment time performance or information about
payment terms, are not considered commercial-in-confidence.[69]
Publication
of information about failure to comply with requirements
If the Regulator is reasonably satisfied that a reporting
entity has failed to comply with the legislative requirements, the Regulator
may publish the identity of the entity and details of the non-compliance on the
Register or in any other way that the Regulator considers appropriate.[70]
The Regulator must not publish such information because of a failure by the entity
before the enforcement day, which occurs 18 months after the Act
commences.[71]
Before publishing such information, the Regulator must:
- give
the entity notice in writing of the proposed decision and the reasons for the
proposed decision
- invite
the entity to make written submissions to the Regulator about the proposed
decision within 28 days and
- have
regard to any written submissions made by the entity within that period.[72]
A decision by the Regulator to publish information about
failure to comply with the legislation is reviewable under clause 51 of
the Reporting Bill (see further information below).
Ceasing to
be a reporting entity
The general rule is that a reporting entity continues to
be a reporting entity—and so is required to make a payment times report for a
reporting period—until the Regulator determines that this is no longer the case.[73]
A reporting entity may make a written application for such a determination. The
application must include any information or documents which are required by the
rules.[74]
The circumstances in which the Regulator must make the
relevant determination are as follows:
- the
Regulator is satisfied that the total income for the entity for each of the two
most recent income years for the entity was not more than $100 million,[75]
and if the entity is a controlling corporation or a member of a controlling
corporation’s group then the Regulator is satisfied that the combined total
income for all members of the controlling corporation’s group for each of the
two most recent income years was not more than $100 million[76]
- the
Regulator is satisfied that the entity is registered under the Australian
Charities and Not-for-profits Commission Act[77]
or
- the
Regulator is satisfied that the entity is a volunteering entity.[78]
The determination takes effect from the start of the
income year for the entity in which the determination is made.[79]
A decision not to determine that an entity has ceased to be a reporting entity
is reviewable under clause 51 of the Reporting Bill (see further
information below).
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Examples
Entity B is a volunteering entity on 1 July 2021.
Its first reporting period is 1 July 2021 to 30 December 2021. On 1
February 2022—that is, before its payment times report for this period is due
on 30 March 2022— it applies to opt out of its obligation to report.
The Regulator determines on 28 February 2022 that Entity B
has ceased to be a reporting entity.
As the determination has effect from the start of the
income year in which the determination is made, Entity B will not be required
to give the Regulator a payment times report at all.
Entity C is also a volunteering entity on 1 July
2021. Its first reporting period is 1 July 2021 to 30 December 2021; and
it gives the Regulator its payment times report for the period on or before
30 March 2022.
On 1 August 2022 it applies to opt out of its obligation
to report; and the Regulator determines on 30 August 2022 that Entity C has
ceased to be a reporting entity.
As the determination has effect from the start of the
income year in which the determination is made, Entity B will be required to
give the Regulator a payment times report for the second reporting period of
the financial year 2021–22. However it will not be required to provide a
payment times report in respect of the financial year 2022–23.
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Exception
There is an exception to the general rule. A reporting
entity that is a member of a controlling corporation’s group ceases to
be a reporting entity immediately after the end of an income year (the relevant
income year) for the entity provided that:
- the
entity is not a volunteering entity and
- the
total income for the entity for the relevant income year and the income year
immediately preceding the relevant income year was less than $10 million.[80]
According to the Explanatory Memorandum to the Bills:
Entities that are part of a corporate group but have total
income individually of less than $10 million for two income years will not
be required to seek a determination from the Regulator to cease reporting.
This is designed to reduce the regulatory burden of large numbers of small
entities seeking decisions from the Regulator on their reporting status.[81]
[emphasis added]
Compliance
and enforcement
The Regulatory Powers Act provides for a framework
of standard regulatory powers exercised by agencies across the Commonwealth. It
reflects the Guide to Framing Commonwealth Offences, Infringements Notices
and Enforcement Powers[82]
and applies to regulatory schemes which trigger its provisions through primary
legislation—as the Reporting Bill does.
Civil
penalties
The Reporting Bill creates a number of civil penalties that
are enforceable under Part 4 of the Regulatory Powers Act.[83] These civil penalties
do not apply in relation to conduct engaged in before the enforcement day,
which occurs 18 months after the Act commences.[84]
The Explanatory Memorandum states that this is ‘intended to allow time for
reporting entities to become familiar with the Scheme without the threat of
compliance and enforcement action while they are transitioning to the new
arrangements’.[85]
Failure to
report
A reporting entity, other than a volunteering entity, is
liable to a civil penalty if the entity fails to comply with the requirements
set out in clauses 12–14. The maximum civil penalty is 60 penalty units for an
individual or 300 penalty units for a body corporate.[86] A reporting entity that
fails to provide a report in accordance with the legislative requirements
commits a separate contravention in respect of each day that the contravention
occurs. That is, a separate civil penalty may be imposed for each day that the
required report remains outstanding.[87]
False or
misleading information
A reporting entity, other than a volunteering entity, is
also liable to a civil penalty if it provides a payment times report to the
Regulator that is false or misleading in a material particular.[88] The maximum penalty is 350
penalty units for an individual,[89]
or 0.6 per cent of the total income for the income year in which the
contravention occurred for a body corporate. While a volunteering entity is
also prohibited from giving the Regulator a payment times report that is false
or misleading in a material particular, it is not subject to a civil penalty
for doing so.
Failure to
keep records
A reporting entity is required to keep records of any
information used in the preparation of a payment times report for at least
seven years after the end of the relevant reporting period.[90]
The maximum penalty is 200 penalty units for an individual,[91] or 0.2 per cent of the
total income for the income year in which the contravention occurred for a body
corporate.[92]
Failure to
comply with audit requirements
If the Regulator reasonably suspects that a reporting
entity has contravened a provision of the Payment Times Reporting Act
(when enacted), the Regulator may, by written notice, require the entity to
appoint an auditor approved by the Regulator and arrange for the auditor to
carry out an audit of the entity’s compliance with the Act, or with specified
aspects of the Act. The entity must provide the Regulator with a written report
setting out the results of the audit within the period specified in the notice,
or a longer period as the Regulator allows.[93]
The reasonable fees and expenses of the auditor for preparing the report are
payable by the entity.[94]
A reporting entity, other than a volunteering entity, is liable to a civil
penalty for failure to comply with a notice from the Regulator requiring an
audit. The maximum penalty is 60 penalty units for an individual or 300 penalty
units for a body corporate.[95]
A reporting entity required by the Regulator to have an
audit conducted must provide the auditor and any persons assisting the auditor
with all reasonable facilities and assistance necessary for the effective
exercise of the auditor’s duties.[96]
Failure to do so is a breach of a civil penalty provision with a maximum
penalty of 200 penalty units for an individual,[97] or 0.2 per cent of the
total income for the income year in which the contravention occurred for a body
corporate.[98]
The Regulator may not give a reporting entity a notice
requiring the entity to arrange an audit before the enforcement day
(18 months after the Act commences).[99]
Infringement notices
Clause 34 of the Reporting Bill provides that each
of its civil penalty provisions is subject to an infringement notice under Part
5 of the Regulatory Powers Act.
Part 5 of the Regulatory Powers Act operates so
that an infringement notice may be given if an infringement officer believes on
reasonable grounds that a person has contravened a provision subject to an
infringement notice. An infringement notice must be given within 12 months after
the day on which the contravention is alleged to have taken place.[100]
The Regulator is an infringement officer and may also appoint
an APS employee as an infringement officer if they hold or perform the duties
of an Executive Level 2 position or higher and the Regulator is satisfied that
they have the knowledge or experience necessary to properly exercise the powers
of an infringement officer.[101]
In exercising their powers, an infringement officer must comply with any
directions of the Regulator.[102]
The information required to be included in an infringement
notice is set out in detail in section 104 of the Regulatory Powers Act,
including amongst other things:
- the
day the notice is given and the name of the person to whom it is given
- the
name and contact details of the person who gave the notice and brief details of
the alleged contravention
- the
amount that is payable under the notice and how payment may be made
- the
requirement to pay the amount specified within 28 days after the day the notice
and the consequences of a failure to do so—including the possibility of
prosecution for a contravention of a civil penalty provision and
- an
explanation that the person may choose not to pay the infringement notice
amount and may instead have the matter dealt with by a court.
Under the Regulatory Powers Act, the maximum
penalty that may be imposed for each contravention covered by an infringement
notice is the lesser of one-fifth of the maximum penalty amount that a court
could impose on the person for that contravention, and 12 penalty units for an
individual or 60 penalty units for a corporation.[103]
Monitoring powers
Part 2 of the Regulatory Powers Act creates a
framework for monitoring whether legislative requirements have been complied
with and whether information given in compliance, or purported compliance, with
legislative requirements is correct.[104]
Clause 31 of the Reporting Bill applies the monitoring powers in Part 2
of the Regulatory Powers Act and provides that the following are subject
to monitoring powers:
- a
provision of the Payment Times Reporting Act
- an
offence against the Crimes
Act 1914 or the Criminal Code
that relates to the Payment Times Reporting Act
- information
given in compliance or purported compliance with a provision of the Payment
Times Reporting Act.
However, the provisions are not subject to monitoring before
the enforcement day (18 months after the Act commences).[105]
Basic monitoring powers
The relevant monitoring powers include the power in
section 19 of the Regulatory Powers Act to:
- search
the premises and any thing on the premises
- examine
or observe any activity conducted on the premises
- inspect,
examine, take measurements of or conduct tests on any thing on the premises
- make
any still or moving image or any recording of the premises or any thing on the
premises
- inspect
any document on the premises
- take
extracts from, or make copies of, any such document and
- take
onto the premises such equipment and materials as the authorised person
in order to exercise powers in relation to the premises.
An authorised person may exercise these
powers if the occupier of the relevant premises consents to the entry or the
entry is made under a monitoring warrant.[106]
The Regulator and each authorised officer under the Payment
Times Reporting Act is an authorised person for the purposes of Part 2 of the
Regulatory Powers Act.[107]
Authorised officers are appointed by the Regulator in writing under clause
35 of the Reporting Bill. A person is eligible to be appointed as an
authorised officer if they are an APS employee who holds or performs the duties
of an Executive Level 1 position or higher and whom the Regulator is satisfied
has the knowledge or experience necessary to properly exercise the powers of an
authorised officer.[108]
In exercising their powers, an authorised officer must comply with any
directions of the Regulator.[109]
There are additional powers in the Regulatory Powers
Act which permit an authorised person to:
- operate
electronic equipment on the premises, to put relevant data in documentary form
and remove those documents from the premises[110]
- secure
electronic equipment where an authorised person enters premises under a
monitoring warrant[111]
- secure
a thing for a period of 24 hours in circumstances where the thing is found
during the exercise of monitoring powers on the premises and an authorised
person believes on reasonable grounds that it relates to the
contravention of a related provision[112]
and
- to
ask questions and seek production of documents once on the premises.[113]
These
powers may also be exercised either with the consent of the occupier of the
relevant premises or subject to a monitoring warrant.[114]
Issuing a
monitoring warrant
A monitoring warrant is issued if the issuing
officer[115]
is satisfied that it is reasonably necessary for one or more authorised persons
to have access to premises for the purpose of determining whether a provision
that is subject to monitoring has been, or is being, complied with or that
information subject to monitoring is correct.[116]
An application for a warrant may be made by the Regulator or an authorised officer.[117]
The specific requirements of a monitoring warrant are
section out in section 32 of the Regulatory Powers Act.
Investigation powers
Nature of investigation powers
Part 3 of the Regulatory Powers Act creates a
framework for gathering material that relates to the contravention of offence
provisions and civil penalty provisions.[118]
It includes powers of entry, search and seizure.[119]
Clause 32 of the Payment Times Reporting Bill sets
out the provisions that are subject to the use of investigation powers under
the Regulatory Powers Act. They are:
- a
civil penalty provision under the Payment Times Reporting Act or
- an
offence against the Crimes
Act 1914 or
the Criminal
Code that relates to the Payment Times Reporting Act.
However, the provisions are not subject to monitoring before
the enforcement day (18 months after the Act commences).[120]
Part 3 of the Regulatory Powers Act allows the
gathering of evidential material in respect of the above.
Evidential material means:
- a
thing with respect to which an offence provision or a civil penalty provision
subject to investigation under Part 3 has been contravened or is suspected, on
reasonable grounds, to have been contravened
- a
thing that there are reasonable grounds for suspecting will afford evidence as
to the contravention of such an offence provision or a civil penalty provision
- a
thing that there are reasonable grounds for suspecting is intended to be used
for the purpose of contravening such an offence provision or a civil penalty
provision.[121]
The investigation powers which are imported
from section 49 of the Regulatory Powers Act include the power to:
- where
the occupier consents to entry—search the premises and any thing on the
premises for the evidential material the authorised officer suspects on
reasonable grounds may be on the premises
- where
the entry is under warrant—search the premises and any thing on the premises
for the kind of evidential material specified in the warrant and to seize
evidential material of that kind if the authorised officer finds it on the
premises
- inspect,
examine, take measurements of, or conduct tests on, the evidential material
- make
any still or moving image or any recording of the premises or evidential
material and
- take
such equipment and materials as the authorised officer requires for the purpose
of exercising powers in relation to the premises.
These powers may be exercised by an authorised
person. The Regulator and each authorised officer under
the Payment Times Reporting Act is an authorised person for the purposes
of Part 3 of the Regulatory Powers Act.[122] Authorised officers are
appointed by the Regulator in writing under clause 35 of the Reporting
Bill. A person is eligible to be appointed as an authorised officer if they are
an APS employee who holds or performs the duties of an Executive Level 1 position
or higher and whom the Regulator is satisfied has the knowledge or experience
necessary to properly exercise the powers of an authorised officer.[123] In
exercising their powers, an authorised officer must comply with any directions
of the Regulator.[124]
There are additional powers in the Regulatory Powers
Act which permit an authorised person to:
- operate
electronic equipment on the premises, to put relevant data in documentary form
and remove those documents from the premises[125]
- secure
electronic equipment where an authorised person enters premises under an investigation
warrant[126]
and
- seize
a thing that is not evidential material in circumstances where the evidential
material is found in the execution of an investigation warrant which an authorised
person believes on reasonable grounds is evidence of the contravention of a
related provision.[127]
Issuing an investigation warrant
Where an authorised person suspects on reasonable grounds
that there may be evidential material on any premises, he or she may enter the
premises and use investigation powers so long as the occupier consents or the
authorised person has an investigation warrant.[128]
The provisions in Part 3 of the Regulatory Powers Act set out the
requirements for applying for an investigation warrant and its contents.[129]
An application for a warrant may be made by the Regulator or an authorised
officer.[130]
Protected
information
Part 5 of the Reporting Bill sets out how information
obtained under the Payment Times Reporting Act (when enacted) may be
used or disclosed and establishes an offence for unauthorised disclosure.
Information that is obtained under or in accordance with
the Bill is protected information. The Bill restricts how an entrusted
person may deal with information. The Secretary, the Regulator, an APS employee
in the Department and any other person employed in or engaged by the Department
is an entrusted person.[131]
An entrusted person may only use or disclose protected information in the
following circumstances:
- when
performing functions or duties or exercising powers under the Payment Times Reporting
Act (when enacted)[132]
- for
the purposes of policy development[133]
- to
a court, tribunal or coronial inquiry in accordance with an order of that body[134]
- to
an enforcement body, if the entrusted person reasonably believes that the use
or disclosure is reasonably necessary for, or directly related to, one or more
enforcement related activities being conducted by, or on behalf of, the
enforcement body[135]
- as
required under an Australian law.[136]
An entrusted person may also disclose protected
information to the person to whom the information relates or to the person who
provided the information,[137]
and may use or disclose protected information if the person to whom the
information relates has expressly consented to the use or disclosure.[138]
An entrusted person commits an offence if they obtain
protected information in their capacity as an entrusted person and they use or
disclose the information in a way that is not authorised under the Bill.[139]
The maximum penalty is two years imprisonment and/or 120 penalty units
(currently $25,200). The offence does not apply to the extent that the person uses
or discloses protected information in good faith and in purported compliance
with a provision of the Reporting Bill. The person bears an evidential burden
in relation to this matter, which means that they would need to adduce or point
to evidence that suggest a reasonable possibility that the matter exists).[140]
Section 355-65 of the Taxation
Administration Act 1953 allows protected taxation information to be
provided by a taxation officer to another entity for specified government
purposes. Clause 1 of the Consequential Amendments Bill amends
the table at subsection 365-65(8) of the Taxation Administration Act to
allow disclosure of information relating to whether an entity is a reporting entity
within the meaning of the Reporting Bill to the Regulator, for the purpose of
enabling the Regulator to administer the Payment Times Reporting Act.
Information may be disclosed to the Regulator after commencement of the Payment
Times Reporting Act, whether the information was obtained before, at or
after that time.[141]
Review of
decisions
Clause 51 of the Reporting Bill provides that the following
decisions by the Regulator (or a delegate) are reviewable:
- a
decision not to determine that an entity has ceased to be a reporting entity,
under subclause 7(3)
- a
decision not to allow further time to give a payment times report, under subclause 13(4)
- a
decision to publish the identity of an entity or details of non-compliance,
under subclause 22(1).
A person whose interests are affected by a reviewable
decision may apply in writing to the Regulator for a reconsideration of the
decision, within 14 days of being notified of the decision.[142]
On receiving an application, the Regulator must either personally reconsider
the decision or cause the decision to be reconsidered by a delegate who was not
involved in making the original decision and who occupies a position that is at
least the same level as the person who made the original decision.[143]
The person who reconsiders the decision is the internal decision reviewer.
After reconsidering the decision the internal decision
reviewer must either affirm the decision, vary the decision, or set the
decision aside and substitute a new decision.[144]
The internal decision reviewer must give written notice of the reconsideration
decision to the applicant, and give a copy of the notice to the Secretary.[145]
Applications may be made to the Administrative Appeals
Tribunal (AAT) for review of a reconsideration decision of an internal
reviewer.[146]
(That is, the internal review process must be utilised before a person can seek
review from the AAT.)
Protection
against civil liability
Clause 57 of the Reporting Bill provides that no
action for defamation, breach of confidence or infringement of copyright lies
against the Commonwealth, the Regulator, a delegate, or an APS employee in the
Department who has been made available to assist the Regulator, for or in
relation to an act done or omitted to be done in good faith in the performance
of functions or the exercise of powers, under the Reporting Bill. The
Explanatory Memorandum explains:
This is necessary because there are specific risks under this
Act that actions done in compliance with the Act could be perceived as, for
example, defamatory. For example, publication of non-compliance information
under section 19, or publication of payment times reporting information that could
be perceived as reflecting poorly on a reporting entity. This provision makes
it clear that those who act in good faith in administering this Act are
protected from these kinds of legal proceedings.[147]
[1]. The
Federal
Circuit and Family Court of Australia Bill 2019 was introduced on 5
December 2019 and is yet to be considered by the House of Representatives.
[2]. Australian
Small Business and Family Enterprise Ombudsman (ASBFEO), Trade
credit, Australian Government policies and overseas responses to payments
practices, Working paper, 1, ASBFEO, Canberra, April 2017, p. 4.
[3]. ASBFEO,
‘Payment
Times and Practices Inquiry’, ASBFEO website.
[4]. ASBFEO,
Payment
Times and Practices Inquiry: final report, ASBFEO, Canberra, April
2017.
[5]. Ibid.,
p. 4.
[6]. Ibid.,
pp. 4–5.
[7]. Ibid.,
p. 17; ASBFEO, ‘National
Payment Transparency Register’, ASBFEO website.
[8]. Regulatory
Impact Statement in Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 16.
[9]. S
Morrison (Prime Minister) and M Cash (Minister for Small and Family Business,
Skills and Vocational Education), Paying
small business on time, joint media release, 21 November 2018.
[10]. Liberal
Party of Australia, Our
plan to back small business, Liberal Party policy document, Election
2019, 23 April 2019.
[11]. Department
of Jobs and Small Business (DJSB), Payment
Times Reporting Framework: discussion paper, DJSB, Canberra, February
2019.
[12]. Department
of Industry, Science, Energy and Resources (DISER), Payment
Times Reporting Bill: exposure draft, DISER website.
[13]. J
Wiggins, ‘Pros
and cons of “supply chain finance”’, The Australian Financial Review
Weekend, 12 October 2019, p. 23.
[14]. J
Black, N Hashimzade and G Myles, A
dictionary of economics, 4th edn, Oxford University Press, Oxford,
2013.
[15]. Wiggins,
‘Pros
and cons of “supply chain finance"’, op. cit.
[16]. See:
Accounting Tools, ‘Reverse
factoring’, Accounting Tools website, last updated 25 April 2020.
[17]. Ibid.
[18]. J
Wiggins, ‘Misuse
of supply chain financing “unacceptable”’, The Australian Financial
Review, 31 October 2019, p. 23: ‘Big companies ... use supply chain financing
to extend formal payment terms ... while typical payment terms with suppliers
historically might have been 60 to 90 days, some entities are now trying to
negotiate payment terms with suppliers of up to 180, 210 or even 364 days’; V
Poljak, ‘Telstra’s
accounts defy Buffett’s war on complexity’, The Australian Financial
Review, 16 October 2019, p. 25: ‘Depending on how reverse
factoring is used, it can lead businesses to lean on suppliers to accept
discounts in exchange for early payment, and extend payment terms for suppliers
that decline to participate in such a facility’.
[19]. Accounting
Tools, ‘Reverse
factoring’, op. cit.
[20]. J
Shapiro and V Poljak, ‘Telstra
exposure to reverse factoring explodes to $600 million’, The Australian
Financial Review, 21 August 2019, p. 15.
[21]. ASBFEO,
‘Review of
supply chain financing’, ASBFEO website, 2020.
[22]. ASBFEO,
Supply
Chain Finance Review: final report, ASBFEO, Canberra, March 2020.
[23]. Ibid.,
p. 3.
[24]. Senate
Standing Committee for Selection of Bills, Report,
4, 2020, The Senate, Canberra, 14 May 2020.
[25]. J
Lynch and N Evans, ‘Labor
cautious as legislation dodges key issue of supply-chain financing’, The
Australian, 18 May 2020, p. 13.
[26]. Ibid.
[27]. Ibid.
[28]. Australian
Chamber of Commerce and Industry, Payment
Times Reporting Framework - Submission to the Department of Jobs and Small
Business, March 2019, p. 1.
[29]. Ibid.,
p. 3.
[30]. Ibid.,
pp. 3 and 5.
[31]. Chartered
Accountants Australia and New Zealand (CAANZ) and CPA Australia, Payment
Times Reporting Rules - exposure draft and consultation paper,
submission to the Department of Industry, Science, Energy and Resources, 28 May
2020.
[32]. Ibid.,
p. 1.
[33]. AlphaBeta
Advisors for Xero Small Business Insights, Paying
the price, Xero Small Business Insights, June 2019.
[34]. Dynamic
Business, ‘Shorter
payment times incoming with the Payment Times Reporting Bill’, Dynamic
Business website, 14 May 2020.
[35]. Institute
of Public Accountants, Payment
Times Reporting Bill 2020, media release, 28 May 2020.
[36]. Australian
Trucking Association, Payment
Times Bill to hold big business accountable, media release, 13 May
2020.
[37]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 4.
[38]. Ibid.
[39]. The
Statement of Compatibility with Human Rights can be found at pages 5–10 of the Explanatory
Memorandum to the Bills.
[40]. Under
section 19A of the Acts
Interpretation Act 1901 where a provision of an Act refers to ‘the
Secretary of the Department but does not identify the relevant Department—then
the reference is to the Secretary of the Department administered by the
Minister who administers that provision and may be ascertained by reference to
Administrative Arrangements Orders. In this case it will be the Department of
Education, Skills and Employment.
[41]. Payment
Times Reporting Bill, subclause 24(3).
[42]. Payment
Times Reporting Bill, clauses 25 and 26.
[43]. Payment
Times Reporting Bill, subclause 27(2).
[44]. Payment
Times Reporting Bill, subclause 27(3).
[45]. Payment
Times Reporting Bill, subclause 27(1).
[46]. Payment
Times Reporting Bill, subclause 27(4).
[47]. Payment
Times Reporting Bill, clause 5 provides that a reference to an enterprise
has the same meaning as in the A New Tax System
(Goods and Services Tax) Act 1999, where it is defined at section 9-20
as an activity or series of activities done in various forms including: as a
business; by a charity; by certain trustees; or by the Commonwealth, a state or
a territory, or by a body corporate, established for a public purpose by or
under a law of the Commonwealth, a state or a territory. The term
carrying on an enterprise includes doing anything in the course of the
commencement or termination of the enterprise.
[48]. Payment
Times Reporting Bill, clause 6.
[49]. Payment
Times Reporting Bill, paragraph 7(1)(b).
[50]. Payment
Times Reporting Bill, clause 5.
[51]. Payment
Times Reporting Bill, clause 5 provides that what constitutes small
business will be prescribed by the rules; a small business
invoice is a document, notifying an obligation to make a payment,
issued to an entity by a small business supplier to the entity.
[52]. Payment
Times Reporting Bill, paragraphs 14(1)(a)–(d).
[53]. Payment
Times Reporting Bill, paragraph 14(1)(e).
[54]. Payment
Times Reporting Bill, clause 5 for the definition of controlling
corporation; paragraph 14(1)(f).
[55]. Payment
Times Reporting Bill, paragraph 14(1)(g). Subclause 14(5)
requires that a responsible member of an entity or a responsible member of a
controlling corporation signs the payment times report. This can be done
electronically in accordance with the Electronic
Transactions Act 1999.
[56]. Payment
Times Reporting Bill, clause 5.
[57]. Payment
Times Reporting Bill, paragraph 14(1)(h). Subclause 14(4) sets
out the matters that are considered to be notifiable events.
[58]. Payment
Times Reporting Bill, paragraph 14(1)(i).
[59]. Payment
Times Reporting Bill, clause 5.
[60]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 5. Income Tax
Assessment Act 1997, section 328-110 defines a small business
entity.
[61]. Lynch
and Evans, ‘Labor
cautious as legislation dodges key issue of supply-chain financing’, op.
cit.; Chartered Accountants Australia and New Zealand (CAANZ) and CPA
Australia, Payment
Times Reporting Rules - exposure draft and consultation paper, op. cit.
[62]. Payment
Times Reporting Bill, subclause 13(2).
[63]. Payment
Times Reporting Bill, subclause 13(4).
[64]. Payment
Times Reporting Bill, clause 17.
[65]. Payment
Times Reporting Bill, clause 18.
[66]. Payment
Times Reporting Bill, subclause 20(1).
[67]. Payment
Times Reporting Bill, subclause 20(2).
[68]. Payment
Times Reporting Bill, subclause 20(3).
[69]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 22.
[70]. Payment
Times Reporting Bill, subclause 22(1).
[71]. Payment
Times Reporting Bill, subclause 37(3).
[72]. Payment
Times Reporting Bill, subclause 22(2).
[73]. Payment
Times Reporting Bill, subclause 7(3).
[74]. Payment
Times Reporting Bill, subclauses 7(5) and (6).
[75]. That
is, the entity no longer satisfies subparagraph 7(2)(b)(i) of the Reporting
Bill.
[76]. Payment
Times Reporting Bill, paragraph 7(7)(a). That is, the entity no longer
satisfies subparagraph 7(2)(b)(ii) of the Reporting Bill.
[77]. Payment
Times Reporting Bill, paragraph 7(7)(b). That is, the entity no longer
satisfies paragraph 7(2)(c) of the Reporting Bill.
[78]. Payment
Times Reporting Bill, paragraph 7(7)(c).
[79]. Payment
Times Reporting Bill, subclause 7(8).
[80]. Payment
Times Reporting Bill, subclause 7(4).
[81]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 14.
[82]. Attorney-General’s
Department (AGD), Guide to
framing Commonwealth offences, infringements notices and enforcement powers,
AGD, Canberra, September 2011.
[83]. Payment
Times Reporting Bill, subclause 33(1).
[84]. Payment
Times Reporting Bill, subclauses 37(1) and (2).
[85]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 35.
[86]. Payment
Times Reporting Bill, clause 15; paragraph 82(5)(a) of the Regulatory Powers
(Standard Provisions) Act 2014. These penalties are currently equivalent
to $12,600 and $63,000, respectively—see section 4AA of the Crimes Act 1914
. Note that the value of a penalty unit will be subject to indexation on 1 July
2020.
[87]. Section
93 of the Regulatory
Powers (Standard Provisions) Act 2014.
[88]. Payment
Times Reporting Bill, clause 16.
[89]. Currently
equal to $73,500—see section 4AA of the Crimes Act 1914.
Note that the value of a penalty unit will be subject to indexation on 1 July
2020.
[90]. Payment
Times Reporting Bill, subclause 29(1).
[91]. Currently
equal to $42,000—see section 4AA of the Crimes Act 1914.
Note that the value of a penalty unit will be subject to indexation on 1 July
2020.
[92]. Payment
Times Reporting Bill, subclauses 29(2) and (3).
[93]. Payment
Times Reporting Bill, subclause 30(1).
[94]. Payment
Times Reporting Bill, subclause 30(6).
[95]. Payment
Times Reporting Bill, subclause 30(7); paragraph 82(5)(a) of the Regulatory Powers
(Standard Provisions) Act 2014. These penalties are currently
equivalent to $12,600 and $63,000, respectively—see section 4AA of the Crimes Act 1914
. Note that the value of a penalty unit will be subject to indexation on 1 July
2020.
[96]. Payment
Times Reporting Bill, subclause 30(5).
[97]. Currently
equal to $42,000—see section 4AA of the Crimes Act 1914.
Note that the value of a penalty unit will be subject to indexation on 1 July
2020.
[98]. Payment
Times Reporting Bill, subclauses 30(8) and (9).
[99]. Payment
Times Reporting Bill, subclause 37(4).
[100]. Regulatory
Powers Act, subsection 103(2).
[101]. Payment
Times Reporting Bill, subclauses 36(1) and (2).
[102]. Payment
Times Reporting Bill, subclause 36(3).
[103]. Subsection
104(2) of the Regulatory
Powers (Standard Provisions) Act 2014.
[104]. Section
7 of the Regulatory
Powers (Standard Provisions) Act 2014.
[105]. Payment
Times Reporting Bill, subclause 37(5).
[106]. Subsection
18(2) of the Regulatory
Powers (Standard Provisions) Act 2014.
[107]. Payment
Times Reporting Bill, paragraph 31(3)(c).
[108]. Payment
Times Reporting Bill, subclauses 35(1) and (2).
[109]. Payment
Times Reporting Bill, subclause 35(3).
[110]. Regulatory
Powers Act, subsections 20(1) and (4).
[111]. Regulatory
Powers Act, subsection 21(2).
[112]. Regulatory
Powers Act, subsection 22(1).
[113]. Regulatory
Powers Act, section 24.
[114]. Regulatory
Powers Act, subsection 18(2).
[115]. Payment
Times Reporting Bill, clause 5 defines an issuing officer
as a magistrate; or a Judge of the Federal Court or the Federal Circuit Court.
[116]. Regulatory
Powers Act, section 32.
[117]. Payment
Times Reporting Bill, paragraph 31(3)(b).
[118]. Regulatory
Powers Act, section 37.
[119]. Regulatory
Powers Act, section 36.
[120]. Payment
Times Reporting Bill, subclause 37(6).
[121]. Regulatory
Powers Act, section 39 sets out the meaning of the term evidential
material.
[122]. Payment
Times Reporting Bill, paragraph 32(2)(c).
[123]. Payment
Times Reporting Bill, subclauses 35(1) and (2).
[124]. Payment
Times Reporting Bill, subclause 35(3).
[125]. Regulatory
Powers Act, subsections 50(1) and (4).
[126]. Regulatory
Powers Act, subsection 51(2).
[127]. Regulatory
Powers Act, section 52.
[128]. Regulatory
Powers Act, section 48.
[129]. Regulatory
Powers Act, section 70.
[130]. Payment
Times Reporting Bill, paragraph 32(2)(c).
[131]. Payment
Times Reporting Bill, clause 5.
[132]. Payment
Times Reporting Bill, clause 39.
[133]. Payment
Times Reporting Bill, clause 40.
[134]. Payment
Times Reporting Bill, clause 41.
[135]. Payment
Times Reporting Bill, clause 42. Clause 5 of the Reporting Bill
provides that enforcement body has the same meaning as in the Privacy Act 1988,
where it is defined to include the AFP, state and territory police forces,
state and territory anti-corruption commissioners, the Immigration Department,
APRA and ASIC (subsection 6(1) of the Privacy Act). An enforcement body
to which protected information is disclosed may use or disclose the information
for the purposes of conducting enforcement related activities,
defined at subsection 6(1) of the Privacy Act as: the prevention,
detection, investigation, prosecution or punishment of criminal offences or
breaches of a law imposing a penalty or sanction; the conduct of surveillance
activities, intelligence gathering activities or monitoring activities; the
conduct of protective or custodial activities; the enforcement of laws relating
to the confiscation of the proceeds of crime; the protection of the public
revenue; the prevention, detection, investigation or remedying of misconduct of
a serious nature; or the preparation for, or conduct of, proceedings before any
court or tribunal, or the implementation of court/tribunal orders.
[136]. Payment
Times Reporting Bill, clause 43.
[137]. Payment
Times Reporting Bill, subclause 44(1) and clause 45.
[138]. Payment
Times Reporting Bill, subclause 44(2).
[139]. Payment
Times Reporting Bill, subclause 46(1).
[140]. Section
13.3 of the Criminal
Code Act 1995.
[141]. Consequential
Amendments Bill, clause 2.
[142]. Payment
Times Reporting Bill, subclauses 52(2) and 52(3).
[143]. Payment
Times Reporting Bill, subclause 53(1).
[144]. Payment
Times Reporting Bill, subclause 53(2).
[145]. Payment
Times Reporting Bill, subclauses 53(3) and (6).
[146]. Payment
Times Reporting Bill, clause 54.
[147]. Explanatory
Memorandum, Payment Times Reporting Bill 2020 [and] Payment Times Reporting
(Consequential Amendments) Bill 2020, p. 42.
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