Chapter 2Key issues
2.1This chapter outlines the key issues considered by the Senate Economics Legislation Committee (the committee) at its 2023-24 Additional estimates hearings with the Treasury Portfolio and Industry Portfolio.
Treasury Portfolio, 14 February 2024
Department of the Treasury
2.2Dr Steven Kennedy PSM, Secretary of the Department of the Treasury (Treasury), provided an opening statement to the committee reflecting on the continuing ease of global inflation as well as the dwindling impacts of supply side shock. Dr Kennedy also touched on the effects that Australia has faced regarding natural disasters, specifically mentioning the pressures of cyclones, severe storms, floods and bushfires in Queensland, New South Wales and Victoria.
Macroeconomic Group and International and Foreign Investment Group
2.3Topics examined by the committee included:
The veracity of information presented by the RMIT ABC Fact Check (pp. 9–11)
Wages growth in comparison to inflation (pp. 12–13)
Secretary meetings with the Prime Minister as well as discussions through the cabinet process (pp. 14–15)
The drivers of house pricing within Australia with reference to negative gearing and capital gains tax (pp. 15–17)
Vehicle fuel efficiency standards (pp. 17–19)
Causes in relation to higher insurance premiums (p. 19)
The current youth unemployment rate with respect to historical data, post COVID-19 pandemic (pp. 21–22)
Competition policy regarding market share with particular focus on supermarket profit margins (pp. 22–23)
The Cost-of-living Relief Package (pp. 23–24)
Revision of the Stage 3 Tax Cuts (p. 24)
Mid-Year Economic and Fiscal Outlook (MYEFO) forecasting (pp. 25–26)
Information in relation to tradeable and non-tradeable inflation (pp. 26–27)
Natural disaster effects on insurance premiums in high-risk areas (pp. 28–29)
Impacts of the current immigration rate on the Australian economy, housing sector and labour workforce (pp.30–31)
Vacant foreign investment properties (pp. 31–32)
Discussions and data surrounding the Right to Disconnect legislation (pp. 33–34)
Small Business, Housing, Corporate and Law Group
2.4Topics examined by the committee included:
Tax incentives for major institutions and investment trusts to support the building of rental properties as well as information regarding the Help to Buy Scheme and Housing Australia Future Fund (HAFF) (p. 35–40)
Advertisement of temporary positions to manage Treasury communications campaigns (pp. 40–42)
FOI requests related to the ‘Cyber Wardens program’ (pp. 43–46)
The regulation of consulting and accounting firms with particular reference to the PricewaterhouseCoopers (PwC) response (pp. 46–47)
Expenditure related to the advertising of the Stage 3 Tax Cuts (pp. 49–50)
Fiscal Group
2.5Topics examined by the committee included:
The ‘New Vehicle Efficiency Standard’ (pp. 52–54)
The Commonwealth Grants Commission – Macquarie Point Stadium GST exemptions (pp. 54–57)
Breakdown of figures and measures pertaining to the Cost-of-living Relief Package (pp.59–63)
Net overseas migration compared to figures recorded pre-COVID-19 (pp. 63–65)
Costings surrounding the government’s eight per cent NDIS growth spending target (pp. 65–67)
Prime Minister and Cabinet’s (PM&C) COVID-19 Response inquiry – Independent panel composition (pp. 68–69)
GST infrastructure exemptions surrounding the 2032 Brisbane Olympic Games (p. 70)
Revenue Group; Australian Taxation Office (ATO); Tax Practitioners Board (TPB); Australian Charities and Not-for-profits Commission (ACNC)
2.6Topics examined by the committee included:
Discussions surrounding changes to negative gearing (pp. 73–76)
Treatment of the PwC matter within the ATO (pp. 76–78; pp. 80–82; pp. 87–91; pp. 93–96)
Deductable gift recipient (DGR) status of school building funds (pp. 78–80)
ATO advice provided to Treasury in relation to the implementation of the Stage 3 Tax Cuts (pp. 83–84)
Minerals and resources rent tax (MRRT) and the petroleum resource rent tax (PRRT) (pp. 84–86)
Provisions within the ‘Tax expenditures and insights statement’ (p. 91)
Information regarding the Higher Education Contribution Scheme (HECS) (pp. 96–99)
ATO costings in relation to prosecutions conducted by the Commonwealth Director of Public Prosecutions (CDPP) (pp. 101)
Governance standards – Compliance with Australian Laws and maintaining and enhancing public trust and confidence (pp. 104–105)
Markets Group
2.7Topics examined by the committee included:
Tax threshold application for members of schemes which have already defined benefits (pp. 106–107)
Managed Investment Scheme review (pp. 108)
Competition review taskforce (pp. 109–112)
Insurance premium data (pp. 112–113)
Development of competition policy surrounding the aviation industry (pp. 113–115)
The Linfox Armaguard Pty Ltd and Prosegur Australia Holding Pty Limited, Australian Competition and Consumer Commision (ACCC) merger (pp. 117–118)
Review of the ASIC Industry Funding Model (pp. 118–120)
Australian Prudential Regulation Authority (APRA)
2.8Topics examined by the committee included:
Expenditure compliance regarding superannuation funds (pp. 121–123)
Adjustment of terms regarding the repayment of the principal and interest component on interest-only loans (pp. 123–124)
Australian Competition and Consumer Commission
2.9Topics examined by the committee included:
Exemptions related to the ACCC mandatory code of conduct (pp. 126–129)
Information regarding the ACCC inquiry into pricing in the supermarket sector (pp. 129 – 130)
Competition regarding the major banking corporations (pp. 132–134)
Framework regarding competition in the renewable energy industry (p. 136)
Treasury Portfolio, 15 February 2024
Reserve Bank of Australia (RBA)
2.10Topics examined by the committee included:
The RBA’s engagement in the development of the Stage 3 Tax Cuts (pp. 6–8)
Current household disposable income (pp. 8–9)
RBA engagement with the RBA review panel (pp. 10–11)
The use of inflation as a price increasing mechanism in sectors with limited competition (pp. 11–12)
Overview of global economic resilience and the forecasting of potential future impacts on Australia (pp. 12–13)
Forward guidance in relation to interest rate movements (pp. 13–15)
Inflationary impact of the Stage 3 Tax Cuts and Cost-of-living Relief Package (pp. 15–17)
Australian productivity performance (pp. 17–18)
Australia’s gold reserve held by the Bank of England (pp. 18–19)
Rental CPI (pp. 19–20)
Australian Financial Complaints Authority (AFCA)
2.11Topics examined by the committee included:
Matters related to Dixon Advisory (p. 22)
Complaints in relation to superannuation funds with reference to total and permanent disability and death payments (p. 22–24)
Australian Securities and Investments Commission (ASIC)
2.12Topics examined by the committee included:
Internal conduct within ASIC (pp. 25–27)
ASIC’s regulatory oversight of the Big Four accounting firms (pp. 27–28)
ASIC oversight and regulation with reference to legal partnerships (pp. 28–32)
Regulation of cryptocurrency companies (pp. 33–35)
Investigations in relation to Gold Corporation (trading as Perth Mint) (pp. 36–38)
The mandatory Banking Code of Practice (pp. 38–39)
Industry Portfolio, 15 February 2024
Department of Industry, Science and Resources
2.13Secretary of the Department of Industry, Science and Resources (Industry), Ms Meghan Quinn PSM, appeared before the committee along with officials for the examination of the Industry Portfolio.
Corporate, Enabling and Business Services
2.14Topics examined by the committee included:
Appointments to the Rail Industry Innovation Council (pp. 45–49; pp. 52–57; pp. 60–63)
Conflicts of interest regarding consultancy procurement contracts (pp. 49–52)
The Business Grants Hub with reference to the Environmental Defenders Office (EDO) (pp. 57–60; pp. 63–65)
Recruitment of the National Reconstruction Fund Corporation (NRFC) Board (pp. 66–73)
Outcome 1 – Program 1.3
2.15Topics examined by the committee included:
MMRT and PRRT (pp. 73–74)
The fuel tax credit scheme (p. 74)
Information regarding critical and strategic minerals (pp. 75–76)
Consultation regarding the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Safety and Other Measures) Bill 2024 (pp. 76–80; pp. 83–85)
Supply chain studies related to minerals (pp. 80–81)
The Australian nickel industry (pp. 81–83; pp. 89–91)
Development and consultation for the Future Gas Strategy (pp. 85–88)
The Critical Minerals Strategy (pp. 91–93)
Outcome 1 – Program 1.3 (including the Australian Nuclear Science and Technology Organisation)
2.16Topics examined by the committee included:
Discussions surrounding the National Radioactive Waste Management Facility (pp. 93–101)
Current radioactive waste inventory in Australia (pp. 101–102)
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)
2.17Topic examined by the committee included:
Information regarding NOPSEMA’s Decommissioning compliance strategy 2024–2029 (pp. 102–103)
Applications for sea dumping permits (pp. 103–104)
Carbon capture storage (pp. 104–106)
Approval of environmental plans (pp. 106–107; p. 110)
Consultants engaged by the EDO and associated conduct (p. 108)
Nature-positive legislation (p. 109)
Outcome 1 – Program 1.1
2.18Topics examined by the committee included:
Briefings regarding the appointment of the Rail Industry Innovation Council (pp. 111–113)
Decision making process behind the appointment of the NRFC Board (pp. 113–116)
Industry Growth Program (p. 117)
Applications received by the NRFC (pp. 118–121)
National Reconstruction Fund Corporation
2.19Topics examined by the committee included:
Information regarding the NRFC website (pp. 122–124)
The appointment of the NRFC board (pp. 124–125)
Outcome 1 – Program 1.2
2.20Topics examined by the committee included:
Quantum computing in Australia (pp. 126–128)
The Research and Development Tax Incentive (pp. 128–129)
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
2.21Topics discussed by the committee included:
The GenCost report (pp. 129–130)
Coal and fuel price forecasting (pp. 130–131)
The Research Vessel Investigator with reference to great white shark research (pp. 132–133)
Senator Jess Walsh
Chair
Labor Senator for Victoria