2.1
This chapter outlines the key issues considered by the Senate Economics Legislation Committee (the committee) at its 2022–23 Budget estimates hearings with the Treasury Portfolio and Industry, Science, Energy and Resources Portfolio (Industry Portfolio).
Treasury Portfolio, 1 April 2022
Department of the Treasury
Corporate Group, Macroeconomic Group
2.2
The Secretary of the Department of the Treasury (Treasury), Dr Steven Kennedy PSM, made an opening statement, outlining the current global events impacting the Australian economy, and highlighted the anticipated future strong economic growth and low unemployment rates.
2.3
Topics examined by the committee included:
Home guarantee scheme (pp. 10–13)
Price gouging—impact on regional Australia (p. 19)
Productivity Commission reporting—evidence in relation to economic conditions for the Commission to make independent assessment of determinations regarding wages (pp. 16–19)
Coal pricing and elevated tax revenue (pp. 8, 30, 44–47)
Australia's stronger than anticipated economic performance, including impacts of pandemic and recovery (pp. 3–19, 29–39, 41):
Australia's AAA credit rating and strong fiscal sustainability (p. 17)
Impact of commodity prices on deficit reduction (pp. 5–8, 18, 30, 40–41, 45)
Alleged price gouging by private ports and the Productivity Commission's review of ports (pp. 16, 19)
Net overseas migration (p. 24)
Disaster recovery measures and funding (pp. 25, 29)
Advertising campaigns (e.g. in relation to budget, economic plan campaign) (pp. 25–28)
Fiscal Group
2.4
Topics examined by the committee included:
Disaster recovery funding and associated measures (p. 25, 29)
Economic growth, household income, goods and services tax (GST), tax receipts and government revenue and cash balances (pp. 29–32, 39)
Paid parental leave measure (pp. 31–33)
Department of Veterans Affairs (DVA) claims processing measure ($164.6 million over two years from 2021–22 for DVA’s operations and to support claims processing) (pp. 34–36)
Regional Accelerator Program and regional investment package (including infrastructure, Northern Australia Infrastructure Facility) implementation (pp. 36–37)
Investment across regional Australia (pp. 31, 36–37)
Assessing impacts of infrastructure effectiveness and investment returns (pp. 36–38)
Gender pay gap (pp. 33, 38–39)
Revenue Group
2.5
Topics examined by the committee included:
Organisation for Economic Co-operation and Development (OECD) Pillar 1 and 2 reforms implementation and anticipated impacts, including changes to corporate tax rates (pp. 41–44, 46–48)
Gas pricing and carry forward Petroleum Resource Rent Tax (PRRT) receipts and revenue (pp. 44–45)
Information and Communications Technology (ICT) investments by business budget measure (pp. 48–49, 51–52)
Skills and training budget measure (pp. 48–49, 51)
Visa rules – agricultural workers visa scheme (pp. 50–51)
Tax integrity measure (p. 50)
Markets Group
2.6
Topics examined by the committee included:
Treasury communication to the Australian Prudential Regulation Authority (APRA)—superannuation products and comparison (pp. 52–54)
Industry Portfolio, 1 April 2022
Department of Industry, Science, Energy and Resources
Cross portfolio/ corporate; Programs 1.1, 1.2 and 1.3
2.7
The Secretary of the Department of Industry, Science, Energy and Resources (DISER), Mr David Fredericks PSM did not make a formal opening statement. (p. 58)
2.8
Topics examined by the committee included:
Manufacturing of Rapid Antigen Tests (RAT tests) in Australia & importation from Australian sponsors (pp. 59, 62–64)
Medical product manufacturing in general (p. 59)
Manufacturing employment figures (p. 71)
Funding for the Modern Manufacturing Strategy (MMS) (pp. 59, 61, 64–65, 70, 73–75)
Critical minerals and major projects (pp. 76–79)
Treasury Portfolio, 6 April 2022
Department of the Treasury
Corporate and Macroeconomic Group
2.9
Topics examined by the committee included:
Advertising campaigns (pp. 5–6)
Recent appointments and personal qualifications, and appointment processes (including Productivity Commission (PC), Representative to the OECD) (pp. 13, 31, 33)
Additional budget spending ($39.3 billion, Budget Papers 1, p. 73) and potential fiscal impacts including on inflation and interest rates and nature of advice provided to the Government (p. 6)
Wage increases and labour market, including on the Annual Wage Review 2021–22 before the Fair Work Commission and related advice provided to the Government (pp. 7–15, 66–67)
Government support for wage increases (pp. 9–12)
Inflation pressures compared with international jurisdictions, including the United States of America (USA) and across the OECD, and various measures of inflation (e.g. Wage Price Index (WPI), average earning on national accounts basis)
(pp. 12–14, 18)
Longer term impacts of the 2022–23 budget, and discussion of some measures designed to promote economic growth (p. 14)
Wage growth and labour availability in regional Australia (pp. 13, 67–71)
Fiscal and Revenue Group
2.10
Topics examined by the committee included:
The missing major initiatives table from the budget overview 'the glossy' (p. 19)
Content and design of 'the glossies' (i.e. use of graphs, infographics, tables, etc)(pp. 19–20, 22)
The budget measure concerning the Pharmaceutical Benefits Scheme (p. 21)
Australian Taxation Office (ATO)
2.11
Topics examined by the committee included:
Input provided by the ATO to the Board of Tax regarding digital asset taxation issues (p. 23)
Income Tax Assessment Act 1936 section 100A provisions relating to the taxation of trust distributions (pp. 23–25)
Child support clients referred by Services Australia to the ATO for
follow-up regarding non-lodgement of tax returns (~230,000 clients referred by Services Australia in 2021) (pp. 25–28)
The percentage of Australians (~40%) not up to date with lodgement of their tax returns (pp. 25–26)
Digital gains tax offset (pp. 28–30)
Tax Avoidance Taskforce (pp. 30–32)
The role of the taskforce in relation to Pillar 1 and 2 reforms(pp. 31, 33)
ATO resourcing requirements review (pp. 31–33)
Small and medium business tax reform (p. 39)
Australian Charities and Not-for-profits Commission (ACNC)
2.12
Topics examined by the committee included:
Registration of charity status and factors considered, particularly in relation to involvement in political issues or parties (e.g. New South Wales Returned and Services League of Australia, Smart Energy Council, Howarth Foundation) (pp. 35–36)
Allegations relating to misconduct of Royal Society for the Prevention of Cruelty to Animals (RSPCA) inspectorate staff and potential actions of the ACNC in relation to risk assessment and potential enforcement (pp. 37–38)
Deductible Gift Recipient (DGR) charity status determinations (pp. 33–35, 41–43)
Charities Act 2013 Section 11—conduct of organisations in accordance with the requirements (pp. 34–36)
Cases where charity status has been revoked (pp. 35–36)
Markets Group
2.13
Topics examined by the committee included:
Regulation of fiscal gold and silver bullion and management of bullion as a physical commodity or holding (pp. 44–45)
Development of draft legislation for the Compensation Scheme of Last Resort (CSLR), including the scope and various options for the scheme
(pp. 45–50)
Aboriginal community benefit fund (Youpla Group) – operations and liquidation (pp. 49–51)
Australian Securities and Investments Commission's (ASIC) financial advisers register, including registrations, qualifications of those on the register, and impacts on costs of financial advice (pp. 51–52)
Australian Securities and Investments Commission (ASIC)
2.14
The Chair, Mr Joe Longo, made an opening statement, thanking Commissioner Cathie Armour for her work with ASIC over the last nine years, ahead of her departure. Mr Longo also focused on ASIC's digital transformation regulation and climate-related regulation enforcement.
2.15
The committee thanked Commissioner Cathie Armour for her years of contribution to the committee and the Senate.
2.16
Topics examined by the committee included:
Cryptocurrency and digital assets (p. 53)
Insolvency and safe harbour provisions, including debt restructuring reforms, enforcement actions, ASICs response to independent review
(pp. 53–54)
Access to, cost and quality of advice Joint Corporations Committee Inquiry ASIC QoN 012 (25/07/2020)—review and release of information publicly—engagement of expert consultants for the provision of advice in this area (pp. 52, 54)
Choice dashboards—commencement of work and start date (pp. 54–55)
Relationship with ATO and other agencies regarding unpaid superannuation and wage entitlements (pp. 55–56)
Assurance over Australian Stock Exchange (ASX) Chess system replacement project (as per ASX Announcement 28 March 2022) (p. 59)
Enforcement action taken on allegations of misconduct and performance of ASIC, with reference to litigation and enforcement actions (p. 57)
Consideration of bullion as a financial product (pp. 58–59)
Australian Competition and Consumer Commission (ACCC)
2.17
Topics examined by the committee included:
Action in relation to marketplace disruption (pp. 60–61)
Scam watch – crypto currency payments & investment schemes (pp. 61–62)
Targeting greenwashing (p. 62)
Role of ASIC chair for prosecuting a particular case for law reform or consideration of arguments of other cases to take a more objective stance to provide a more objective view (pp. 62–63)
Australia and New Zealand Banking Group Limited (ANZ) criminal cartel case criminal prosecution (pp. 61–63)
Monitoring of petrol prices (pp. 64, 66)
Reserve Bank of Australia (RBA)
2.18
Topics examined by the committee included:
Data on inflation – global supply problems – wage growth (pp. 66–71)
Petrol price announcement—2022–23 Budget measures (p. 64)
Low wage growth – public service agreements and caps (pp. 67, 71)
Interest rate rises (pp. 66–68)
Gold bar audit in London (pp. 68–69)
Quantity of money printed since 1 July 2019 to now (p. 69)
Current inflation rate – headline and underline inflation rates (pp. 69–71)
Australian Prudential Regulation Authority (APRA)
2.19
The Chair of APRA, Mr Wayne Byres, made an opening statement with a focus on preparedness by the financial sector for new and emerging financial risks.
2.20
Topics examined by the committee included:
Data on superannuation products / Super rating (pp. 72–73)
Best financial interest duty (pp. 74–77)
National Australia Bank—transition to cashless branches and services
(p. 77)
Bank branch closures (pp. 78–80)
Super funds and divesting from Russian assets (pp. 80–82)
Industry Portfolio, 7 April 2022
Department of Industry, Science, Energy and Resources
Program 1.1 and 1.2
2.21
Topics examined by the committee included:
Modern manufacturing and related grants, consultation, implementation, and consideration of longer-term investment by and partnerships with government, examples of successfully funded projects (pp. 4–8, 10)
Policy goals – competition based on value not price (p. 7)
Budget – increased investment in science and innovation (pp. 8–9)
Shortages of diesel additive AdBlue shortage (regional) – work undertaken by the government to secure additional supplies (p. 9, 13)
Benefits of modern manufacturing—medical benefits (p. 10)
Space launch, including Space Strategic update, abolition of space launch application fees, fast tracking access to space measure and infrastructure, competitive regulations, and internal restructure, hypersonic, work with Defence Space Command and impacts on local manufacturing and commercialisation (p. 10)
National electric vehicle strategy (p. 13)
Budget—reduction in the cost of launch permits—current funding arrangements (pp. 11–12)
Hydro sonic weapons program development—intersection with Australian Space Agency (ASA) research programs (p. 12)
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
2.22
The Chief Executive, Dr Larry Marshall, made an opening statement emphasising the beneficial impacts several new ventures will have on CSIRO's ability to support Australians from in both an environmental and commercial aspect.
2.23
Topics examined by the committee included:
Mission to reduce plastic waste (p. 13)
Increasing agri-food exports (p. 13)
Launch of national research lab—stimulation of bush fires to mitigate and plan for disasters in the future and building resilience (p. 13)
National space mission—partnership with ASA, Bureau of Meteorology (BoM) and Defence—building of new satellites in the country (p. 14)
Bio-lab capability in Australia (p. 14)
Climate change modelling and auditing, and climate mitigation strategies to reduce carbon emissions, impacts of radiation (pp. 14–15)
Basis of current climate, agriculture and energy policies, development, and subsidies (pp. 15–16, 19)
Radiation and carbon emissions
Net Zero emissions policy—advice regarding policy and procedures (pp. 15–17, 25)
Electricity prices (pp. 17, 19)
State of the climate report (p. 17)
Variable renewable energy source funding (pp. 18, 32)
Wind and solar subsidies (pp. 18–19)
Virtual critical minerals research and development centre and CSIRO’s role (pp. 18–31)
Flood monitoring work – engagement with the investment with the Government ((p. 22)
Selection and appointment of board members, role of the board (pp. 21–22)
Water Lens project (pp. 21–22)
Program 1.3
2.24
Topics examined by the committee included:
Liquified Natural Gas (LNG) and carbon capture and storage (CCS) in Darwin (renewable / clean energy hub) (pp. 23–25)
Energy security and regional development plan (pp. 23–24, 32)
Northern Endeavour litigation update and potential for liability for the public (p. 32)
National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA)
2.25
Topics examined by the committee included:
Approval of Barossa field drilling environmental plan and consultation conducted with First Nations people (pp. 25, 32)
Approvals process for the facilitation of drilling – requirements and consent from traditional owners (pp. 26–27)
Environmental regulations – off-shore gas and petroleum regime (pp. 25, 32)
$1.5 million dollars for infrastructure in the Pilbara region projects
(pp. 33–34)
Update on the Northern Endeavour litigation (pp. 33–35)
Laminaria-Corallina field potential approach from Timorese (p. 33)
Senator Paul Scarr
Chair
Liberal Senator for Queensland