ADDITIONAL COMMENTS BY LIBERAL SENATORS

Overview

1.1        Liberal senators support the majority report and the objectives of the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011, and the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011 (the AUSTRAC package of bills).

1.2        Liberal senators recognise the importance of ensuring that AUSTRAC can continue to provide a regulatory environment that maintains community confidence in financial flows and minimises the risks to business of exploitation for money laundering or terrorism financing. The Coalition thus acknowledges the importance of introducing a supervisory levy to enable AUSTRAC to recover the costs of its supervisory activities.

Concerns

Possible over-collection – levy methodology

1.3        Liberal senators note the concerns raised by the Scrutiny of Bills Committee in their Alert Digest No. 5 of 2011. In that Digest, the Scrutiny Committee drew attention to the potential for AUSTRAC to over-collect its regulatory costs.[1] The potential for this to occur is of particular concern to the Liberal senators. Pending the advice of the Minister, the Coalition considers that this situation should be closely monitored. Liberal senators take the view that the current safeguard that has been proposed by the government of reviewing the calculation methodology after five years is inadequate; a five year review period is too long.

Recommendation 1

1.4        The Coalition recommends that the operation of the legislation and the levy calculation methodology be reviewed in two years or sooner, depending on industry feedback. Industry feedback should be sought on an ongoing basis following passage of the bills.

Recommendation 2

1.5        Given the unknown impact that the introduction of the levy will have on small and micro businesses, Liberal senators recommend that, in that initial review, the government investigate the impact of the legislation on these businesses and in particular, its effects on the costs to them of complying with regulation and red-tape.

Recommendation 3

1.6        Should the initial review suggest that the cost to small and micro businesses outweighs the benefits of regulation, Liberal senators recommend that consideration be given to amending the definition of small business that is to be used (of under five employees) to the definition of small business currently used by the Australian Bureau of Statistics (a business employing less than 20 employees).

Short lead time until implementation – inadequate consultation

1.7        Liberal senators note that the first year in which the levy will be collected is the 2011-12 financial year. Given that the bills are therefore due to commence on 1 July 2011, the Liberal senators are concerned that inadequate consultation and education has preceded the measure.

Recommendation 4

1.8        To address this shortcoming, the Coalition recommends that an urgent education, information and awareness campaign designed to advise those affected entities of their new obligations be rolled out immediately.

1.9        Liberal senators consider that an education, information and awareness campaign should be coupled with a six month moratorium on any late payment fees that would otherwise be payable as a result of passage of the Collection Bill. Such a moratorium would provide an appropriate transitional period during which entities can enrol and commence paying their levy bills. A moratorium of this nature will be of even more importance if passage of the bills is delayed and the legislation has retrospective application.

Recommendation 5

1.10      A moratorium on any late payment fees should be implemented for six months following passage of the legislation.

Recommendation 6

1.11      Liberal senators recommend that, subject to the consideration of the issues that have been raised here, as well as those within the majority report, the AUSTRAC package of bills is passed.

Senator Guy Barnett                         Senator Stephen Parry
Deputy Chair                                                                      

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