Scrutiny of Bills Alert Digest No. 16 of 1999


Scrutiny of Bills Alert Digest No. 16 of 1999

Senate Standing Committee for The Scrutiny of Bills

13 October 1999

ISSN 1329-668X

Members of the Committee

Senator B Cooney (Chairman)

Senator W Crane (Deputy Chairman)

Senator T Crossin

Senator J Ferris

Senator B Mason

Senator A Murray

Terms of Reference

Extract from Standing Order 24

(1) (a) At the commencement of each parliament, a Standing Committee for the Scrutiny of Bills shall be appointed to report, in respect of the clauses of bills introduced into the Senate, and in respect of Acts of the Parliament, whether such bills or Acts, by express words or otherwise:

(i) trespass unduly on personal rights and liberties;

(ii) make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers;

(iii) make rights, liberties or obligations unduly dependent upon non-reviewable decisions;

(iv) inappropriately delegate legislative powers; or

(v) insufficiently subject the exercise of legislative power to parliamentary scrutiny.

(b) The committee, for the purpose of reporting upon the clauses of a bill when the bill has been introduced into the Senate, may consider any proposed law or other document or information available to it, notwithstanding that such proposed law, document or information has not been presented to the Senate.

TABLE OF CONTENTS

A New Tax System (Indirect Tax and Consequential Amendments) Bill 1999
Australian Federal Police Legislation Amendment Bill 1999
Crimes at Sea Bill 1999
Electoral Amendment (Optional Preferential Voting) Bill 1999

A New Tax System (Indirect Tax and Consequential Amendments) Bill 1999

This bill was introduced into the House of Representatives on 30 September 1999 by the Minister for Financial Services and Regulation. [Portfolio responsibility: Treasury]

The bill proposes to amend the following Acts:

A New Tax System (Goods and Services Tax) Act 1999, the A New Tax System (Luxury Car Tax) Act 1999 and the A New Tax System (Wine Equalisation Tax) Act 1999 to:

  • ensure that exports are GST-free when ownership of goods passes to an overseas purchaser, who is not registered or required to be registered, before the goods are removed from Australia;
  • provide special rules to reduce compliance costs for retailers who sell both taxable and GST-free goods;
  • confine the GST-free treatment of cow's milk to processed cow's milk;
  • increase the 50 per cent market value and cost of supply tests for the non-commercial supplies of charities to 75 per cent for supplies of supported accommodation/community housing;
  • double the existing cash accounting threshold to $1 million, and allow the Commissioner of Taxation to make a cash accounting threshold determination for a class of entities so as to reduce the need for entities to apply individually;
  • ensure that a return of a luxury car for repair purposes is not an adjustment event;
  • align the grouping and joint venture provisions for the luxury car tax (LCT) and wine equalisation tax (WET) with the GST;
  • clarify the rules regarding liability for LCT on taxable importations;
  • correct minor technical issues to LCT value;
  • provide greater certainty as to the types of products covered by WET;
  • ensure that private importations of wine are subject to WET; and
  • remove wine tax credit related to intended export sales and clarify credit for sales to overseas travellers;

Customs Act 1901 to:

  • allow Customs to remove from the COMPILE computer system an import entry that has been lodged, but not acted upon, where the entry covers goods that attract any duty, fee, charge or tax;
  • ensure that regulations will allow a security or an undertaking to be given in relation to goods that are imported on a temporary basis, and which would otherwise be subject to GST or LCT;
  • ensure that an import entry is deemed to have been withdrawn if, in relation to the goods covered by the import entry, a fee, charge or tax that is payable remains unpaid; and
  • make consequential amendments;

Income Tax Assessment Act 1997 to:

  • exclude GST from income derived and, to the extent of an entity's input tax credit entitlement, from deductible amounts;
  • exclude GST from amounts taken into account in calculating assessable income or deductions, such as disposal proceeds and cost-base elements for capital gains tax purposes; and
  • change certain terms used in income tax provisions to ensure consistency of meaning with the GST law;

Trade Practices Act 1974 to bring forward the date of effect of the Australian Competition and Consumer Commissioner's (ACCC) enforcement powers so that the ACCC can exercise those powers immediately with respect to unreasonable price rises made before the GST is introduced;

A New Tax System (Indirect Tax Administration) Act 1999 to:

  • remove decisions about registration for wine tax from the list of reviewable wine tax decisions under the WET;
  • provide that each decision under the WET disallowing the whole or part of a claim for wine tax credit is a reviewable wine tax decision; and
  • correct references to GST groups and joint ventures in the table of reviewable GST decisions;

Taxation Administration Act 1953 to allow information relating to alcoholic beverages to be provided to a State or Territory officer for the purpose of any rebate, refund or other credit arrangement provided by a State or Territory in respect of alcoholic beverages;

A New Tax System (Goods and Services Tax Transition) Act 1999 and the A New Tax System (Wine Equalisation Tax and Luxury Car Tax Transition) Act 1999 to:

  • ensure that certain rights associated with warranties, software and options to purchase under hire-purchase agreements are not subject to GST where they relate to payments made prior to 1 July 2000;
  • ensure that the grouping provisions cannot be used to circumvent the phasing in of credits for motor vehicles; and
  • provide a concession for vehicles purchased before 2 December 1998 and used in operating leases;

Sales Tax Assessment Act 1992 and the Sales Tax (Exemptions and Classifications) Act 1992 to enable goods imported into Australia under the Tradex scheme to be entered free of WST, GST and WET; and

makes consequential amendments to seven Acts.

Drafting correction

Schedule 5, items 1 and 4

Item 1 of Schedule 5 to this bill proposes to repeal item 66 of Schedule 1 to the A New Tax System (Indirect Tax Administration) Act 1999. The repealed item provided for review of a number of decisions under the A New Tax System (Wine Equalisation Tax) Act 1999. Some of these decisions referred to events which did not occur under the Wine Equalisation Tax Act.

Item 4 of Schedule 5 to this bill inserts a substitute provision in the Taxation Administration Act 1953 to clarify which decisions are “reviewable wine tax decisions”.

The Committee notes that this matter was dealt with in its Eighth Report of 1999, and that these proposed amendments give effect to the undertakings foreshadowed by the Minister in his correspondence as set out in that report.

In these circumstances, the Committee makes no further comment on these provisions, and thanks the Minister for introducing the amendments.

Australian Federal Police Legislation Amendment Bill 1999

This bill was introduced into the House of Representatives on 30 September 1999 by the Attorney-General. [Portfolio responsibility: Justice and Customs]

The bill proposes to amend the Australian Federal Police Act 1979 to:

  • abolish the rank based structure of the Australian Federal Police;
  • abolish the statutory fixed term appointment regime;
  • clarify the Commissioner's command powers as head of a disciplined force; and
  • empower the Commissioner to amend or revoke a determination in relation to the Australian Federal Police Adjustment Scheme; and

makes consequential amendments to 24 other Acts.

Non-disallowable instruments

Proposed new section 38

Item 46 of Schedule 1 to this bill proposes to insert a new Part IV in the Australian Federal Police Act 1979. This new Part deals with the command powers of the Commissioner and related matters.

Proposed new Part IV includes a new section 38. This authorises the Commissioner to issue written orders with respect to the general administration of, and the control of the operations of, the Australian Federal Police (AFP). Some of these orders would seem to be legislative in character – even though they are to operate only in relation to members of the AFP – but no provision has been made in this bill to make such orders disallowable. The Committee therefore, seeks the Minister's advice as to why section 38 orders that are legislative in character should not be scrutinised by the Parliament.

Pending the Minister's advice, the Committee draws Senators' attention to this provision, as it may be considered to insufficiently subject the exercise of legislative power to parliamentary scrutiny, in breach of principle 1(a)(v) of the Committee's terms of reference.

Abrogation of the privilege against self-incrimination

Proposed new subsections 40A(1), 40L(5), 40M(3) and 40N(5)

As noted above, Item 46 of Schedule 1 to this bill proposes to insert a new Part IV in the Australian Federal Police Act 1979, dealing with the command powers of the AFP Commissioner. The Explanatory Memorandum states that the bill clarifies the Commissioner's command powers as confirmed by the Federal Court in Anderson v Sullivan (1997) 148 ALR 633, and specifically retains those command powers to the exclusion of the Workplace Relations Act.

The new Part IV includes proposed subsections 40A(1), 40L(5), 40M(3) and 40N(5). Each of these provisions abrogates the privilege against self-incrimination for employees and special members of the Australian Federal Police in certain circumstances. These circumstances include giving information, answering questions and producing documents; providing information about the employee's financial affairs; and undergoing drug testing.

Provisions which abrogate the privilege against self-incrimination are usually a matter of concern to the Committee and, to some extent, this issue is recognised in the bill. Proposed new subsections 40A(2) and 40L(6), and new section 40Q, limit the circumstances in which information obtained under compulsion may be used in evidence. For example, the results of drug and alcohol tests may be admitted as evidence against an AFP employee or special member only in legal proceedings relating to discipline and probity, or by the Commonwealth as a shield in worker's compensation proceedings. Information obtained by compulsion under other provisions may only be used in disciplinary proceedings.

In one sense these provisions may be seen as simply forming part of the conditions of employment of employees and special members of the Australian Federal Police. They do not apply to members of the public generally, and represent an attempt to reconcile the competing interests of obtaining information and protecting individual rights.

However, in another sense, the provisions may be seen as creating a system of control which differs markedly from that which applies to other public servants, or to employees generally, or to members of the public. It seems that information and testing may be compelled whether or not there is a reasonable suspicion of misconduct (unlike the guidelines considered in Anderson's case, which was itself concerned with compulsory drug testing rather than compelling officers to provide personal financial information).

Secondly, it seems that any AFP employee may be ordered to provide information, not only officers engaged in active operations. Finally, it is unclear what protections are available to AFP employees who consider that these powers may have been misused, or used inappropriately, by a future Commissioner.

The Committee is conscious of the need to ensure that the highest standards of probity and conduct apply throughout the AFP. Nevertheless the Committee is also conscious of the need not to trespass unduly on the right and liberties of AFP employees. The Committee therefore, seeks the Minister's advice on the following matters:

  • whether persons should be compelled to incriminate themselves in circumstances where there is no reasonable suspicion of misconduct;
  • why the provisions are expressed to apply to any AFP employee, and are not restricted to AFP officers engaged in active operations;
  • whether any protections are available to ensure that these powers may not be misused; and
  • on what basis the rights to which general members of the public are entitled can be properly restricted in respect of those who are also members of the AFP.

Pending the Minister's advice, the Committee draws Senators' attention to these provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

No reasons for dismissal

Schedule 2, item 1

Item 1 of Schedule 2 to this bill amends the Administrative Decisions (Judicial Review) Act 1977. The effect of this amendment is that, should the AFP Commissioner exercise his or her power to dismiss an employee under new section 28 of the Australian Federal Police Act 1979, the Commissioner is not required to give reasons for that dismissal.

As a matter of principle, providing reasons where the employment of an employee is terminated is an issue of natural justice for the person dismissed, and deters capricious action by the person terminating that employment.

Proposed new section 28 concludes with a note that the Workplace Relations Act 1996 has rules which apply to the termination of employment. However, proposed new section 69B of the Australian Federal Police Act 1979 (to be inserted by this bill) states that the operation of the Workplace Relations Act is to be limited in certain circumstances, including in relation to the termination of employment of AFP employees.

There seems to be a lack of clarity in the rules governing dismissed AFP employees and their entitlement to be told why they are being dismissed. There would also seem to be no provisions which prevent proposed section 28 from being used capriciously to terminate the employment of an otherwise efficient and effective AFP employee. The Committee, therefore, seeks the Minister's advice as to the current rights of AFP employees to receive reasons for their dismissal, and to seek a review of such a decision, and how the proposed amendments will affect those rights.

Pending the Minister's advice, the Committee draws Senators' attention to this provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

Crimes at Sea Bill 1999

This bill was introduced into the House of Representatives on 30 September 1999 by the Attorney-General. [Portfolio responsibility: Justice and Customs]

The bill proposes to implement a new national, uniform, cooperative scheme to apply Australian criminal law offshore. Under the new scheme:

  • the States and Northern Territory will enact uniform Crimes at Sea Acts applying local criminal laws to their respective offshore adjacent areas from the coastal baseline out to 12 nautical miles;
  • the criminal law of each jurisdiction applies to respective offshore adjacent areas from 12 to 20 nautical miles (or the outer limit of the continental shelf, which is the greater);
  • criminal laws of the Jervis Bay Territory will apply to criminal conduct beyond the area covered, on Australian ships, and in some cases, foreign ships; and
  • criminal laws of the Northern Territory will apply to criminal conduct connected with the exploration and exploitation of petroleum resources in Area A of the Zone of Cooperation.

Commencement

Subclause 2(3)

Subclause 2(2) of this bill states that, subject to subclause 2(3), its substantive provisions are to commence on Proclamation. However, subclause 2(3) states that, in any event, these provisions must commence 12 months after Royal Assent.

While the Committee generally prefers that provisions commence within 6 months after Royal Assent, the Explanatory Memorandum states that this bill is part of a cooperative scheme between the Commonwealth and the States and Territories, and cannot commence until the States and Territories have passed complementary legislation. This is one of the circumstances in which a longer commencement period is appropriate.

In these circumstances, the Committee makes no further comment on this provision.

Electoral Amendment (Optional Preferential Voting) Bill 1999

This bill was introduced into the Senate on 29 September 1999 by Senator Harris as a Private Senator's bill.

The bill proposes to amend the Commonwealth Electoral Act 1918 to provide that optional preferential voting is the method for choosing members of the House of Representatives.

The Committee has no comment on this bill.