Bills Digest No. 46,
2017–18
PDF version [462KB]
Phillip Hawkins
Economics Section
Anna Dunkley and Dr Hazel Ferguson
Social Policy Section
24
October 2017
Contents
Glossary
Table 1: abbreviations and acronyms
Purpose of the Bills
Structure of the Bills
Background
National Disability Insurance Scheme
Funding the National Disability
Insurance Scheme
Initial intentions
Current arrangements
National Disability Insurance Scheme
Savings Fund Special Account
Costs and ‘fully-funding’ the NDIS
Chart 1: Commonwealth’s NDIS
contribution and funding sources
Hypothecation of taxation
Committee consideration
Senate Standing Committee on
Economics
Disability, carer and community
organisations views on the Bill
Senate Standing Committee for the
Scrutiny of Bills
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Medicare Levy Amendment Bill
Background—Medicare levy
Opposition/minor party views on
increasing the Medicare levy
Financial implications
Commencement
Key provisions
Other Taxation Bills
Commencement
Key provisions
FBT Bill
Income Tax Rates Amendment Bill
Excess Non-Concessional Contributions
Tax Bill
Excess Untaxed Roll-Over Amounts Tax
Bill
TFN Withholding Tax (ESS) Bill
Family Trust Distribution Bill
Trustee Beneficiary Non-Disclosure
(No. 1) Bill
Trustee Beneficiary Non-Disclosure
(No. 2) Bill
Untainting Tax Bill
Nation-building Funds Repeal Bill
Background—the Funds
Building Australia Fund
Education Investment Fund
Policy position of non-government
parties/independents
Opposition/minor party views on the
abolition of the EIF
Position of major interest groups
Higher Education stakeholder views on
the EIF
Financial implications
Commencement
Key provisions
Appendix A: Education Investment Fund
rounds
Date introduced: 17
August 2017
House: House of
Representatives
Portfolio: Treasury
Commencement: Various
dates as set out in this Bills Digest.
Links: The links to the
principal Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website. Links to the other Bills in this package are provided
in the body of this Digest.
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 October 2017.
Glossary
Table 1: abbreviations
and acronyms
Purpose of
the Bills
This Bills Digest refers to 11 Bills which make up a suite
of Bills designed to assist in the funding of the National Disability Insurance
Scheme (NDIS).
The principal Bill is the Medicare Levy Amendment
(National Disability Insurance Scheme Funding) Bill 2017 (the Medicare Levy Amendment
Bill) which amends the Medicare Levy Act
1986 to increase the Medicare levy from 2 per cent to 2.5 per cent.
There are nine related Bills (the Other Taxation
Bills) which amend statutes which provide for tax rates that are linked to the
rate of the Medicare levy or the highest marginal personal income tax rate
inclusive of the Medicare levy. The Other Taxation Bills are:
The Nation-Building
Funds Repeal (National Disability Insurance Scheme Funding) Bill 2017 (the NBF
Repeal Bill) contains an additional measure—the repeal of the Nation-Building Funds
Act 2008 (the NBF Act). The purpose of the NBF Repeal Bill is to
abolish the Building Australia Fund (BAF) and the Education Investment Fund
(EIF). The Government has stated that the uncommitted balances of these funds ‘will
be credited to the National Disability Insurance Scheme Savings Fund Special
Account when it is established’.[1]
It is important to note that while the Government states
that these Bills are linked to the funding of the NDIS, the Bills do not
establish a funding mechanism for the NDIS. The National Disability Insurance
Scheme Savings Fund Special Account (the NDIS special account) which is to be
established by the National
Disability Insurance Scheme Savings Fund Special Account Bill 2016 (the NDIS Special Account Bill) is intended for that
purpose. However, the NDIS Special Account Bill has yet to be passed by the
Parliament.[2]
Structure
of the Bills
The Medicare Levy Amendment Bill has one Schedule which
amends the Medicare Levy Act to increase the Medicare levy rate from two
to 2.5 per cent and make consequential amendments to the Medicare
levy phase-in provisions for low-income families and trusts. The Other Taxation
Bills consist of one Schedule each, amending various statutes to increase taxes
that are linked to the Medicare levy or to the top marginal personal income tax
rate inclusive of the Medicare levy. The amendments to taxation laws are
contained in separate Bills to satisfy the requirements of section 55 of the Constitution
that ‘laws imposing taxation, except laws imposing duties of customs or of
excise, shall deal with one subject of taxation only’.
The NBF Repeal Bill consists of one Schedule divided into
three parts.
Background
National Disability Insurance Scheme
As set out above, the Government has stated that the
additional funding from the Medicare levy increase and the uncommitted funding
from the BAF and the EIF will to be used to assist with funding the NDIS.
The NDIS is a system of government support for eligible people
with disability. It was trialled from July 2013, and is being progressively
rolled out across Australia between 2016 and 2019.[3]
The NDIS was established in response to a campaign for national disability
insurance, and the Productivity Commission (PC) recommendation that Australia
replace the previous ‘underfunded, unfair, fragmented, and inefficient’ system.[4]
The central component of the NDIS is individualised packages
of ‘reasonable and necessary supports’ for eligible people under the age of 65.[5]
The NDIS is also intended to provide all people with disability, their families
and carers with information, links and referrals to disability and mainstream
supports.[6]
The NDIS is not intended to replace these mainstream supports and services,
such as the school education, health and income support systems.[7]
The NDIS was established under the National Disability
Insurance Scheme Act 2013, and is jointly governed and funded by the
Australian and state and territory governments. Like many other social policy
programs—such as Medicare and the Pharmaceutical Benefits Scheme—the NDIS is an
uncapped (demand-driven) scheme, and is not means tested.[8]
Funding the
National Disability Insurance Scheme
Initial
intentions
Guaranteed future funding for disability services was part
of the rationale for the NDIS.[9]
The PC noted in its 2011 report that ‘current funding for disability is subject
to the vagaries of governments’ budget cycles’.[10]
It recommended that in order to provide a stable revenue stream ‘the Australian
Government should finance the costs of the NDIS by directing payments from consolidated
revenue into a ‘National Disability Insurance Premium Fund’, using an agreed
formula entrenched in legislation’.[11]
However, the PC also outlined ‘less preferred’ options,
including that the Australian Government could ‘legislate for a levy on personal
income... with an increment added to the existing marginal income tax rates, and
hypothecated to the full revenue needs of the NDIS’.[12]
It also suggested ‘all governments could pool funding, subject to a long-run
arrangement based on... [a] formula, and with pre-specified funding shares’.[13]
In response to the PC report, the Gillard Government
announced that it would ‘start work immediately with states and territories on
measures that will build the foundations for a National Disability Insurance
Scheme’.[14]
Current
arrangements
Following this, the Australian and state and territory
governments created intergovernmental agreements establishing that funding for
the NDIS would be drawn from a combination of sources from all governments.[15]
This included some Australian Government funding previously directed to state
and territory governments for disability services being redirected to the NDIS.[16]
In addition, some funds are being transferred from existing disability programs
and services to the NDIS.[17]
However, governments committed to maintaining continuity of support until the
NDIS is fully implemented, and it appears they will be required to continue
funding ongoing support for people with disability who are not eligible for the
NDIS.[18]
The NDIS is also partly funded from the initial increase
to the Medicare levy, which was raised from 1.5 per cent to 2.0 per cent of
taxable income from July 2014.[19]
The resulting revenue is directed to the DisabilityCare Australia Fund, to be
invested through the Future Fund.[20]
The Australian Government receives approximately two-thirds of the revenue from
the DisabilityCare Australia Fund, and the rest goes to state and territory
governments to partially reimburse their contributions to the NDIS.[21] Other
contributions are funded through general revenue, savings or borrowings.[22]
Arrangements for funding the NDIS are complex, and exact
settings for the full scheme are still under consideration, as outlined in the
PC’s position paper on NDIS costs.[23]
While the amounts provided by state and territory governments will escalate at
an agreed rate, it is predicted the proportion of funding provided by the Australian
Government is likely to grow to more than half of total NDIS funding over time.[24]
Further, the Australian Government is largely responsible for funding cost
overruns, though arrangements were still being finalised as of June 2017.[25]
National
Disability Insurance Scheme Savings Fund Special Account
The Government proposes to contribute the increased
revenue from the Medicare levy and the uncommitted balances of the BAF and the
EIF to the NDIS Special Account. The NDIS Special Account is to be established
by the NDIS Special Account Bill which was introduced into the House of
Representatives on 31 August 2016 and progressed to the Senate on 20 March
2017. However it has yet to be debated in the Senate.
The NDIS Special Account is a special account under the Public Governance,
Performance and Accountability Act 2013 (PGPA Act) with the following purposes
as set out in clause 6 of the NDIS Special Account Bill:
- to assist the Commonwealth to meet its funding obligations in relation
to the NDIS Act
- to make payments to the National Disability Insurance Scheme Launch
Transition Agency (the Agency) for the purposes of the Agency
- to reduce the balance of the Special Account (and, therefore, the
available appropriation for the account) without making a real or notional
payment.[26]
The NDIS Special Account Bill was referred to the Senate
Standing Committee on Community Affairs (Community Affairs Committee) for
inquiry and report.[27]
A number of submitters to the Community Affairs Committee questioned the need
for a special account, particularly in addition to the DisabilityCare Australia
Fund. The rationale for establishing the special account, according to the
Department of Social Services, is to more quickly respond to urgent funding
needs than would be possible from the DisabilityCare Australia Fund and because
the NDIS Special Account is solely for the purpose of meeting the
Commonwealth’s funding requirement, not state expenditures.[28]
Costs and
‘fully-funding’ the NDIS
There is an ongoing debate about whether the initial
funding arrangements for the NDIS were sufficient to cover the full, continuing
costs of the scheme. The Australian Labor Party (Labor) has maintained the ‘NDIS
was fully funded by the former Labor Government in the 2013-14 Budget’.[29]
However, this has been challenged by members of the current Government. For
example, the Minister for Social Services, Christian Porter, has said that ‘the
previous Labor government failed to fully-fund the NDIS, leaving a substantial
funding gap of $3.8 billion for when the scheme is fully operational from
2020’.[30]
Introducing the Medicare Levy Amendment Bill into the House of Representatives,
the Treasurer, Scott Morrison, reiterated this view, declaring ‘[n]ow is the
time to fully fund the NDIS once and for all, and, with this Bill, we will
finally achieve that objective’.[31]
When the NDIS is fully implemented in 2019–20 it is
predicted to cost $22 billion.[32]
Of this, state and territory governments are expected to provide $10.3 billion,
and the rest is to be funded by the Australian Government.[33]
As shown in Chart 1 from the 2017–18 budget papers, the Government has
indicated that funding from the proposed Medicare levy increase from July 2019
will cover the gap it has identified between the sources of funding identified
above and the remaining amount it is obliged to provide under agreements with
the states and territories.[34]
The Government has indicated that the revenue raised through the increase in
the Medicare levy will be directed to the proposed NDIS Special Account.
Chart 1:
Commonwealth’s NDIS contribution and funding sources
Source: Australian
Government, Budget strategy and outlook: budget paper no. 1:
2017–18, p. 3–10.
Given revenue from the Medicare levy is not intended to
meet the full cost of the NDIS, it may not provide the stable revenue stream
originally envisaged by the PC.[35]
Moreover, it is unusual to focus on ‘fully-funding’ a national program such as
the NDIS.
Hypothecation
of taxation
While the Government has stated that the additional
funding from the increase in the Medicare levy and other related taxes and the
uncommitted balances of the BAF and the EIF will contribute to the NDIS Special
Account, the Bills do not create a legal requirement to do so. Rather the Explanatory
Memorandum to the Bills states:
One-fifth of the revenue raised by the Medicare levy [the
full, 0.5 per cent increase] from 1 July 2019 will be credited to the National
Disability Insurance Scheme Savings Fund Special Account ...[36]
Uncommitted funds from the Building Australia Fund and the
Education Investment Fund will subsequently be credited to the National
Disability Insurance Scheme Savings Fund Special Account when it is established.[37]
It should be noted however, that it is unusual for
significant Commonwealth Government expenditure programs to be funded by taxes
which are hypothecated for that purpose through legislation. The ongoing costs
of the Age Pension, for example, are funded directly from the consolidated
revenue fund as part of the ongoing costs of the Government’s core business. An
example of levies that are hypothecated through legislation for specific
purposes are agricultural levies.[38]
Committee
consideration
Senate
Standing Committee on Economics
The suite of Bills was referred to the Senate Standing
Committee on Economics (Economics Committee) for inquiry.[39]
The Economics Committee released its report on 16 October 2017 and recommended
that the Bills be passed, however the Labor Party issued a dissenting report.[40]
The Economics Committee had received 25 submissions.
The submissions to the Economics Committee were primarily
from disability, care and community organisations who have differing views on
the funding arrangements for the NDIS, and advocates from the higher education
sector expressing concerns about abolition of the EIF. The views of submitters
in relation to the repeal of the EIF are canvassed under the heading
‘Nation-building Funds Repeal Bill’ below.
Disability,
carer and community organisations views on the Bill
Disability, carer and community organisations have
emphasised that ‘secure, sustainable and sufficient long term funding for NDIS’
should not be politicised.[41]
Generally, these groups have expressed support for changing the Medicare levy
to generate funding for the NDIS, and indicated it is preferable to funding the
NDIS through social welfare cuts.
Organisations that have expressed support for the
Government’s proposal include the Australian Federation of Disability
Organisations and the Disability Advocacy Network Australia.[42]
National Disability Services (NDS), the peak industry body for non-government
disability services, has ‘welcomed the Federal Government’s decision to fully
fund its share of the NDIS by increasing the Medicare Levy’.[43]
NDS also noted the Labor Party’s proposal to limit the increase to higher
income earners, and stated it ‘has no view about which tax mix is preferable,
but believes that a political argument over tax equity should not be allowed to
jeopardise the securing of a funding stream for the NDIS’.[44]
The peak body for the community services sector, the
Australian Council of Social Services (ACOSS), has also supported amending the
Medicare Levy to raise revenue for the NDIS.[45]
However, ACOSS has proposed the following alternative options for restructuring
the Medicare levy and raising $4 billion ‘in a more progressive way’:
Removing the health insurance exemption from the Surcharge
(as proposed by the Australian Greens); broadening the income ‘base’ of the
Levy to include tax-sheltered income; replacing the Levy and Surcharge with a
Levy with a three-tier tax scale; and replacing them with a Levy based on a
proportion of personal income tax paid each year.[46]
The Disabled People’s Organisations Australia alliance has
supported these proposals from ACOSS.[47]
In contrast, the Australian Nursing and Midwifery Federation
(ANMF) has opposed ‘[t]ying the Medicare levy to funding the NDIS’, arguing
this ‘risks creating a prejudice among the community that disability is
increasing health care costs without the benefit of providing increased health
services for all’.[48]
Instead, ANMF advocates generating funding for the NDIS by ‘reversing the
corporate tax cut and implementing other reforms’.[49]
Other stakeholders have suggested the debate about
‘fully-funding’ the NDIS should be broadened to consider whether funding the
NDIS is treated as ‘peripheral’ or ‘core’ government business. For example, the
representative groups Children and Young People with Disability Australia
(CYDA) and Young People in Nursing Homes National Alliance (YPINHNA) have
argued:
Because the NDIS will support the realisation of Australia’s
human rights obligations and provide essential services and supports for people
with disability, CYDA and YPINHNA believe it is critical to recognise the
Scheme as a core area of government spending.[50]
YPINHNA further emphasised:
...if the NDIS was a core function of government, there would
be no ‘shortfalls’ as they are conceived in this Bill [the National Disability
Insurance Scheme Savings Fund Special Account Bill 2016]. Core functions of
government do not have ‘accounts’ to ensure their survival and obligations ...
nor should the NDIS.[51]
For these reasons, CYDA and YPINHNA are ‘unable to support
the legislative package’.[52]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment in relation to the Bills.[53]
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 Bills’ 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 Bills are compatible.[54]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights considered
that the Bills do not raise any human rights concerns.[55]
Medicare
Levy Amendment Bill
The Medicare Levy Amendment Bill implements the measure
announced by the Government in the 2017–18 Budget to increase the Medicare levy
from two per cent to 2.5 per cent to assist with funding the NDIS.[56]
The Other Taxation Bills amend other statutes which provide for tax rates that
are linked to the rate of the Medicare levy or the highest marginal personal
income tax rate inclusive of the Medicare levy.
Background—Medicare
levy
The Medicare levy is applied in addition to personal income
tax, currently equal to two per cent of an individual’s total taxable income.
Exemptions from the Medicare levy apply to foreign residents, individuals with
certain medical conditions and individuals not entitled to Medicare benefits.[57]
Low-income individuals, families and pensioners may pay the
Medicare levy at a reduced rate based on their personal[58]
or family income.[59]
Below certain income thresholds, low-income earners pay no Medicare levy. Above
those thresholds the Medicare levy phases-in according to a formula specified
in legislation. The low-income thresholds are higher for pensioners and seniors
who are eligible to receive the Seniors and Pensioners Tax Offset (SAPTO) and
for families with dependent children (the thresholds increase further with the
number of dependents). These income thresholds and the formulas for phasing-in
the Medicare levy are specified in the Medicare Levy Act. The income
thresholds are increased annually through legislation.[60]
The Medicare levy was first introduced in February 1984 to help fund Australia's national health insurance scheme Medicare
and was set at one per cent of taxable income. Since then it has been increased
permanently on a number of occasions to offset increases in medical costs; in
1986 to 1.25 per cent, in 1993 to 1.4 per cent and in 1995 to 1.5 per cent.[61]
It was increased to two per cent in 2013 by the Gillard Government to help fund
the NDIS (at that time called DisabilityCare).[62]
A temporary surcharge to the levy of 0.2 per cent was also applied for one year
in 1996 to help fund the Howard Government’s gun buyback scheme in the wake of
the Port Arthur shootings.[63]
Opposition/minor
party views on increasing the Medicare levy
In its dissenting report on the inquiry into the Bills,
Labor reiterated its proposal to limit the increase in the Medicare levy to
individuals earning over $87,000 and to retain the temporary Budget repair levy
on individuals earning over $180,000.[64]
The Government is reportedly still negotiating the
increase in the Medicare levy with the Australian Greens and other
non-government parties and independents. Senator Derryn Hinch reportedly
supports the proposal.[65]
Financial
implications
According to the Explanatory Memorandum to the Bills the
increase in the Medicare levy brought about by the Medicare Levy Amendment Bill
and the associated tax changes contained in the Other Taxation Bills will
increase revenue by $8.2 billion over the 2017-18 Budget forward estimates
period.[66]
Commencement
The Medicare Levy Amendment Bill commences on the first 1
January, 1 April, 1 July or 1 October after Royal Assent. The amendments apply
to assessments for the 2019–20 year of income and later years of income.[67]
Key provisions
The Medicare Levy Amendment Bill amends the Medicare
Levy Act. Currently section 6 of the Medicare Levy Act provides that
the rate of the levy payable in specified circumstances is two per cent of
taxable income. Item 1 amends subsections 6(1) to (6) to increase
the Medicare levy tax rate from two to 2.5 per cent in each of those
circumstances, being for individuals[68]
and trustees of trusts,[69]
including managed investment trusts.[70]
Section 7 of the Medicare Levy Act sets the amount
of the levy to be paid in cases of small incomes. Item 2 of the Medicare
Levy Amendment Bill amends subsection 7(4) which currently provides that a
reduced rate of Medicare levy is paid by a trust which has taxable income for a
year of between $416 and $520 per annum. The amendment increases the top of
this band to $555 per annum.
Section 8 of the Medicare Levy Act sets out the
formula for calculating the amount of levy payable by a person who has a spouse
or dependants. Item 3 of the Medicare Levy Amendment Bill amends
subsection 8(2) of the Medicare Levy Act which sets out the calculation
for phasing-in the Medicare levy for low-income families. This provides for a
reduction in Medicare levy based on combined family income within a certain
income range. The lower threshold of this range is called the ‘family income
threshold’.[71]
Above the family income threshold the Medicare levy phases in according to
the formula at subsection 8(2). The formula is amended by the Bill to reflect
the increase in the Medicare levy rate to 2.5 per cent.
The changes in this Bill apply to the 2019-20 income year
and all later income years.
Other Taxation
Bills
Commencement
The Other Taxation Bills commence at the same time as Schedule
1 of the Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Act 2017. However, the provisions do not commence at all if that
Schedule does not commence.
Key
provisions
FBT Bill
The FBT Bill amends the Fringe Benefits Tax
Act 1986 which imposes tax in respect of the fringe benefits taxable
amount of an employer of a year of tax.[72]
Currently the rate of the tax is 47 per cent.[73]
The FBT Bill amends section 6 of the Fringe Benefit Tax Act to increase
the rate to 47.5 percent.
The amendments in the FBT Bill apply to the tax year
starting on 1 April 2019 and all later years of tax, as the FBT year runs from
1 April to 31 March.[74]
Income Tax
Rates Amendment Bill
The Income Tax Rates Amendment Bill amends the Income Tax Rates
Act 1986. Part III of the Income Tax Rates Act sets the rates of
income tax payable upon incomes of companies, prescribed unit trusts,
superannuation funds and certain other trusts. In particular, section 29 sets
the rate of tax payable by:
- a
trustee of a complying superannuation fund in respect of the no-TFN
contributions income of the fund
- a
trustee of a non-complying superannuation fund in respect of the no-TFN
contributions income of the fund and
- a
company that is an Retirement Savings Account provider in respect of no-TFN
contributions income.[75]
Currently the rate of tax payable under the Income Tax
Rates Act is worked out using the formula in subsection 29(2), which
requires as part of the process, the addition of two per cent to a base amount.
The Income Tax Rates Amendment Bill amends that step in the formula by increasing
the additional amount to 2.5 per cent.
Excess
Non-Concessional Contributions Tax Bill
Section 292-80 of the Income Tax
Assessment Act 1997 (ITAA 1997) provides that a person is liable
to pay excess non-concessional contributions tax imposed by the Superannuation
(Excess Non-concessional Contributions Tax) Act 2007 if the person has
excess non-concessional contributions for a financial year. A person has excess
non-concessional contributions where their non-concessional contributions
exceed the relevant cap, and they elect not to release the amount of the excess
and associated earnings.[76]
The Excess Non-Concessional Contributions Tax Bill amends section
5 of the Superannuation (Excess Non-concessional Contributions Tax) Act to
increase the tax from 47 percent to 47.5 percent of the person’s excess
non-concessional contributions for a financial year.
Excess
Untaxed Roll-Over Amounts Tax Bill
Members of most super funds can request that their super
benefits be transferred into a fund of their choice.[77]
Division 306 of the ITAA 1997 sets out the tax treatment of payments
made from one superannuation plan to another superannuation plan, and of
similar payments.[78]
This is called a roll-over superannuation benefit.[79]
Where a roll-over superannuation benefit includes an element that has been untaxed
—and the amount of the benefit exceeds the person’s untaxed plan cap amount,
the person is liable to tax on the amount of the excess.[80]
The Excess Untaxed Roll-Over Amounts Tax Bill amends
subsection 5(2) of the Superannuation
(Excess Untaxed Roll-over Amounts Tax) Act 2007 so that the formula for
calculating the tax liability includes an increase from two per cent
to 2.5 per cent.
TFN
Withholding Tax (ESS) Bill
Subdivision 14-C of the Taxation
Administration Act 1953 applies where an employer provides one or more
employee share scheme (ESS)[81]
interests under an employee share scheme and the employee has not quoted their
Australian business number or their tax file number to their employer by the
end of the income year. Where this section applies the Income Tax (TFN
Withholding Tax (ESS)) Act 2009 imposes additional income tax on
amounts that are included in a person’s assessable income.
The TFN Withholding Tax (ESS) Bill amends paragraph 4(b)
of the Income Tax (TFN Withholding Tax (ESS)) Act so that the formula
for calculating the additional tax liability includes an increase from two per
cent to 2.5 per cent.
Family
Trust Distribution Bill
The Family Trust
Distribution Tax (Primary Liability) Act 1998 imposes tax that is payable
on the amount or value of income or capital that is assessed under
section 271‑15,[82]
271‑20,[83]
271‑25,[84]
271‑30[85]
or 271‑55[86]
in Schedule 2F to the Income Tax
Assessment Act 1936 (ITAA 1936).
Currently the rate of tax is set at 47 per cent. The Family
Trust Distribution Bill amends section 4 of the Family Trust Distribution
Tax (Primary Liability) Act to increase the tax rate to 47.5 per cent.
Trustee
Beneficiary Non-Disclosure (No. 1) Bill
The Taxation (Trustee
Beneficiary Non-disclosure Tax) Act (No. 1) 2007 imposes tax on the
amount payable under paragraph 102UK(2)(a) of the ITAA 1936. Section
102UK relates to the giving of a trustee beneficiary statement in respect of a
specified period.
Currently the amount of the tax is set at 47 per cent. The
Trustee Beneficiary Non-Disclosure (No. 1) Bill amends section 4 of the Taxation
(Trustee Beneficiary Non-disclosure Tax) Act (No. 1) to increase the rate
to 47.5 per cent.
Trustee
Beneficiary Non-Disclosure (No. 2) Bill
The Taxation (Trustee
Beneficiary Non-disclosure Tax) Act (No. 2) 2007 imposes tax on
the amount payable under paragraph 102UM(2)(a) of the ITAA 1936. It
applies where a share of the net income of a closely held trust is included in
the assessable income of a trustee and beneficiary and the share (or part of
it) is income which the trustee of the closely held trust becomes entitled to.
Currently the amount of the tax is set at 47 per cent. The
Trustee Beneficiary Non-Disclosure (No. 2) Bill amends section 4 of the Taxation
(Trustee Beneficiary Non-disclosure Tax) Act (No. 2) to increase the rate
to 47.5 per cent.
Untainting
Tax Bill
The share capital account tainting rules in
the ITAA 1997 are designed to prevent a company from transferring
profits into a share capital account and then distributing these amounts to
shareholders disguised as a non-assessable capital distribution.
If a company's share capital account is
tainted:
- a franking debit arises in the company's franking account at the end of
the franking period in which the transfer occurs
- any distribution from the account is taxed as an unfranked dividend in
the hands of the shareholder
- the account is generally not taken to be a share capital account for
the purposes of the ITAA 1936 and ITAA 1997.
A company's share capital account remains
tainted until the company chooses to untaint the account. The choice to untaint
a company's share capital account can be made at any time, but once the choice
is made it cannot be revoked.[87]
Where the company chooses to untaint the account an untainting
tax is payable. Section 197-60 of the ITAA 1997 sets out the formula for
calculating the amount of an untainting tax which is payable. The Untainting
Tax Bill amends subsection 197-60 to increase the applicable tax rate by 0.5
per cent.
With the exception of the amendments in the FBT Bill, the
taxes affected by the Other Taxation Bills apply from 1 July 2019, or
the 2019–20 income year and all later income years.
Nation-building
Funds Repeal Bill
The NBF Repeal Bill implements the Government’s
announcement in the 2016–17 Mid-year Economic and Fiscal Outlook (MYEFO) that
it would use the uncommitted funds in the BAF and the EIF to assist with
funding the NDIS and reducing Commonwealth debt.[88]
Background—the
Funds
The NBF Repeal Bill repeals the NBF Act. The NBF
Act as enacted established three Funds—the BAF, the EIF and the Health and
Hospitals Fund.[89]
The balance of the Health and Hospitals Fund was transferred into the Medical
Research Future Fund with the enactment of the Medical Research Future Fund
Act 2015.[90]
Initial funding for the BAF was around $2.5 billion from
the Communications Fund and $966 million from the Telstra Sale Special Account.[91]
Initial funding for the EIF was around $6.5 billion from the balance of the Higher
Education Endowment Fund (HEEF), which had been established in 2007 and was
being replaced by the new Fund.[92]
Ongoing funding for the BAF and the EIF was intended to come from Commonwealth
Budget surpluses and Fund investments. In total, $12.5 billion from the 2007-08
Budget surplus was credited to the Nation-building Funds, including $7.5
billion to the BAF and $5 billion to the Health and Hospitals Fund.[93]
However, with the Budget going into deficit from 2008–09, this was the only
year that funds from surpluses were credited to the Nation-building Funds.[94]
In 2014, the National Commission of Audit (NCOA) suggested
‘the Government may wish to re-examine the need for the Nation-building funds
in their current form’. The NCOA identified:
A weakness in current infrastructure funding arrangements
between the Commonwealth and the States is that Commonwealth funding is
generally focused on investing in new projects...
The current arrangements for the three Nation-building Funds,
with funding only able to be directed to capital expenditure, leads to an undue
emphasis on ‘ribbon cutting’ opportunities generally associated with new
projects, at the expense of periodic maintenance and of small-scale
improvements that could postpone or even avoid the need for costly asset
expansions.[95]
In the subsequent 2014–15 Budget, the Government announced
the BAF and the EIF would be abolished and the unallocated funds transferred to
the Asset Recycling Fund (ARF), with existing EIF projects to continue to
receive funding according to their funding agreements.[96]
Accordingly, the Asset Recycling Fund Bill 2014 was introduced
into the House of Representatives on 29 May 2014. However, the Bill lapsed
when the Parliament was prorogued on 15 April 2016.
The rationale for the repeal of the NBF Act is to
redirect the uncommitted balance of the BAF and the EIF to the NDIS Special
Account. As at 30 June 2017, the uncommitted balance of the BAF is $3.79
billion and the uncommitted balance of the EIF is $3.79 billion, with a current
total of $7.57 billion.[97]
Building
Australia Fund
The BAF is a Special Account for the purposes of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act). It was established on 1 January 2009 by section
12 of the NBF Act ‘to finance capital investment in
transport infrastructure (such as roads, rail, urban transport and ports),
communications infrastructure (such as broadband), energy infrastructure and
water infrastructure’.[98]
Infrastructure Australia evaluates projects
and provides advice to Government Ministers on proposals to be funded from the
BAF. Infrastructure Australia is required to evaluate projects against the BAF
Evaluation Criteria which includes assessing the
extent to which projects address national infrastructure priorities and are
justified by available evidence and data (including cost-benefit analysis).[99] Since its inception the
BAF has contributed a total of $9.8 billion to approved projects[100] including $2.4 billion
for the National Broadband Network, $3.2 billion in Victoria for regional
rail and $1.5 billion for the Hunter Expressway in NSW.[101]
Education
Investment Fund
The EIF is also a Special Account for the purposes
of the PGPA Act. It was established on 1 January 2009 by section 131 of
the NBF Act to provide dedicated ongoing
capital funding for tertiary education and research infrastructure.[102]
The EIF was established by the Rudd Labor Government in response to concerns
about the sector’s unmet infrastructure needs, including a maintenance backlog
and increased demand for contemporary learning and research spaces.
Base funding for universities is provided through a
combination of the Commonwealth Grant Scheme and the Higher Education Loan
Program (HELP) to meet the basic costs of university learning and teaching
provision. This includes ‘a notional amount to meet the costs of
infrastructure’. However, according to estimates prepared for the higher education base funding review
report, universities had unaddressed maintenance needs estimated to be
between $2.08 billion to $3.19, while growing student numbers and increased
emphasis on competitive research excellence increased pressure for new or
refurbished buildings and other facilities.[103]
The EIF was therefore intended to provide a large-scale funding source for transformational
projects which would allow Australian research and tertiary education
institutions to compete effectively with international counterparts.[104]
Funding rounds for the EIF were held between 2008 and 2011
to resource a range of projects according to need and government priorities (a
list of funding rounds is provided at Appendix A). Responsible Ministers made
recommendations for funding projects to the Prime Minister based on advice from
the EIF Advisory Board against the EIF Evaluation
Criteria.[105]
Over $4
billion of projects were supported, including the
Transformation of Central Queensland University into a dual sector
institution, a Joint
Health Education Facility at Port Macquarie, the Australian Centre for Indigenous
Knowledge and Education, and Australia’s involvement in the Giant Magellan Telescope project.[106]
The importance of ongoing funding akin to
what had been provided by the EIF was emphasised in September 2015, when the final report of
the Research Infrastructure Review found ‘[t]here is
considerable concern about successive governments’ practice of funding long
term investments on short term funding cycles’.[107] The report recommended
the Australian Government:
...commit $3.7 billion funding [remaining from
the EIF] for the Australian National Research Infrastructure Fund within the
Infrastructure Growth Package and the Asset Recycling Fund ... [and suggested] in
all the circumstances, there are good arguments for a proposal to use the EIF
balance for investment in National Research Infrastructure. It is the right
amount, the funds are not being used productively and the proposal is
consistent with the original intended use of the funds.[108]
While the EIF was not exclusively concerned with research
infrastructure, its loss would represent a loss of ongoing capital funding,
which to date, funding to maintain National
Collaborative Research Infrastructure Strategy (NCRIS) facilities under the
National Innovation and Science Agenda (NISA), and the National
Research Infrastructure Roadmap have not addressed.[109]
In 2016, the final report of the Higher
Education Infrastructure Working Group, which was established to advise the
Government on the options available to the higher education sector in relation
to teaching and research infrastructure, found that capital grants accounted
for a higher than usual proportion of higher education infrastructure
investment from 2011 to 2013 (when large-scale EIF funding was being rolled
out) and also allowed institutions to leverage this funding to invest in a
range of significant projects with partner organisations. Yet it also
identified that capital grants, while more significant than usual during this
time period, still accounted for only 18 per cent of infrastructure spending,
with the majority of investment coming from institutions’ cash operating
surpluses. However, the Working Group observed:
...[w]hile most universities have been well
placed to fund their infrastructure investments, there are a small number of
institutions that have clearly struggled... Smaller regional universities, in
particular, were more dependent on capital grants for infrastructure
investment. As a result they will face particular challenges adjusting their
operations to either accumulate the surpluses necessary to internally finance
future infrastructure, particularly large scale building construction and
renewal, or to service substantial debt.
With the loss of the Higher Education Endowment Fund (HEEF)
and the Education Investment Fund (EIF), established to assist universities to
build world class transformative facilities, we have lost something which was
designed to take our institutions to another level.[110]
Thus, the proposed abolition of the EIF appears to
finalise the process of shifting ongoing responsibility for capital funding for
higher education infrastructure to institutions, raising concerns in particular
about the capacity of smaller and rural tertiary education providers and those
with concentrations of research excellence in fields that rely on expensive
specialist facilities and equipment to meet their infrastructure needs.[111]
Policy
position of non-government parties/independents
Opposition/minor
party views on the abolition of the EIF
Labor opposes the abolition of the EIF as a cut to higher
education funding:
We're not going to support their plans to abolish the
Education Investment Fund. If you compare the approach of Labor governments
over decades to higher education to that of the coalition, the Liberal and
National parties, you see the world through the prism of privilege. They vote
accordingly. Others see the world through the prism that higher education is an
opportunity to improve your lot in life. We put in place the Education
Investment Fund, which improved the facilities of universities right around the
country, particularly in regional campuses around the country, where millions
and millions of dollars was invested, including in my own campus at Wollongong.
Millions and millions of dollars was invested. What is this government
attempting to do? Abolish that fund so that those funds aren't available to
invest in university facilities around the country.[112]
The Jacqui Lambie Network also opposes the abolition of
the EIF as a cut to higher education funding:
Now the government is looking to slash another $3.8 billion
from the Education Investment Fund, from infrastructure funding. The
government's rhetoric that universities can afford these cuts because they are
all profiting is an absolute joke. Universities do not profit. When a
university is lucky enough to post a surplus, it is invested in research
infrastructure or student support programs.[113]
Position of
major interest groups
As stated above, many of the submissions to the Economics
Committee inquiry into the Bills were from the higher education sector
expressing concerns about abolition of the EIF.
Higher
Education stakeholder views on the EIF
Higher education stakeholders have reacted strongly against
the proposed abolition of the EIF, with Universities Australia Chief Executive
Belinda Robinson stating:
Without Commonwealth funding for new and refurbished
education buildings, future students, communities and the nation will see a
gradual erosion of our world-class university facilities.[114]
While peak bodies from the higher education sector that
have engaged directly with the question of funding the NDIS are supportive of
the Scheme, they are uniform in their rejection of the EIF as a source of
funding. Many raise concerns about the impact on Australia’s learning, teaching
and research capacity and international competitiveness, and point out that the
EIF was intended to provide funding stability for transformational
infrastructure, and should be used for that purpose in light of other
Government priorities such as the NISA. For example, the Group of Eight (Go8)
submission to the Senate Standing Committee on Economics inquiry into the Bills
calls the loss of the EIF ‘devastating’, saying the remainder of the fund
should be directed towards ongoing funding for capital investment in research
infrastructure:
The Go8 strongly supports the appropriate and effective
funding of the NDIS. However, Governments have choices in how to fund such
landmark schemes. The Go8 contends that the Government can exercise its option
not to use the remaining EIF funds for this purpose, in view of the devastating
impact the loss of the EIF will have on the nation’s research capability. The
use of EIF, conversely, to alleviate the cost of the NDIS can only have a
temporary, short-term and relatively insignificant impact on the scheme’s
budget...Our international competitiveness and reputation in higher education
provision and as a research nation will be placed at risk. Benefits to
industry, the Government’s Industry portfolio and innovation agenda, and other
functions and priorities of government will be compromised. The loss of the EIF
will significantly further compromise the higher education sector if compounded
by the cuts to university funding proposed under the Government’s Higher
Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent
Higher Education System) Bill 2017.[115]
Concerns related to regional and smaller institutions are
also raised in a number of submissions. Although the Regional Universities
Network (RUN) did not make a submission to the inquiry, it has indicated elsewhere
that it shares the concerns expressed by the Higher
Education Infrastructure Working Group about the capacity of some
institutions to invest in infrastructure, despite the overall positive position
of the sector:
Smaller universities have difficulty in generating sufficient
cash surpluses to invest in larger scale infrastructure projects to assist them
in adapting to local market conditions, improve their long-term viability and
enhance the student experience. Finding funding to address deferred maintenance
is also an issue. Coupled with this, less “elite” and younger universities are
less able to attract substantial philanthropic funding, either to fully fund or
co-invest in major teaching and/or research projects. The Education
Infrastructure Fund (EIF) and the Structural Adjustment Fund (SAF) provided
significant infrastructure funding to regional universities which would not
have been otherwise available. Increasingly, universities need to invest in
their IT infrastructure. This is partly to meet student expectations about
flexible modes of delivery, as well as multiple locations and a substantial
number of students studying externally. Investment in IT infrastructure is a
regular call on an institution’s funds, and can be exacerbated by uncertainty
of future teaching methods. IT can be difficult to obtain external borrowings
for this type of investment as there is no physical asset to back the security.[116]
Financial
implications
According to the Explanatory Memorandum to the Bills the
closure of the BAF and the EIF as part of the 2016–17 MYEFO measure Asset
Recycling Fund – not proceeding will increase revenue by $81 million over
the 2016–17 Budget forward estimates period. $7.2 billion is expected to be
contributed to the NDIS special account from the uncommitted balances of the
BAF and the EIF.[117]
Commencement
The NBF Repeal Bill commences on the earliest of a single
day fixed by proclamation, or six months after Royal Assent.
Key
provisions
The Nation-building Funds Repeal Bill consists of one
schedule with three parts. It has the primary purpose of repealing the Nation-building
Funds Act.
Part 1 repeals the Nation-building Funds Act
in its entirety, thereby abolishing both the BAF and the EIF.
Part 2 makes consequential amendments to a number
of Acts which refer to the NBF Act, primarily removing references to the
NBF Act in other Commonwealth Acts.
Items 2 to 4 amend the COAG Reform Fund
Act 2008 to remove references to the NBF Act.
Items 5 to 6 amend the DisabilityCare Australia
Fund Act 2013 to remove references to the NBF Act.
Items 7 to 28 amend the Future Fund Act 2006 to
remove references to the NBF Act.
The Future Fund Board of Guardians has responsibility for
managing the investments of the Building Australia Fund and the Education
Investment Fund in accordance with the funds’ investment mandates.[118]
The proposed amendments to the Future Fund Act will abolish the Board’s
responsibilities in respect of these funds.
Item 29 amends the Health Insurance Act 1973
to note the NBF Act is repealed.
Item 30 to 33 amend the Medical Research Future
Fund Act 2015 to note that the NBF Act is repealed.
Part 3 outlines the transitional provisions for
the NBF Repeal Bill.
Item 34 maintains the right for the Finance
Minister to require the Future Fund Board to prepare reports or provide
information on matters relating to the BAF and the EIF.
Item 35 maintains that any agreement under section
179 of the NBF Act that is in place prior to the repeal of the NBF
Act continues in force. Section 179 relates to grants made from the EIF to
a person other than a state or territory. However, the Minister who administers
the Higher Education Support Act 2013 may vary or revoke such an
agreement.
Section 63 of the Future Fund Act provides
protection from civil and criminal liability for the Board members (including
the Chair) of the Future Fund in relation to acts that they are required to do
under relevant legislation. Section 63 is amended by item 16 to remove
references to the NBF Act. Item 36 provides that, despite the amendment
made by item 16, Board members retain protection for acts required by the NBF
Act that they performed prior to the amendment commencing.
Item 37 provides that the Board of the Future Fund
will continue to be required to provide information on debits from the BAF and
the EIF in its annual report to the Minister.
Item 38 provides that miscellaneous amounts received
by the Board of the Future Fund for the BAF or the EIF are not required to be
credited to the Future Fund. The note to item 38 indicates that these amounts
will form part of the Consolidated Revenue Fund.
Item 39 allows the Minister to make transitional
rules by legislative instrument that relate to amendments in the NBF Repeal
Bill. However the Minister may not create an offence or civil penalty, provide
powers of arrest or detention, entry or seizure, impose a tax, appropriate
amounts from consolidated revenue or directly amend the text of the NBF Repeal
Act (when enacted).
Appendix A:
Education Investment Fund rounds
The following Education Investment Fund funding rounds
were held between 2008 and 2011:
- round
one competitive funding of $580 million announced in 2008
- a
Teaching and Learning Fund of $500 million announced in 2008, distributed to eligible
universities based on domestic student load for building and upgrades of
teaching and learning spaces
- round
two competitive funding of $934.2 million announced in 2009
- the
Super Science Initiative, which provided non-competitive funding of $989.4 million
announced in 2009 to address space science and astronomy, marine and climate
science, and future industries, three of the priorities identified in the Strategic
Roadmap for Australian Research Infrastructure
- round
three competitive funding and the competitive Sustainability Round, totalling
$550 million in 2010
- a
$300 million contribution to the Clean Energy Initiative to support the Solar
Flagship and Carbon Capture and Storage Flagship programs launched in 2009
- a
Structural Adjustment Round launched in 2010, which allocated $200 million for
infrastructure projects associated with adaptation to the demand driven funding
system for domestic undergraduate university places
- a
Regional Priorities Round of $500 million competitive funding to support regional
institutions, launched in 2011.[119]
[1]. Explanatory
Memorandum, Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017 [and related Bills], p. 4.
[2]. P
Pyburne, National
Disability Insurance Scheme Savings Fund Special Account Bill 2016,
Bills digest, 1, 2016–17, Parliamentary Library, Canberra, 2016.
[3]. NDIS,
About
the NDIS, NDIS, p. 2.
[4]. Productivity
Commission (PC), Disability care
and support, Inquiry report, 54, PC, Canberra, 2011, vol. 1, p. 2.
[5]. L
Buckmaster, The
National Disability Insurance Scheme: a quick guide, Research paper
series, 2016–17, Parliamentary Library, Canberra, updated 3 March 2017, p. 1.
Much of this section of the Bills Digest is sourced from this research paper.
[6]. NDIS,
About
the NDIS, op. cit., p. 2.
[7]. NDIS,
The
NDIS and mainstream interfaces, NDIS, 16 January 2014.
[8]. Buckmaster,
The
National Disability Insurance Scheme: a quick guide, op. cit., p. 1.
[9]. L
Buckmaster and A Dunkley, ‘Fully
funding’ the NDIS, in Budget review 2017–18, Research paper series,
2016–17, Parliamentary Library, Canberra, 19 May 2017, p. 112.
[10]. PC,
Disability care and support,
op. cit., vol. 1, p. 3.
[11]. PC,
Disability care and support,
op. cit., vol. 2, p. 637.
[12]. PC,
Disability care and support,
op. cit., vol. 1, p. 85.
[13]. PC,
Disability care and support,
op. cit., vol. 2, p. 637.
[14]. J
Gillard (Prime Minister), Productivity
Commission's final report into disability care and support, media
release, 10 August 2011.
[15]. NDIS,
‘Intergovernmental
agreements’, NDIS website.
[16]. PC,
National
Disability Insurance Scheme (NDIS) costs, position paper, June 2017, p.
328.
[17]. Senate
Community Affairs Committee, Answers to Questions on Notice, Social Services
Portfolio, Supplementary Estimates Hearings 2016–17, Question
No: SQ16-000402; NDIA, Submission to
the Joint Standing Committee on the NDIS, Inquiry regarding the
provision of services under the NDIS for people with psychosocial disabilities
related to a mental health condition, 2017, p. 5.
[18]. A
Dunkley, ‘Mental
health’, Budget review 2017–18, Parliamentary Library, Canberra,
2017, p. 73; Department of Health, Prioritising
mental health—psychosocial support services—funding, The Department,
Canberra, 2017.
[19]. J
Gillard (Prime Minister) and W Swan (Treasurer), Medicare
Levy increase to fund DisabilityCare Australia passes the Parliament,
media release, 16 May 2013; Parliament of Australia, Medicare
Levy Amendment (DisabilityCare Australia) Bill 2013 homepage, Australian
Parliament website.
[20]. PC,
National
Disability Insurance Scheme (NDIS) Costs, op. cit., p. 329; Australian
Government, ‘DisabilityCare
Australia Fund Financials webpage’, Department of Finance website, 18
October 2017; DisabilityCare
Australia Fund Act 2013 (Cth).
[21]. The
amount received by state and territory governments from the DisabilityCare
Australia Fund will increase at 3.5 per cent each year until 2023–24. PC, National Disability
Insurance Scheme (NDIS) Costs, op. cit., pp. 328–9, 335.
[22]. L
Buckmaster, The
National Disability Insurance Scheme: a quick guide, op. cit., p. 4.
[23]. PC,
National
Disability Insurance Scheme (NDIS) costs, op. cit., chapter 10.
[24]. Ibid.,
pp. 47, 333–4.
[25]. Ibid.,
p. 327.
[26]. Pyburne,
National
Disability Insurance Scheme Savings Fund Special Account Bill 2016, op.
cit., p. 6.
[27]. The
terms of reference, submissions to the Committee on Community Affairs and the
final report are available on the inquiry
homepage.
[28]. Senate
Community Affairs Legislation Committee, National Disability Insurance Scheme Savings Fund Special Account Bill
2016 [Provisions], 7 November
2016, p. 11.
[29]. J
Macklin (Shadow Minister for Families and Social Services), Morrison
can’t hold the NDIS to ransom again, media release, 9 May 2017.
[30]. C
Porter (Minister for Social Services), Z Seselja (Assistant Minister for Social
Services and Multicultural Affairs) and J Prentice (Assistant Minister for
Social Services and Disability Services), Guaranteeing
the NDIS and providing stronger support for people with disability, joint
media release, 9 May 2017.
[31]. S
Morrison, ‘Second
reading speech: Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017’, House of Representatives, Debates, 17 August
2017, p. 8825.
[32]. PC,
National
Disability Insurance Scheme (NDIS) costs, op. cit., p. 323.
[33]. Ibid.
[34]. Australian
Government, Budget
strategy and outlook: budget paper no. 1: 2017–18, pp. 3–9.
[35]. Buckmaster
and Dunkley, ‘Fully funding’ the NDIS,
op. cit., p. 113.
[36]. Explanatory
Memorandum, Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017 [and related Bills], p. 8.
[37]. Ibid,
p. 4.
[38]. For
example, levies under the Primary Industries
(Excise) Levies Act 1999.
[39]. The
terms of reference, submissions to the Committee on Economics and the final
report are available on the inquiry
homepage.
[40]. Senate
Economics Legislation Committee, Medicare
Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
related bills [provisions], The Senate, Canberra, 16 October 2017, pp.
26–27.
[41]. Disabled
People’s Organisations (DPO) Australia, Australian Federation of Disability
Organisations (AFDO) and Australian Council of Social Services (ACOSS), We
call on this Parliament to deliver secure, sustainable and sufficient funding
for the National Disability Insurance Scheme, media release, 23 July
2017.
[42]. AFDO,
Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10 Related
Bills [Provisions], September 2017; G Chan, ‘Labor
using NDIS and Medicare levy “to play politics”, disability groups say’, The
Guardian, 15 May 2017.
[43]. National
Disability Services, Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy Amendment
(National Disability Insurance Scheme Funding) Bill 2017 and 10 Related Bills
[Provisions], September 2017.
[44]. Ibid.
[45]. ACOSS,
Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
Related Bills [Provisions], 7 September 2017.
[46]. Ibid.,
pp. 1, 19.
[47]. DPO
Australia, Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
Related Bills [Provisions], September 2017, p. 3.
[48]. Australian
Nursing and Midwifery Federation, Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
Related Bills [Provisions], September 2017, p. 2.
[49]. Ibid.,
p. 3.
[50]. Children
and Young People with Disability Australia (CYDA) and Young People in Nursing
Homes National Alliance (YPINHNA), Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
Related Bills [Provisions], September 2017, p. 5.
[51]. YPINHNA,
Submission
to the Senate Standing Committee on Community Affairs, Inquiry into the
National Disability Insurance Scheme Savings Fund Special Account Bill 2016,
October 2016, pp. 2–3.
[52]. CYDA
and YPINHNA, Submission
to Senate Standing Committee on Economics, Inquiry into the Medicare Levy
Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
Related Bills [Provisions], op. cit., p. 2.
[53]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 10,
2017, The Senate, Canberra, 6 September 2017, p. 19.
[54]. The
Statement of Compatibility with Human Rights can be found at pages 18-24 and
page 31 of the Explanatory
Memorandum to the Bills.
[55]. Parliamentary
Joint Committee on Human Rights, Scrutiny
report, 9,
2017, 5 September 2017, p. 83.
[56]. Australian
Government, Budget
measures: budget paper no. 2: 2017–18, pp. 24–25.
[57]. Australian
Taxation Office (ATO), 'Medicare
levy exemption’, ATO website, last modified 7 July 2017.
[58]. ATO,
‘Medicare
levy reduction for low income earners’, ATO website, last modified 29 June
2017.
[59]. ATO,
‘Medicare
levy reduction – family income’, ATO website, last modified 29 June 2017.
[60]. For
example, the Treasury
Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Act 2017.
[61]. A
Biggs, 'A
short history of increases to Medicare levy’, FlagPost, Parliamentary
Library blog, 3 May 2013.
[62]. Parliament
of Australia, ‘Medicare
Levy Amendment (Disability Care Australia) Bill 2013 homepage’ Australian
Parliament website.
[63]. Biggs,
op. cit.
[64]. Senate
Economics Legislation Committee, Inquiry
into the Medicare Levy Amendment (National Disability
Insurance Scheme Funding) Bill 2017 and 10 related bills, The Senate, Canberra, 16 October 2017, p. 27.
[65]. C
Gribbin, ‘Bill
to hike Medicare levy to raise $8 billion NDIS funding set to face Parliament’,
ABC News online, 17 August 2017.
[66]. Explanatory
Memorandum Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017 [and related Bills], p. 4.
[67]. Item
4 of the Medicare Levy Amendment Bill.
[68]. Medicare
Levy Act, subsection 6(1).
[69]. Medicare
Levy Act, subsections 6(2) and 6(3).
[70]. Medicare
Levy Act, subsections 6(4)-(6).
[71]. The
family income threshold is set under subsections 8(5)-8(7) of the Medicare
Levy Act and is currently $36,541 (or $47,670 if the individual is eligible
for SAPTO) and increases by $3,356 per dependent.
[72]. Fringe
Benefits Tax Act, section 5.
[73]. Fringe
Benefits Tax Act, section 6.
[74]. ATO,
Fringe benefits tax – rates and
thresholds, ATO website, last modified 15 September 2017.
[75]. Section
295-610 of the Income
Tax Assessment Act 1997 provides that no-TFN contributions
relate to contributions to a superannuation fund by a person who has not
provided the fund with their Tax File Number.
[76]. The
cap is set by Subdivision 292-C of the ITAA 1997.
[77]. Australian
Taxation Office (ATO), ‘Receiving
member roll-over requests’, ATO website, last modified 8 September 2015.
[78]. ITAA
1997, section 306-1.
[79]. ITAA
1997, section 306-10.
[80]. ITAA
1997, section 307-350 sets out the cap amount.
[81]. ITAA
1997, section 995-1.
[82]. Tax
liability where family trust makes distribution outside a family group.
[83]. Tax
liability where interposed trust makes distribution outside a family group.
[84]. Tax
liability where interposed partnership makes distribution outside a family
group.
[85]. Tax
liability where interposed company makes distribution outside a family group.
[86]. Notice
requiring information about non-resident distributions.
[87]. Australian
Taxation Office (ATO), ‘Share
capital account tainting’, ATO website, last modified 1 December 2016.
[88]. S
Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year
economic and fiscal outlook 2016-17, December 2016, p. 157.
[89]. R
Webb, C Dow and R de Boer, Nation-building
Funds Bill 2008, Bills digest, 67, 2008–09, Parliamentary Library,
Canberra, 2008.
[90]. J
Murphy and D Brett, Medical
Research Future Fund Bill 2015 [and] Medical Research Future Fund
(Consequential Amendments) Bill 2015, Bills digest, 3, 2015–16,
Parliamentary Library, Canberra, 2015.
[91]. Nation-building
Funds Act 2008 (as made), sections 16 and 17.
[92]. Nation-building
Funds Act 2008 (as made), section 133; Nation-building
Funds (Consequential Amendments) Act 2008.
[93]. Department
of Finance (DoF), Nation-building funds financials, DoF website,
last updated 18 October 2017.
[94]. Senate
Standing Committee on Economics, Inquiry
into the Nation-building Funds Bill 2008 [Provisions], Nation-building
Funds (Consequential Amendments) Bill 2008 [Provisions] and COAG Reform Fund
Bill 2008 [Provisions], The Senate, Canberra, 2008, pp. 1–2, accessed
13 September 2017.
[95]. National
Commission of Audit, Towards
responsible government, Phase 2, section 2.4 Commonwealth funding to state
and local governments for infrastructure, 2014, pp. 31–32.
[96]. Australian
Government, Budget measures:
budget paper no. 2: 2014–15, p. 114–115.
[97]. Department
of Finance (DoF), Nation-building funds financials, DoF website,
last updated 18 October 2017.
[98]. DoF,
‘Nation
building funds: building Australia fund’, DoF website, last updated 18
October 2013.
[99]. BAF Evaluation
Criteria
[100]. DoF,
Building
Australia Fund – approved projects, DoF website.
[101]. National
Commission of Audit, op. cit., p. 31.
[102]. Section
131, Nation-building
Funds Act 2008 (Cth); Australian National Audit Office (ANAO), Agency management of special accounts,
Audit report, 24, 2003–04, ANAO, Barton, ACT, 2004; Department of Finance, ‘Special
appropriations: special accounts’, DoF website, provides the following
definition: ‘A special account is a limited special appropriation that
notionally sets aside an amount that can be expended for listed purposes. The
amount of appropriation that may be drawn from the CRF [Consolidated Revenue
Fund] by means of a special account is limited to the balance of each special
account at any given time.’ The EIF Special Account is operated through two
Portfolio Special Accounts, the EIF Education Portfolio Special Account and the
EIF Research Portfolio Special Account.
[103]. Higher Education Base Funding Review [Panel]: final report, [Department of Education, Employment and Workplace Relations,
Canberra], 2011, p. 45 and 84–85.
[104]. Australian
National Audit Office (ANAO), Administration
of Grants from the Education Investment Fund: Department of Industry,
Innovation, Climate Change, Science, Research and Tertiary Education,
Audit report, 37, 2012–13, ANAO, Barton, ACT, 2013.
[105]. Ibid.
[106]. Finance,
‘Education
investment fund – approved projects’, Finance website; Central Queensland
University (CQ University), ‘Dual
sector university decision will transform central Queensland’, CQ
University website; University of New South Wales, Sydney (UNSW Sydney), ‘Joint
health education facility – Port Macquarie: expanding medical education
opportunities in regional Australia’, UNSW Sydney website; Charles Darwin University (CDU), ‘Australian Centre for Indigenous Knowledge
and Education’, CDU website; Australian Giant Magellan Project Office, ‘Giant Magellan telescope
information’, Australian Giant Magellan Project
Office website.
[107]. Research
Infrastructure Review, Research
Infrastructure Review: final report, 10 September 2015, p. 3.
[108]. Ibid.,
pp. viii, 30 and 32.
[109]. Department
of Education and Training (DET), ‘National collaborative research infrastructure strategy (NCRIS)’, DET website; Department of Education and Training (DET), ‘2016 National research infrastructure roadmap’,
DET website, last modified 12 May 2017.
[110]. Research
Infrastructure Review, Research
Infrastructure Review: final report, op. cit., pp. 18–21.
[111]. While
the trend toward ‘roll in’ of infrastructure funding for learning and teaching
purposes has been long-running, the opposite trend has emerged in research
funding, with the need to address the cross-subsidisation of research from
learning and teaching. A history of government capital infrastructure funding
is provided at pp.40–42 of P M Clark, Research Infrastructure
Review: final report, Department of Education and Training, Canberra, 5
September 2015.
[112]. S
Jones, ‘Second
reading speech: Higher Education Support Legislation Amendment (A More
Sustainable, Responsive and Transparent Higher Education System) Bill 2017,’
House of Representatives, Debates, 12 September 2017, p. 10,086.
[113]. J
Lambie, ‘Questions
without notice: higher education’, Senate, Debates, 12 September
2017, p. 6957.
[114]. Universities
Australia (UA), ‘We
can’t afford to lose the education investment fund’, UA website, 23
February 2017.
[115]. Group
of Eight (Go8), Submission
to the Senate Standing Committee on Economics, Inquiry into the Medicare
Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 and 10
related bills [provisions], 8 September 2017, pp.2–3.
[116]. Regional
Universities Network (RUN), ‘Submission
to driving innovation, fairness and excellence in Australian higher education’,
2016, p. 9, RUN website.
[117]. Explanatory
Memorandum Medicare Levy Amendment (National Disability Insurance Scheme
Funding) Bill 2017 [and related Bills], p. 5.
[118]. Future
Fund, ‘Our funds’,
Future Fund website.
[119]. Summarised
from ANAO, Administration
of Grants from the Education Investment Fund, Audit report, 37,
2012–13, ANAO, Barton, ACT, 2013, p. 114. The 2008 round was funded from the EIF,
and is often referred to as the first round of EIF funding, however the round
was launched and assessed under the predecessor Higher Education Endowment
Fund Act 2007. A full account of the EIF funding components prepared by the
Department of Finance is available at Finance, ‘Education
investment fund – approved projects’, Finance website.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.
Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.