The Senate’s 'freight train' final sitting of the year

The Senate pushed through 32 Bills on the last sitting day of the calendar year clearing the way for an election.

The Government secured the passage of 32 Bills on the last sitting day of the calendar year with the support of The Greens. For their support, The Greens secured electrification upgrades to 50,000 social homes, and removed support for coal, oil and gas under Future Made in Australia and commercial investments and programs of Export Finance Australia.

Not on the Senate Bill freight train was Div 296 - the $3m tax on earnings in a superannuation fund that was announced to commence from 1 July 2025. A Bill that is unlikely to see the light of day pre-election.

And, the extension of $20,000 instant asset write-off by 12 months until 30 June 2025 was removed at the last minute.

Among the Bills passed were a number relevant to accountants and advisers:

• Objective of superannuation enshrined
• Foreign resident capital gains withholding, change in tax amendment periods for SMEs, and ATO able to retain refunds
• Anti-money laundering Bill draws in professional services
• Aged care Bill changes funding structure
• Build to rent incentives
• Restructuring the Reserve Bank of Australia

Objective of superannuation enshrined

Superannuation (Objective) Bill 2023 – without amendment

The Objective Bill enshrines the objective of superannuation in legislation: The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way (the objective).

This requires that policy makers assess the compatibility of any proposed changes to super against the objective.

Foreign resident capital gains withholding, change in tax amendment periods for SMEs, and ATO able to retain refunds

Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Bill 2024

Amongst other reforms:

• Foreign resident capital gains withholding payments regime to increase the withholding rate from 12.5% to 15& and remove the threshold before which withholding applies.
• Allows employers to make single touch payroll declarations for extended periods.
• Provides the Commissioner of Taxation with a power to retain tax refunds for a 90-day period to enable the commissioner to obtain financial institution details for the refund to be paid into, and 
• Extends the time in which small or medium business taxpayers may apply to have a tax assessment amended.

Anti-money laundering Bill draws in professional services

Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 – with amendment

Amongst other reforms:

• introduces new designated services into the AML/CTF Act, meaning that lawyers, accountants, and real estate agencies (among others) who provide such services would be required to comply with AML/CTF obligations. An amendment extends the definition of ‘ qualified accountant ’ in section 5 of the AML/CTF Act to include a member of the Institute of Public Accountants.
• introduces a new ‘reporting group’ structure, which creates mandatory obligations and enhanced liability for lead entities in reporting groups
• regulates the treatment of AML/CTF information subject to legal privilege, including by requiring reporting entities to set out privilege claims in a new form
• amends the ‘tipping off offence’, and updating authorised entities who can disclose AUSTRAC information to foreign governments and agencies
• introduces new coercive powers, including a new examination process which would allow AUSTRAC to obtain information and documents to make enforcement decisions, and
• includes a ‘Henry VIII clause’ which would allow the Minister, through legislative instrument, to make transitional rules within 4 years of commencement that modify the application of primary legislation (including the AML/CTF Act).

Aged care Bill changes funding structure

Aged Care (Consequential and Transitional Provisions) Bill 2024 – without amendments

• A series of reforms that fundamentally change the way in which aged care is funded in Australia and the contribution made by those receiving care. At its heart, the reforms seek to make aged care industry viable in an environment where losses are common. The Bill creates a simplified, rights-based legislative framework that comprises one main piece of primary legislation to establish and regulate the aged care system. The primary legislation is supported by a single set of subordinate legislation (“the Rules”).

Build to rent incentives

Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024

Amendments include:

• Incentives for investors to support the construction of new ‘build to rent ‘developments by increasing the capital works deduction rate to 4% per year and reducing the final withholding tax rate on eligible fund payments from eligible managed investment trust investments to 15%.
• Amends TAA 1953 to impose a new reporting obligation on certain large multinational enterprises.

Capital Works (Build to Rent Misuse Tax) Bill 2024

• Ensures the integrity of the build to rent tax concessions by providing for the levy of a misuse tax in the event that an entity improperly claims one or both of the tax concessions.

Restructuring the Reserve Bank of Australia

Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 – without amendment

Implements changes to the structure and function of the RBA:

• Removes the Government’s power to override monetary policy decisions of the RBA and remove the RBA’s power to determine the lending policy of banks.
• Clarifies the objectives and functions of the RBA - to promote the economic prosperity and welfare of the people of Australia, both now and into the future.
• Replaces the existing Reserve Bank Board with:
  • A Monetary Policy Board - responsible for monetary policy and financial system stability policy.
  • Governance Board - oversees the governance of the RBA, as well as determining its policies that are not within the remit of the Monetary Policy Board or Payments System Board

M&A reform

Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 – without amendment

Reforms Australia’s merger rules introducing a mandatory notification system for mergers above certain thresholds, which will need to be approved by the Australian Competition and Consumer Commission (ACCC).

There will be three key thresholds:

• Any merger will be looked at if the Australian turnover of the combined businesses is above $200 million, and either the business or assets being acquired has Australian turnover above $50 million or global transaction value above $250 million.
• The ACCC will look at any merger involving a very large business with Australian turnover more than $500 million buying a smaller business or assets with Australian turnover above $10 million.
• To target serial acquisitions, all mergers by businesses with combined Australian turnover of more than $200 million where the cumulative Australian turnover from acquisitions in the same or substitutable goods or services over a 3 year period is at least $50 million will be captured, or $10 million if a very large business is involved.