Published Impact Analyses

In the 2011-12 Budget, the then Government announced a measure to abolish the entrepreneurs’ tax offset. The entrepreneurs’ tax offset was a non-refundable tax offset that was introduced in the 2005-06 Budget as additional assistance for very small, micro and home-based businesses in their early stages of development. It applied to assessments for income years commencing on or after 1 July 2005 and was abolished by the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2011 from 1 July 2012. The then Prime Minister granted an exceptional circumstances exemption for the Government’s tax reform agenda in response to the Australia’s Future Tax System (Henry) Review which included the abolition of the entrepreneurs’ tax offset. Consequently, a Post implementation Review was required to commence within one to two years of the abolition of the offset.

The Government has strengthened the Regulatory Impact Analysis framework with a focus on costing impacts on business, community organisations and individuals as part of a broader goal to reduce the burden of regulation. A new Australian Government Guide to Regulation (replacing the current Best Practice Regulation Handbook) will be issued in early 2014. In the interim, this guidance note details important changes to the Regulation Impact Statement (RIS) requirements which must be applied in addition to the requirements in the current handbook. Consequently, the handbook must be read in conjunction with this guidance note. Some of the key changes to the RIS requirements are:

On 12 December 2013 the Department of Industry released a Consultation Regulation Impact Statement (RIS) on electric storage hot water heaters. The RIS examines various policy options to streamline regulations and reduce the operating costs of electric storage hot water heaters to consumers. The options presented in the RIS focus on the electric storage water heater market with special consideration for electric storage units when they are used as part of a solar water heater or heat pump water heater system. The RIS notes that the term ‘electric storage water heater’ covers three main types of water heaters: conventional electric storage water heaters, heat pump water heaters and electric-boosted solar water heaters.

On 13 December, the Legislative and Governance Forum on Food Regulation (‘the Forum’) announced a decision relating to the implementation of front-of-pack nutrition labelling scheme. The Forum had agreed to introduce the scheme earlier in 2013. The recent decision involved endorsing the ‘Health Star Rating’ algorithm that will be used to help develop the front-of-pack-labels, including the scheme’s treatment of dairy foods.

In the 2011-2012 Budget the Government announced a change to the statutory formula method for determining the taxable value of car fringe benefits. The measure implemented a recommendation of the Australia’s Future Tax System Review. The then Prime Minister granted an exceptional circumstances exemption for his Government’s tax reform agenda in response to the Australia’s Future Tax System (Henry) Review which included changes to the car fringe benefit rule.  Consequently, a Post-Implementation Review was required to commence within one to two years of the reform of the car fringe benefit rule. The measure applies a single statutory rate of 0.20 to a car’s value to determine the annual taxable value of car fringe benefits. Prior to the 2011 reforms, the statutory rate comprised a sliding scale based on the number of kilometres travelled by the car for a year rather than a single statutory rate.

In the 2009-10 Budget, the Government announced a measure to alter eligibility for tax concessions for employee share schemes. The then Prime Minister granted an exceptional circumstance exemption from preparing a Regulation Impact Statement for this measure. Consequently, a Post‑implementation Review (PIR) was required to commence within one to two years of the implementation of changes to the eligibility criteria. An employee share scheme (ESS) is a scheme under which shares or options (ESS interests) in a company are provided to an employee in relation to employment. These shares or options are considered as income when acquired below the market price. Under the previous arrangements, employees could choose one of two tax concessions on the discount they receive from an employer under a qualifying employee share acquisition scheme: up-front or tax-deferred concession.

In the 2009-10 Budget, the Government announced a measure to alter the application of non-commercial loss rules in relation to high-income earners. The then Prime Minister granted an exceptional circumstance exemption from preparing a Regulation Impact Statement for the measure. Consequently, a Post‑implementation Review was required to commence within one to two years of the implementation of changes to the rules. Non-commercial loss rules were first introduced in 2000. These rules require that losses from a business be quarantined to the business activity and not be offset against other income. That is, the losses must be carried over and offset against future income from the business activity. However, there are exemptions that allow a taxpayer to apply the losses to their other income if they satisfy at least one of four objective tests (or if the Commissioner of Taxation exercises discretion).

The Government has made a commitment to reduce the regulatory burden on businesses, community organisations and individuals.  On 20 December 2013 the Government announced changes to the regulation of the financial products and services sector, with the aim of reducing the regulatory burden for the financial advice sector.  Australia’s financial services industry is a significant part of the Australian economy.  It employs more than 400,000 people and is expected to continue growing, driven by Australia’s ageing population and increasing pool of superannuation funds.  The key reforms include:

On 20 November 2013, the Social Services and Other Legislation Amendment Bill was introduced into the Parliament. The Bill includes a proposed amendment to the Paid Parental Leave Act 2010. The proposal removes the current mandatory requirement for employers to administer parental leave payments on behalf of the Government. The intent is to relieve the administrative burden on business, especially small business, many of whom regard the ‘paymaster’ role as unnecessarily burdensome and without commensurate benefits. (The average cost identified by all organisations to administer the paid parental leave scheme was estimated at $1,783.) However, employers who wish to continue making such payments can ‘opt in’ to do so, and are not otherwise disadvantaged by this change.

On 13 December 2013 the Standing Council on Energy and Resources (SCER) endorsed the Decision Regulation Impact Statement (RIS) for Gas Transmission Pipeline Capacity Trading and agreed to pursue enhancements to information provision and standardisation of contractual terms and conditions. These measures are aimed at reducing transaction costs to facilitate pipeline capacity trading. Australia’s eastern gas supply market is connected by a series of gas transmission pipelines, which vary in terms of both capacity and utilisation.  Some domestic gas transmission pipelines are often operating near capacity.