Current legislative and regulatory affairs

Current consultations

Delivering Better Financial Outcomes Tranche 1 – Draft Regulations

The Treasury is consulting on the Treasury Laws Amendment (Delivering Better Financial Outcomes) Regulations 2024 (draft regulations). These are consequential amendments to support the implementation of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 (the Amending Bill) and delivery of the first tranche of the government’s response to the Quality of Advice Review.
Its purpose is to support increased access to affordable financial advice with the Regulations proposing to:

Support written information or documentation requirements for the purposes of section 99FA of the Superannuation Industry (Supervision) Act 1993 to continue to be met electronically.
Remove requirements related to Fee Disclosure Statements, update record keeping obligations for new consent requirements and remove references to civil penalties which are removed in the Amending Bill.
Align requirements for Financial Services Guides and Website Disclosure Information and make other consequential amendments.
Streamline the regulations for conflicted remuneration.
Ensure the informed consent requirements apply for benefits given in relation to a general insurance product where personal advice is provided.

Due date: 8 July 2024

Legislation before parliament

Net Zero Economy Authority Bill 2024

The Bill proposes to establish the Net Zero Economy Authority. The Climate Change Act 2022 sets out Australia’s commitment to reducing net greenhouse gas emissions to 43 per cent below 2005 levels by 2030 and to zero by 2050. All levels of government, and the private sector, will need to work in a more coordinated way to catalyse the investment needed to support the decarbonisation of existing emissions-intensive industries, support the establishment of new industries and the creation of new jobs and other opportunities arising from the net zero transformation. The NZEA Bill would create a new government entity with the mandate, functions and powers that enable it to ensure that Australia’s transition to net zero emissions is orderly and positive. The Authority’s functions include:

consulting and cooperating with persons, organisations, and governments to support Australia’s transition to a net zero emissions economy; and
facilitating public and private sector participation and investment in net zero transformation initiatives, including referring matters to specialist investment vehicles and other entities; and
supporting workers in emissions-intensive industries to access new employment or improve their employment prospects; and
supporting and delivering educational and promotional initiatives to promote an understanding of, and encourage participation in, Australia’s transition to a net zero emissions economy.

Referred to the Senate Finance and Public Administration Legislation Committee. Report tabled 13 May 2024. The committee recommends that the bills be passed as soon as practically possible.

Status of legislation: Before the House of Representatives. Third reading agreed to 4 June 2024.

Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023

Introduced with the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, the bill imposes a tax rate of 15 per cent for superannuation earnings corresponding to the percentage of an individual’s superannuation balance that exceeds $3 million for an income year. Referred to Committee 7 December 2023. Senate Economics Legislation Committee report tabled 10 May 2024. The committee recommended the passage of the Bills.

Status of legislation: Before the House of Representatives. Second reading debated 16 May 2024.

Superannuation (Objective) Bill 2023

Enshrines the objective of superannuation in legislation and requires a statement of compatibility to be included in the explanatory materials accompanying bills and regulations relating to superannuation. Senate Economics Legislation Committee Report published March 2024

Status of legislation: Before the Senate. Second reading moved 20 March 2024.

Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024

Schedule 1 to the Bill delivers tranche 1 of the Government’s Delivering Better Financial Outcomes package, including the initial response to the Quality of Advice review. Tranche 1 includes amendments that will provide legal certainty for the payment of financial adviser fees from a member’s superannuation fund account and remove red tape that currently adds to the cost of financial advice with no benefit to consumers. Part 1 of Schedule 1 to the Bill:

implements recommendation 7 of the 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry review by amending section 99FA of the SIS Act to facilitate better access to superannuation and retirement advice by clarifying the legal basis of existing practices in which superannuation trustees pay advice fees from a member’s superannuation account at the request of the member; and
amends the ITAA 1997 to provide legal certainty that payments of certain personal advice fees by a superannuation trustee from the member’s interest in the fund are deductible from the superannuation fund’s assessable income (to the extent they are not incurred in gaining or producing the fund’s exempt or non-assessable non-exempt income) and are not a superannuation benefit for the relevant members.

A supplementary explanatory memorandum was issued which includes a number of additional points in relation to the oversight of advice fees (sec 99FA). Key phrases in relation to oversight of advice fees deducted from member accounts are:

Updated 1.17 to include: “Trustees are expected to apply appropriate oversight controls to ensure that advice fees are consistent with the following requirements”

New section 1.18: Consistent with meeting their obligations under the current 99FA, trustees should have in place robust assurance processes to satisfy themselves that advice deductions from members’ superannuation accounts comply with their legal obligations. This may include random or risk-based sampling of advice.

Senate Economics Legislation Committee; report due 20 June 2024.

Status of legislation: Before the House of Representatives. Third reading agreed to 29 May 2024.

Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024

The bill introduces two broad reforms. The first reform introduces a crisis management and resolution regime for Australia’s financial market infrastructure. Alongside this, the bill enhances the licencing, supervisory and enforcement powers of the Australian Securities and Investment Commission (ASIC) and the Reserve Bank of Australia (RBA), as well as making changes to roles and responsibilities of the Minister, the RBA and ASIC.

The second reform introduces mandatory climate-related financial disclosures for entities that meet one of the following requirements:

(a)the entity is required to lodge financial reports under Chapter 2M of the Corporations Act 2001 (the Corporations Act) and meets certain size requirements; or

(b)the entity has emissions reporting obligations under the National Greenhouse and Energy Reporting (NGER) scheme. These new disclosures will require the entities in question to make climate disclosures relevant to the sustainability standards made by the Australia Accounting Standards Board (AASB).

Senate Economics Legislation Committee issued its report on the Bill: Committee report 3 May 2024. The committee recommended that the Bill be passed.

Status of legislation: Before the House of Representatives. Third reading agreed to 6 June 2024.

Regulations under review

Senate Standing Committees on Economics

Improving consumer experiences, choice, and outcomes in Australia’s retirement system

On 27 November 2023, the Senate referred an inquiry into improving consumer experiences, choice, and outcomes in Australia’s retirement system to the Senate Economics References Committee for inquiry and report by 30 June 2024. On 26 March 2024, the Senate approved an extension to report to 30 June 2025 for this inquiry. On 9 May 2024, the committee presented an interim report. On 16 May 2024 the committee agreed to receive further submissions. The closing date for the committee receiving submissions is 28 June 2024.

Historical legislative and regulatory affairs
Digital ID Bill 2023
Introduced with the Digital ID (Transitional and Consequential Provisions) Bill 2023, the bill: establishes an accreditation scheme for entities providing digital ID services; expands the Australian Government Digital ID System; and provides for privacy safeguards and a range of governance arrangements, including establishing the Australian Competition and Consumer Commission as the Digital ID Regulator and expanding the role of the Information Commissioner to regulate privacy protections for digital IDs. The Bill aims to provide individuals with secure, convenient, voluntary and inclusive ways to verify their identity for use in online transactions with government and businesses that use digital ID.
Status of legislation: Received Royal Assent 30 May 2024. The Act will commence by 1 December 2024.

Attorney-General’s Portfolio Miscellaneous Measures Bill 2023
Amends the Australian Securities and Investments Commission Act 2001, Corporations Act 2001, Judiciary Act 1903, National Consumer Credit Protection Act 2009 and Superannuation Industry (Supervision) Act 1993 to confer jurisdiction on the Federal Court of Australia to hear and determine a range of summary and indictable offences relating to conduct within the remit of the Australian Securities and Investments Commission.
It will insert new section 201A into the SIS Act to confer jurisdiction on the Federal Court to hear and determine a range of indictable offences under this section, including relating to victimisation against certain superannuation entity trustees; knowingly acting as trustee, investment manager of custodian, or as a responsible officer of body corporate who is fulfilling one of these roles, of a superannuation entity while disqualified; issuing or offering, or participating in the issuing or offering of, superannuation interests in public offer entities when not allowed; intentionally or recklessly refusing or failing to comply with certain requirements made by ASIC under the SIS Act; and concealing books relevant to an ASIC investigation.
Status of legislation: Passed both Houses of Parliament 28 May 2024.

Reforming Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime
The Attorney-General’s Department is consulting on further reforms to the AML/CTF regime, building on its first-round consultation held in 2023. The current consultation focuses on three main components: addressing vulnerabilities in sectors providing certain high-risk services (tranche two sectors), modernising digital currency and payments technology-related regulation, and simplifying, and modernising the AML/CTF regime. Feedback is sought on the merits and proposed design of the proposals, including how they can be practically implemented.
Due date 13 June 2024.

Delivering Better Financial Outcomes (Quality of Advice) – Recommendation 7
The Australian Taxation Office is seeking feedback on public advice and guidance needs for the new measure addressing financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993. In the Government’s Delivering Better Financial Outcomes Package – reducing red tape and other measures, Recommendation 7 sough to clarify the legal basis for superannuation trustees reimbursing a member’s financial advice fees from their superannuation account, and associated tax consequences. Division 2 of the exposure draft Treasury Laws Amendment (Delivering better Financial Outcome sand Other measures) Bill 2024, makes amendments to the Income Tax Assessment Act 1997 to ensure that financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993 are:
tax-deductible for the fund
not treated as superannuation benefits of the member.
The measure is proposed to have retrospective effect. The ATO is seeking feedback on whether there are priority issues where public advice and guidance is needed to help superannuation industry stakeholders understand how the new law applies to their circumstances.
Due date June 2024.

Modern Slavery Amendment (Australian Anti-Slavery Commissioner) Bill 2023
Amends the Modern Slavery Act 2018 to establish the Australian Anti-Slavery Commissioner as an independent statutory office holder within the Attorney-General’s portfolio to provide an independent mechanism for victims and survivors, business, and civil society to engage on issues and strategies to address modern slavery. The Commissioner’s functions would allow the Commissioner to work with Government, business and civil society to support compliance with the Act, improve the transparency of supply chains, and help fight modern slavery in Australia and abroad. The Senate Legal and Constitutional Affairs Legislation Committee report recommends passage of the legislation. Committee report (28/02/2024)
Status of legislation: Received Royal Assent 11 June 2024.

On 2 April 2024, the Parliamentary Joint Committee on Corporations and Financial Services resolved to commence an inquiry into financial services regulatory framework in relation to financial abuse. The terms of reference outline the parameters of the inquiry which at a high-level include:
The prevalence and impact of financial abuse including approaches taken by financial institutions to identify, record and report financial abuse.
The effectiveness of existing legislation, common law, and regulatory arrangements that govern the ability of financial institutions to prevent and respond to financial abuse.
Potential areas for reform, such as prevention, protection, and proactive systems.
Steps that might be taken to support financial institutions to better detect and respond to financial abuse.
The role of government agencies in preventing and responding to financial abuse.
The funding and operation of relevant advisory and advocacy bodies.
Due date for written submissions by 14 June 2024.

Australian Prudential Regulation Authority (Confidentiality) Determination No. 1 of 2024 (FED)
This legislative instrument determines that certain information provided to APRA (Australian Prudential Regulation Authority) by financial sector entities under specified reporting standards is non-confidential and can be disclosed publicly.
The instrument is divided into three parts:
Part 1 covers reporting documents that are entirely non-confidential.
Part 2 covers reporting documents that are partly non-confidential.
Part 3 covers information related to MySuper products that is non-confidential.
The purpose is to promote transparency, best practices, and accountability in the superannuation industry by enabling the disclosure of non-confidential information to regulators, policymakers, industry, researchers, and analysts.
The non-confidential information covers details like expenses, asset allocation characteristics, structure, fees and costs for superannuation products and funds. APRA conducted public consultations and considered industry feedback before finalizing the determination, addressing concerns around disclosure of commercially sensitive data.
The instrument commences 8 June 2024.

Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2024 (FED)
The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2024 determines the interest rates and methods for calculating interest rates to adjust superannuation entitlements of separated or divorced spouses and de facto couples under certain orders or agreements that split future superannuation benefits as part of property settlements under the Family Law Act 1975.
The interest rates are used to annually adjust the “base amount” allocated or specified in the order or agreement until superannuation benefits become payable or the interest is split earlier.
The determination covers two types of superannuation interests:
Defined benefit superannuation interests, where benefits are linked to the member’s period of membership and salary. Interests in self-managed superannuation funds with no more than 6 members.
For the 2024-25 financial year, the interest rate for adjusting the base amount is determined to be 0.070 (7.0%), which is 2.5 percentage points above the percentage change in full-time adult ordinary time earnings for the year ending November 2023.
The determination also provides methods to calculate interest rates for adjustment periods less than 12 months within the 2024-25 financial year, as well as for adjustment periods spanning the 2023-24 and 2024-25 financial year.
The determination commences 1 July 2024.