New Commonwealth Tax and Superannuation Legislation Sunsetting Draft Regulation

The Commonwealth has recently released the draft version of the Tax and Superannuation Legislation Amendment (Sunsetting Measures) Regulation 2014 (on 17 December 2014), as part of their policies to reduce red tape, deliver clearer laws, and align existing legislation with current government policy by requiring ongoing review of legislative instruments.

Background to the Legislation

Most jurisdictions in Australia have automatic sunsetting regimes for legislative instruments. The Commonwealth legislative instrument sunsetting regime is set out in Part 6 of the Legislative Instruments Act 2003. This regime provides for instruments to sunset 10 years after their registration on the Federal Register of Legislative Instruments unless the instrument falls within certain special categories of legislative instruments, the relevant Act modifies the sunsetting regime or Parliament passes a motion to extend the life of the instrument (‘rolling over’ the instrument).

In most cases, Australian Government agencies must plan for sunsetting well in advance of an instrument’s sunset date, as the process to review an instrument and implement any review recommendations for each instrument can be lengthy.

An initial review of instruments that are due to sunset is an essential part of the process. The review is to inform the rule-maker’s decision about whether the instrument should be left to sunset, be remade with amendments, be remade without amendments or be rolled over by the Parliament.

While instruments that are clearly spent or redundant do not require a thorough review, where it is not immediately apparent that an instrument serves no further function, a more comprehensive examination needs to be undertaken.

Instruments Amended and Reviewed

According to the draft regulation, the sunsetting measures are aimed to review the following regulations:

• Fringe Benefits Tax Regulations 1992;
• A New Tax System (Goods and Services Tax) Regulations 1999;
• A New Tax System (Wine Equalisation Tax) Regulations 2000;
• Income Tax (Excluded STBs) Regulations;
• Income Tax Regulations 1936;
• Product Grants and Benefits Administration Regulations 2000;
• Superannuation Contributions Tax (Assessment and Collection) Regulations 1997;
• Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Regulations 1997;
• Superannuation (Government Co-contribution for Low Income Earners) Regulations 2004;
• Superannuation Guarantee (Administration) Regulations 1993;
• Superannuation (Unclaimed Money and Lost Members) Regulations 1999; and
• Taxation Administration Regulations 1976.

Accompanying Bill Amendments Currently in Parliament

As part of Treasury’s initial review of the Income Tax Regulations 1936, a number of provisions in the principal law and regulations were identified as duplicative, inoperative or spent. A number of provisions contained in the regulations were also identified as being more appropriately incorporated into the primary law.

The Government introduced the Treasury Legislation Amendment (Repeal Day) Bill 2014 on 22 October 2014 to implement the first tranche of reforms resulting from the review. It has since passed the House of Representatives and been introduced to the Senate as of 3 December 2014.

These draft regulations make similar changes to those contained in the Bill by consolidating duplicated regulations, repealing spent or redundant regulations and updating and modernising older regulations.

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Draft Tax and Superannuation Legislation Amendment (Sunsetting Measures) Regulation 2014 as reproduced on TimeBase LawOne