Tuesday, 20 June 2017
Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Streamlining and Other Measures) Bill 2017; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
This bill amends the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 to implement a streamlined and simplified foreign investment fee framework.
This is part of the coalition government's actions to ensure we have a foreign investment regime that meets community expectations, appropriately scrutinises applications but also balances these needs with supporting foreign investment that is good for Australian jobs and investment.
This bill gives effect in part to regulatory reforms that the government is undertaking to ensure Australia's foreign investment framework is robust and operates efficiently.
Fees were introduced as part of the 2015 reform package to ensure that Australian taxpayers are not funding the cost of administering the system. Since this time, the government has sought ongoing feedback on how the reforms are working in practice. In response to stakeholder feedback, the government is simplifying the fee framework.
The amended fee framework will reduce complexity, achieve more equitable fee outcomes and minimise the regulatory burden on stakeholders, without compromising the integrity of the review system. The changes are broadly revenue neutral, ensuring that foreign investors continue to meet the costs of funding the system.
The fee framework will reduce the number of fee tiers for some categories and implement a standard fee for low, medium and high value acquisitions. The new fee structure will also legislate some existing discretionary fee waiver arrangements to provide a more transparent and consistent approach.
The changes to the framework are not intended to encourage or discourage any specific investment category, but instead aim to ensure fees payable for different investment categories are applied on a more consistent basis for like transactions.
The bill will also introduce a 10 per cent fee increase for residential property applications to fund the establishment of the Critical Infrastructure Centre.
Full details of the measure are contained in the explanatory memorandum.
I do not think anyone has ever been as pleased as the Minister for Finance to see a message from the House. I do not think we all understood how happy we would be to see the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Streamlining and Other Measures) Bill 2017 since it arrived this morning. I think it is worth commenting on the fact that more than 20 bills have passed this chamber in the last two or three days. The Senate has been hard at work doing its job.
I do rise to speak in support of this bill. The bill gives effect to the government's 2017-18 budget measure to streamline fees for foreign investment in business. The bill intends to simplify the foreign investment fee framework, minimise regulatory burden and allow the foreign investment framework to operate more efficiently. From 1 July 2017, a series of fees will be modified, with increases due to indexation and the creation of new fee tier structures as well as the simplifying of existing fee tier structures involved. These changes will simplify and streamline the existing fee structures in the fees act, and better align fees payable with consideration paid to the relevant acquisition through a simplification of fee tiers and the introduction of flat fees for various acquisition types. Stakeholders have noted that different fees for different transaction categories have created complexities and caused delays in ascertaining the correct fee, which in turn delays processing. Some acquisitions are subject to multitiered fees—for example, agricultural land—and other transactions are subject to flatter fee type tiers such as with business acquisition like the acquisition of mining or production tenements. Further, a number of low-value transactions are subject to fees disproportionate to the value of the transaction.
According to the explanatory memorandum, the amendments are informed by a public consultation process and stakeholder feedback, and they implement the preferred option of a flatter fee structure and legislated fee-relief arrangements. The fee regulation will also be amended to give effect to the changes to simplify the commercial fees framework. The explanatory memorandum to the bill further states that amendments to streamline and simplify the commercial fee framework will not apply to the framework for residential property. However, there are amendments that increase residential property fees, which are said to fund the implementation of the Critical Infrastructure Centre.
The changes to the fee framework are broadly revenue neutral, with a small cost to revenue of $400,000 over the forward estimates. Some examples of fee changes under the bill include the fee for applying for an exemption certificate for new dwellings that will increase from $25,000 to $25,700. There will be a 10 per cent increase to the six-monthly fee paid by developers for developing new dwelling acquisitions made by foreign persons under the exemption certificate provided the consideration for each new dwelling is $10 million less. The fees applying for an exemption certificate for foreign persons will be streamlined into a single fee of $35,000 from the current two-tier structure of $25,000 for consideration of purchases less than $1 billion and $100,000 for consideration for purchases more than $1 billion.
Labor will always support sensible streamlining measures and a robust investment framework. I presume that there will be other speakers to this bill, because my comments are rather brief. I am going to leave it there. I think all of us are very happy to have seen the message arise and for this bill to come before the Senate, none more so than the government, who—I do not know how—have managed to stuff up their program so the Senate almost ran out of business just before.
That was a very unkind remark by Senator Gallagher. I have been extremely grateful for the great level of cooperation across the chamber. I think what the chamber has shown—and I include all parties in this, and all those represented in the chamber right now, in particular people like Senator Gallagher and, indeed, Senator Whish-Wilson—is that we have all been working together exceptionally well. I think we have shown up our colleagues in the House of Representatives on all sides of parliament, and I think that, as a Senate, we should be proud of the fact that we have proven that we can be more efficient in passing legislation through this place than our colleagues in the other place.
Specifically, in relation to the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Fee Streamlining and Other Measures) Bill 2017, I would like to thank Senator Gallagher for her contribution to this debate. This bill amends the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 to implement a streamlined and simplified foreign investment fee framework. In particular, this bill gives effect to regulatory reforms that the government is undertaking to ensure the foreign investment framework for Australia is robust and that it operates efficiently. The amended fee framework will reduce complexity, achieve more equitable fee outcomes and minimise the regulatory burden on stakeholders. The changes are broadly revenue neutral, ensuring that foreign investors continue to meet the cost of funding the system. The fee framework will reduce the number of fee tiers for some categories and implement a standard fee for low-, medium- and high-value acquisitions, and I commend the bill to the Senate.
Question agreed to.
Bill read a second time.