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1996-97
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
SUPERANNUATION CONTRIBUTIONS SURCHARGE (APPLICATION TO THE COMMONWEALTH) BILL 1997
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Treasurer, the Hon Peter
Costello, MP)
80795 Cat. No. 96 7249 4 ISBN 0644 498323
This Bill forms part of a package of legislation designed to give a legislative framework for the introduction of a superannuation contributions surcharge for high income earners. The other components of the legislative package are: the Superannuation Contributions Surcharge (Assessment and Collection Bill) 1997, the Superannuation Contributions Surcharge Imposition Bill 1997, the Termination Payments Surcharge (Assessment and Collection) Bill 1997, the Termination Payments Surcharge Imposition Bill 1997, the Superannuation Contributions Surcharge (Consequential Amendments) Bill 1997 and the Superannuation Contributions Surcharge (Application to the Commonwealth - Reduction of Benefits) Bill 1997.
Date of effect: 20 August 1996
Proposal announced: The introduction of the superannuation contributions surcharge for high income earners was announced by the Government in the 1996-97 Budget and was incorporated in the Treasurer's Press Release No. 87 of 20 August 1996 entitled "Superannuation Reform."
Financial impact: It is estimated that the revenue impact of the package of legislation giving effect to the surcharge will be $434 million in 1997-98, $500 million in 1998-99 and $526 million in 1999-2000.
Compliance cost impact:
Full details of the compliance costs associated with the surcharge measures are contained in the compliance cost statement in the Explanatory Memorandum to the Superannuation Contributions Surcharge (Assessment and Collection) Bill 1997.
1.1 This Bill provides for the notional application of superannuation contributions surcharge on the surchargeable contributions of members of non-contributory Commonwealth superannuation schemes. The purpose of the Bill, together with the Superannuation Contributions Surcharge (Application to the Commonwealth - Reduction of Benefits) Bill 1997, is to cover the application of the superannuation contributions surcharge to Commonwealth superannuation arrangements for the Judiciary and to other similar Commonwealth superannuation arrangements.
1.2 When the Bill is enacted it will be called the Superannuation Contributions Surcharge (Application to the Commonwealth) Act 1997. [Clause 1]
1.3 The Act is to commence on the day it receives the Royal Assent. [Clause 2]
1.4 Terms used in the Superannuation Contributions Surcharge (Application to the Commonwealth) Bill 1997 are defined in the Superannuation Contributions Surcharge (Assessment and Collection) Bill 1997 and are explained in the Explanatory Memorandum to that Bill. [Clause 3]
1.5 The Bill applies if:
· the trustee of an unfunded defined benefits superannuation scheme is an officer, authority or agent of the Commonwealth; and
· the trustee would be liable to pay superannuation contributions surcharge on superannuation contributions for a financial year for a member of the scheme if he or she was not an officer, authority or agent of the Commonwealth; and
· there are no contributed amounts payable to the trustee for or by the member under the scheme - that is, the scheme is a wholly unfunded scheme.
[Clause 4]
1.6 If the Bill applies to a trustee because the circumstances outlined in paragraph 1.5 are satisfied, the trustee is taken not to be an officer, authority or agent of the Commonwealth in the trustee's capacity as trustee of the scheme. [Clause 5]
1.7 The Minister for Finance may give any written directions to the trustee that are necessary or convenient to be given for discharging the trustee's liability to pay the surcharge. In particular, the Minister for Finance can give directions in relation to the transfer of money within the Public Account.
1.8 The trustee must comply with any directions by the Minister for Finance which have effect despite any other law of the Commonwealth.
[Clause 6]
1.9 Compliance by the trustee with directions given by the Minister for Finance is taken to discharge the trustee's liability to pay the surcharge. [Subclause 7(1)]
1.10 Compliance with this clause does not constitute a payment which is a reduction of a member's benefit for the purposes of clause 34 of the Superannuation Contributions Surcharge (Assessment and Collection) Bill 1997. This ensures that the recovery of surcharge liability from Commonwealth recipients is governed by clause 4 of the Superannuation Contributions Surcharge (Application to the Commonwealth - Reduction of Benefits) Bill 1997. [Subclause 7(2)]