APPENDIX 2
Treasury's answers to written questions on notice
Question:
1.
The committee would appreciate the
Treasury commenting on provisions that were in the Exposure Draft of this bill,
which would amend the definitions and mechanics of paying dividends. These
provisions were omitted from the final bill, as was noted by some submitters to
the inquiry:
- The
Australian Shareholders' Association (ASA) commented that its submission to the
Exposure Draft process '...advised that ASA had no objections to the proposed
changes to the definitions and mechanics of paying dividends. These have been
deleted from the bill under consideration. The business and investment
community would be interested in the reasons for this change'. (Submission 2,
p. 1).
-
The
Law Council also noted this omission, and submitted that reform of dividend law
should be undertaken, as '...effective reform of Australia's highly
unsatisfactory dividend law would have made a much greater contribution to
efficient regulation and removal of red tape than any of the other reforms that
have survived into the present bill'. (Submission 11, p. 1).
Answer:
Some stakeholders raised
significant concerns that the proposed amendments to the test for the payment
of dividends would not reduce the regulatory burden on businesses.
The provisions were omitted
from the final bill to give the Government more time to consider alternative
approaches which will balance the need for certainty and simplicity for
business, protections for investors and the implications for the tax treatment
of dividends.
Question:
2.
The committee would appreciate the
Treasury commenting on the following concerns raised by the Australian
Charities and Not-for-Profits Commission (Submission 7, p. 2):
-
In order to fully achieve the policy intent of the proposed
changes for Charitable CLGs, the ACNC recommends that an additional exemption
be provided in sections 327A(1A) and 327B(1A) to account for CLGs that are (or
will become) registered charities, and would or do fall within the definition
of 'small' or 'medium' registered entity under the ACNC Act.
For example, the
proposed section 327B(1A) could be amended to include two additional
categories:
- the company is a 'small registered entity' under the ACNC
Act; or
- the company is a 'medium registered entity' under the
ACNC Act.
This
would ensure that Charitable CLGs benefit from the same red tape reduction as
non-charitable CLGs.
Answer:
The additional exemption
proposed by the ACNC does not seem to be inconsistent with the policy intent of
the bill, however any amendment to the bill is a matter for the Government.
As the committee would be
aware, prior to the 2013 election the Government made
a commitment to abolish the ACNC. On 19 March 2014 the Government introduced
the first of two bills to repeal the ACNC (the Australian Charities and
Not-for-profits Commission (Repeal) (No.1) Bill 2014).
In July 2014 the Department
of Social Services undertook a public
consultation process
on the proposed replacement arrangements for the ACNC. The Government is
considering the results of that feedback.
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