Chapter 1Introduction

Referral of the inquiry

1.1On 30 October 2025, the Senate referred the provisions of the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 (the bill) to the Senate Economics Legislation Committee (the committee) for inquiry and report by 19 November 2025.

1.2The first chapter of this report outlines the purpose and provisions of the bill. Chapter two of the report outlines views on the bill, as well as providing the committee view and recommendation.

Purpose of the bill

1.3The bill proposes to make amendments to several Acts to implement, or continue, a broad range of measures relating to corporate disclosure, small business taxation, charities regulation, energy market protections and oversight of financial regulators.

1.4In his second reading speech of the bill, the Hon. Dr Andrew Leigh MP, Assistant Minister for Productivity, Competition, Charities and Treasury, said the bill contains ‘measures designed to strengthen confidence in our markets, improve the way regulators operate, and support long-term economic growth.’[1]

Provisions of the bill

1.5The bill contains seven schedules which propose to amend various pieces of legislation. They are discussed in detail below.

Schedule 1 – Enhanced disclosure of ownership of listed entities

1.6Schedule 1 of the bill makes changes to chapters 6 and 6C of the Corporations Act 2001 (the Corporations Act) to ‘enhance the substantial holding and tracing notice regimes, which, amongst other things, govern the disclosure of beneficial ownership for listed entities.’[2]

1.7These changes form part of the Government’s changes to multinational tax laws to improve corporate transparency and address tax avoidance.[3] Part of this suite of reforms includes the implementation of a public register of beneficial ownership to show who controls companies and other legal vehicles in Australia.[4]

1.8According to the Explanatory Memorandum (EM), these changes will having the following benefits:

discouraging the use of complex corporate structures to obscure tax liabilities and conceal financial crime;

increasing the tools available to regulators in performing their functions;

increasing information access for the public; and

allowing investors to make decisions more efficiently, by increasing their ability to conduct due diligence on prospective acquisitions.[5]

1.9Schedule 1 seeks to fill a gap in the current law where notification of changes in ownership of equity derivatives is only partially covered by the Corporations Act.[6]

1.10Equity derivates are:

…financial arrangements where the value of the arrangement, or the consideration that must or may be provided at a future date, is at least partly derived from one or more underlying equity securities. Equity derivatives may include instruments such as swaps, forwards, futures and options.[7]

1.11Equity derivates are either physically settled (one party has a right to receive the underlying securities themselves) or cash settled (one party has a right to receive a cash payment linked to the value of the securities).

Current law

1.12As mentioned above, Schedule 1 seeks to make changes to the transparency regime for beneficial ownership of listed entities.[8] Currently this is governed by a combination of guidance provided by the Takeovers Panel (Guidance Note 20) and chapter 6C of the Corporations Act.[9]

1.13Under the Corporations Act, persons with substantial holdings of a listed company are required to provide both the company and the relevant market operator details about their own and their associates’ relevant interests, called a ‘substantial holding disclosure.’ This requirement comes into play in situations when:

the person begins or ceases to have a substantial holding in the company;

the person has a substantial holding in the company and there is movement of at least one per cent in their holding; or

the person makes a takeover bid for securities of the company.[10]

1.14Generally, substantial holding disclosures are currently only required to take account of interests arising from physically settleable equity derivatives, and ‘only to the extent that the counterparty to the derivative has a relevant interest in securities underlying the derivative.’[11]

1.15The Australian Securities and Investments Commission (ASIC) and listed companies are empowered under the Corporations Act to direct a member of the company in question to disclose the full details of their own interest in the company’s shares, as well as the names and addresses of others who have a relevant interest in any of those shares. These directions are called ‘tracing notices.’[12] Listed companies are required to keep tracing notice registers which are available to members of the entity to inspect free of charge.[13]

1.16A person can be exempted from these requirements through sections 655A and 673 of the Corporations Act, which allows ASIC to issue a modifying instrument. Several of these instruments are currently in force.[14]

Changes made by the schedule of the law

1.17Schedule 1 of the bill will require persons to disclose the following derivative based interests to the market in the same way they are required to disclose other kinds of substantial holdings:

interests from physically settleable derivatives (regardless of whether the other party has a relevant interest in the underlying security);

interests from non-physically settleable derivatives; and

offsetting short positions (in certain circumstances).[15]

1.18This disclosure will be required for the above categories when the change in a person’s ownership of the holding changes by more than one percentage point. The person must also disclose this kind of holding at the time it is initially listed on a financial market.[16]

1.19The amendments also provide ASIC and listed entities with expanded powers relating to the tracing notices described above. Currently, ASIC can only issue tracing notices to:

members of an entity; and

persons named in previous disclosures (in response to a previous tracing notices) as having relevant interest in, or having given instructions about, securities.[17]

1.20The bill will expand the ability of ASIC and a listed entity to issue a tracing notice to persons suspected, on reasonable grounds, of having relevant interests in, or having given instructions about, an entity. Listed entities must base their ‘reasonable suspicion’ on information which has already been disclosed under Chapter 6C disclosures. ASIC is not bound by this limitation, however.[18]

1.21ASIC’s powers are also expanded to be able to make freezing orders against disclosable securities in a listed entity if a person has failed to comply with a substantial holding or tracing notice requirements.[19]

1.22The penalties for failure to comply with tracing notice provisions and substantial holding provisions have increased, with all maximum penalties for non-compliance doubled.[20] This has been done to align the offences in Chapter6C with other offence provisions in the Corporations Act, as well as reflecting the seriousness of the offence and act as a deterrent.[21]

1.23The changes in the bill will also expand the Chapter 6C disclosure requirements to entities formed outside Australia if they are listed on an Australian market.[22]

1.24Schedule 1 also makes changes to the requirements for listed entities to provide access to their tracing notice register. Tracing notice registers must now be open to journalists and academics for inspection free of charge. ‘Journalist’ and ‘academic’ are both defined through an employment-based test, requiring that journalists be a person working in a professional capacity for print, online or broadcast media and academics be a person working as a member of the academic staff of an educational institution.[23]

1.25This schedule of the bill also makes several minor and consequential amendments to the Corporations Act to improve readability, avoid duplication and ensure consistency throughout the Act.[24]

Consultation

1.26A consultation process was undertaken by the Department of the Treasury for Schedule 1 of the bill from November to December 2024. This consultation process received 21 submissions, including two confidential submissions.[25]

1.27Submitters to the consultation raised concerns about various matters, including the administrative burden to listed entities through changes made by the bill, potential double counting of beneficial interests (through treating cash-settled derivates as a form of beneficial ownership) leading to uncertainty in the corporate sector, and that the current regime under the Takeovers Panel Guidance Note 20 was already operating effectively.[26]

1.28The EM states that the amendments in Schedule 1 include responses to stakeholder feedback.[27]

Schedule 2 – Australian Charities and Not-for-profits Commission review Recommendation 17 – Secrecy Provisions

1.29This schedule of the bill makes changes to the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) relating to public disclosure of information relating to new and ongoing investigations.[28]

1.30These amendments are the result of a review into the Australian Charities and Not-for-profit Commission (ACNC) legislation released in 2018. The Strengthening for Purpose: the Australian Charities and Not-for-profits Commission Legislation Review (the ACNC Review) report found that providing the ACNC Commissioner with expanded powers to disclose information would increase public confidence in the not-for-profit sector and provide guidance to other charities about unacceptable behaviour.[29]

1.31Following this, the ACNC Review made the following recommendation (recommendation 17):

The Commissioner be given a discretion to disclose information about regulatory activities (including investigations) when it is necessary to protect public trust and confidence in the sector.[30]

1.32Under the current regime, an ACNC officer is prevented from disclosing ‘protected ACNC information’ relating to an ongoing or proposed investigation unless such a disclosure is in performance of the officer’s duties, is to an Australian government agency, the information is already lawfully publicly available, or there is consent for the disclosure.[31] ‘Protected ACNC information’ is defined as information obtained for the purposes of the ACNC Act, relating to the affairs of an entity and that identifies the entity.[32]

1.33Schedule 2 of the bill changes this to allow the ACNC Commissioner (the Commissioner) to authorise an officer to disclose:

(a)protected ACNC information describing an ongoing or proposed investigation where such disclosure would prevent or minimise the risk of significant harm; and

(b)whether the ACNC is carrying out an investigation into a suspected contravention or non-compliance by an entity, where information about the suspected contravention or non-compliance is already publicly available.[33]

1.34In both situations, the disclosure is subject to a ‘public harm test.’ This test operates as a safeguard, requiring that the Commissioner ‘must compare the harm likely to be caused by the disclosure to the harm that disclosure may prevent.’[34] The Commissioner’s decision is also not subject to merits and judicial review so that there can be a swift response which prevents further harm to the public.[35]

Schedule 3 – Frequency of Financial Regulator Assessment Authority reviews

1.35Schedule 3 of the bill amends the Financial Regulator Assessment Authority Act2021 (the FRAA Act) to reduce the frequency of Financial Regulator Assessment Authority (FRAA) reviews of ASIC and the Australian Prudential Regulation Authority (APRA) from once every two years, to once every five years.[36]

1.36The FRAA is an independent statutory body established following recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It performs regular capability reviews of ASIC and APRA.[37]

1.37After the first of the FRAA’s capability reviews were published in 2022 for ASIC and 2023 for APRA, the Government announced, in the 2023-24 Budget, that it would introduce legislation to reduce the FRAA review cycle to every five years.[38]

1.38According to the EM, these changes will allow for more comprehensive review processes for these financial regulators, as well as reducing the administrative burden on ASIC and APRA. The changes in the bill will also allow for there to be no requirement in the FRAA Act that there be members of the FRAA, to allow for periods between reviews where there FRAA has no members.[39]

Schedule 4 – Minor and technical amendments

1.39Schedule 4 of the bill makes minor and technical amendments to various pieces of Treasury portfolio legislation to ‘correct unintended drafting outcomes, update legislative references, simplify provisions and reduce red tape.’[40]

1.40The bills amended by Schedule 4 are:

The Competition and Consumer Act 2010 (the CCA);

the Corporations Act;

the Corporations (Aboriginal and Torres Strait Islander) Act 2006;

the Inspector-General of Taxation Act 2003 (the IGT Act);

A New Tax System (Goods and Services Tax) Act 1999 (the GST Act);

the Fuel Tax Act 2006;

the Taxation Administration Act 1953;

the Income Tax Assessment Act 1997; and

the Excise Act 1901 (the Excise Act).

1.41This schedule is divided into three parts which, briefly, make the following changes to existing legislation:

(a)Part 1:

(i)Amends the CCA to clarify the functions and powers of the Scams Prevention Framework general regulator and sector regulators;[41]

(ii)Amends the Corporations Act to clarify and extend the limited immunity provisions to all sustainability reports,’[42] amending an unintended drafting outcome;[43]

(iii)Further amends the Corporations Act to clarify that ASIC is required to deregister a company that has been wound up, streamlining the lodgement of forms associated with winding up as well;[44]

(iv)Makes other amendments to the Corporations Act clarifying notice requirements and requirements around the payment of fees;[45] and

(v)Amends the IGT Act to delegate certain powers relating to the IGT’s day-to-day functions.[46]

(b)Part 2 of Schedule 4 makes various changes to the GST Act, such as making changes to ensure that disability services funded under the Disability Services and Inclusion Act 2023 are GST-free, and changes to input tax credits.[47]

(c)Part 3 of Schedule 4 amends the Excise Act to align tariff proposals with similar arrangements in the Customs Act 1901.[48]

Schedule 5 – Machinery and other technical amendments

1.42The amendments in Schedule 5 make machinery and other technical amendments to the following Acts:

the Corporations Act;

the Foreign Acquisitions and Takeovers Act 1975;

the National Rental Affordability Scheme Act 2008;

the CCA; and

the Taxation Administration Act 1953.[49]

1.43The Explanatory Memorandum explained that the amendments:

…correct unintended drafting outcomes, update legislative references, simplify provisions and reduce red tape. These amendments will enable ongoing administration of key government programs and address unforeseen outcomes of previous legislative changes that undermine the proper functions of various government initiatives.[50]

1.44These amendments differ from those contained in Schedule 4 in that they need to be in place as soon as possible in order to enable the continuation of various government programs.[51] They also ensure that current law reflects Machinery of Government changes, address unintended practices and rectifies drafting errors.[52]

Schedule 6 – Extending Operation of the Prohibiting Energy Market Misconduct Provisions

1.45Schedule 6 of the bill makes amendments to the CCA to extend provisions contained in Part XICA for a further five years, from 1 January 2026 to 1 January 2031.[53]

1.46After an inquiry conducted by the Australian Competition and Comsumer Commission (ACCC) in 2018 into the supply and competitiveness of retail electricity prices, the former Government passed the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act 2019 (the PEMM Act).[54]

1.47The PEMM Act inserted Part XICA into the CCA which contains a framework of prohibitions and remedies related to conduct in electricity markets. More specifically, it has three prohibitions relating to retail, contract and electricity spot markets.[55]

1.48The PEMM Act also contained requirements for the Treasurer to establish a review into the effectiveness of the PEMM Act’s amendments. This review was conducted in 2024 and 2025 by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) and found that the PEMM Act amendments had been effective in constraining the behaviour of market participants and protecting consumers. The review recommended that Part XICA of the CCA be extended until the electricity markets had reached a state of relative stability.[56]

Schedule 7 - $20000 instant asset write-off for small business entities

1.49This schedule of the bill amends the Income Tax (Transitional Provisions) Act 1997 (the ITTP Act) to extend the $20000 instant asset write-off for small businesses (those with a turnover of less than $10 million a year) to 30June2026.[57]

1.50The $20000 instant asset write-off allows small businesses to immediately deduct the cost of eligible depreciating assets below the threshold amount. This $20000 threshold applies to ‘the cost of eligible depreciating assets, eligible amounts included in the second element of the cost of a depreciating asset (cost additions), and general small business pools’.[58]

1.51Without the amendments contained in the bill, the asset threshold would revert to the currently legislated threshold of $1000 from 1 July 2025.[59]

Commencement

1.52The commencement date of the amendments contained in the bill differs for each schedule of the bill. Please see Table 1.1 below:

Source: EM, p. 1-7

Financial impact

1.53The financial impact of the bill differs for each schedule. As per Table 1.2, the schedules below will have the following impact on receipts:

Source: EM, pp. 2–7.

1.54The financial impact of Schedule 3, while being minimal, is expected to change to reflect savings incurred for the years between reviews, where it is expected there will be no panel members or consultants appointed.[60] See Table 1.2 below:

Source: EM, p. 4. All figures in this table represent amounts in $million.

Legislative Scrutiny

1.55In its Scrutiny Digest 6 of 2025, the Senate Standing Committee on the Scrutiny of Bills (the Scrutiny Committee) raised concerns about Schedules 1, 2 and 6.

Schedule 1 – significant penalties

1.56Schedule 1 of the bill contains provisions which amend chapter 6C of the Corporations Act to double the penalties for existing offences contained within this chapter. It changes the penalty for existing offences relating to the amendments from two to four years and doubles the penalty units of strict liability offences from 60 to 120 units.[61]

1.57The bill also introduces two new strict liability offences, building on the currently existing offences mentioned above, that ‘would differentiate between the authority requiring the information—either…[ASIC] or key persons in listed entities—and broaden the scope of potential recipients.’[62]

1.58The Scrutiny Committee noted that its expectation was that the rationale for the imposition of significant penalties should be contained in the EM to the bill, with there being justification for such an increase by reference to similar offences in other Commonwealth legislation. The Scrutiny Committee was of the view that the EM did not substantively address why doubling the custodial penalty in relation to these offences was appropriate.[63]

1.59The Scrutiny Committee requested the Minister’s advice as to whether the increased custodial penalties in the bill were appropriate and asked that the Minister’s response address whether the proposed penalty is ‘broadly equivalent to penalties for similar offences in Commonwealth legislation and, if not, why not.’[64]

Schedule 2 – availability of judicial review and procedural fairness

1.60As mentioned above, Schedule 2 of the bill would allow the ACNC Commissioner to authorise disclosures of certain protected information in relation to registered entities, with there being ‘general disclosures’ and ‘limited disclosures.’ The bill proposes that the Commissioner must notify a registered entity before making a general disclosure but is not required to notify an entity before making a limited disclosure, though the Commission can, at their discretion, make such a disclosure if they choose to.[65] Decisions by the Commissioner to make a limited disclosure would not be subject to merits or judicial review.[66]

1.61The Scrutiny Committee expressed concerns that such an approach to disclosures may undermine procedural fairness, in particular the right to a fair hearing which is a fundamental principle in common law, as the relevant entity would have no opportunity to make a submission to the Commissioner or otherwise object prior to being identified in the disclosure. The Scrutiny Committee stated:

Although the committee acknowledges the ACNC’s interest in responding promptly to allegations of noncompliance or misconduct, it considers the justification —that the publicly available information is unlikely to cause substantial additional harm—provides limited support for restricting procedural fairness, noting that what a fair hearing requires would be calibrated to the circumstances (including the need for prompt action).[67]

1.62The Scrutiny Committee went on to state that it ‘draws this scrutiny concern to the attention of the senators and leaves to the Senate as a whole the appropriateness of these provisions.’[68]

Schedule 6 – deferral of sunsetting

1.63As stated above, Schedule 6 seeks to amend the CCA to extend the operation of certain provisions to 31 January 2025. The Scrutiny Committee ‘expects the [EM] for any bill deferring a sunsetting date following the conduct of a statutory review of the effectiveness of a legislative scheme to address why that deferral is necessary and appropriate.’[69]

1.64The Scrutiny Committee stated that the information contained in the EM to the bill only provided ‘high level’ guidance as to the extension of the sunsetting date and noted that the EM did not address whether the circumstances for the extension are expected to continue into the future. As such, it requested the Minister’s advice as to why the extension contained in Schedule 6 was necessary.[70]

Human rights implications

1.65As at the time of writing, the Parliamentary Joint Committee on Human Rights has not commented on the bill.

1.66The EM includes a discussion of the human rights implications of the bill, and states that Schedules 3, 4, 5, 6 and 7 do not engage any applicable human rights or freedoms.[71]

Schedule 1

1.67Schedule 1 engages the right to a fair trial and reverses the burden of proof contained in article 14 of the International Covenant on Civil and Political Rights (ICCPR) and the right to privacy contained in article 17 of the ICCPR.[72] The EM states that this Schedule is compatible with human rights as, where any rights are limited, such limitation is ‘reasonable, legitimate and proportional.’[73]

Schedule 2

1.68This Schedule also engages with article 14 of the ICCPR through the reversal of the burden of proof for offences in the Act, as well as article 17 of the ICCPR (the right to protection from unlawful or arbitrary interference with privacy). As with Schedule 1, the EM states that these amendments are compatible with human rights as any limitations are ‘reasonable, legitimate and proportional.’[74]

Regulatory impact

1.69According to the EM, Schedule 1 of the bill does not trigger the requirement to complete a regulatory impact assessment but there will be compliance costs which apply to entities listed in Australia and their beneficial owners. These entities may also be required to implement new processes to comply with the new regime. It is expected that the compliance costs will stabilise after the implementation of new compliance systems. Changes made to Schedule1 constitute regulatory relief and are expected to offset some of the burden from some of the legislated changes.[75]

1.70All other schedules of the bill are expected to have nil or minimal regulatory impact.[76]

Conduct of the inquiry

1.71The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting written submissions by 6November2025.

1.72The committee received eleven submissions which are listed at Appendix 1.

Acknowledgements

1.73The committee thanks all individuals and organisations who assisted with the inquiry, especially those who made written submissions.

Footnotes

[1]The Hon. Dr Andrew Leigh MP, Assistant Minister for Productivity, Competition, Charities and Treasury, House of Representatives Hansard, 4 September 2025, p. 18.

[2]Explanatory Memorandum (EM), p. 9.

[3]EM, p. 1.

[4]EM, p. 10.

[5]EM, p. 10.

[6]EM, p. 18.

[7]EM, p. 17.

[8]A ‘listed entity,’ as per the Corporations Act is a company, managed investment scheme or other body listed on a declared financial market (e.g. the Australian Stock Exchange or the Australian Securities Exchange), Corporations Act, s. 9.

[9]EM, p. 11

[10]EM, p. 11.

[11]EM, p. 13.

[12]EM, p. 11.

[13]EM, p. 15.

[14]EM, p. 11.

[15]EM, p. 12.

[16]EM, pp. 12–13.

[17]EM, p. 14.

[18]EM, p. 14.

[19]EM, p. 15.

[20]EM, p. 13

[21]EM, p. 66.

[22]EM, p. 15.

[23]EM, p. 60.

[24]EM, p. 67.

[25]The Treasury, Enhanced beneficial ownership disclosure for listed entities, 2024 (accessed 13November 2025).

[26]See, for example, submissions to The Treasury, Enhanced beneficial ownership disclosure for listed entities, 2024, from the Alternative Investment Management Association, p. 2; Law Council of Australia, .p. 1; Financial Services Council, p. 2.

[27]EM, p. 1.

[28]EM, p. 71.

[29]EM, p. 72.

[30]Department of the Treasury, Strengthening for Purpose: The Australian Charities and Not-for-profits Commission Legislation Review, August 2018, p. 13.

[31]EM, p. 73.

[32]ACNC Act, s. 150-15.

[33]EM, p. 73.

[34]EM, p. 76.

[35]EM, p. 73.

[36]EM, p. 86.

[37]EM, p. 85.

[38]FRAA, About FRAA, https://fraa.gov.au/about-fraa, (accessed 4 November 2025).

[39]EM, p. 86.

[40]EM, p. 4.

[41]EM, p. 90.

[42]EM, p. 92.

[43]EM, p. 92.

[44]EM, p. 97.

[45]EM, p. 98.

[46]EM, p. 101.

[47]EM, pp. 103–108.

[48]EM, p. 108.

[49]EM, p. 112.

[50]EM, p. 111.

[51]EM, p. 111.

[52]EM, p. 112.

[53]EM, p. 127.

[54]EM, p. 127.

[55]EM, p. 127.

[56]EM, p. 127.

[57]EM, p. 129.

[58]EM, p. 130.

[59]EM, p. 130.

[60]EM, p. 3–4.

[61]EM, p. 66.

[62]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p.114.

[63]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, pp.114–115

[64]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 116.

[65]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 118–119.

[66]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 119.

[67]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 119.

[68]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 120.

[69]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 121.

[70]Scrutiny Committee, Scrutiny Digest 6 of 2025, October 2025, p. 120–121.

[71]EM, p. 143–147.

[72]EM, pp. 137–139

[73]EM, p. 140.

[74]EM, pp. 140–142.

[75]EM, p. 2.

[76]EM, p. 2–7.