Chapter 1Introduction
1.1On 27 November 2025, the Senate referred the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (thebill) to the Senate Economics Legislation Committee (the committee) for inquiry and report by 26 February 2026.
1.2The committee’s report on the bill contains two chapters:
Chapter 1—provides an overview of the bill and the inquiry process; and
Chapter 2—considers inquiry participants’ evidence on the bill.
Purpose of the bill
1.3The bill’s four schedules each have a distinct purpose, as outlined in Table 1.2.
Table 1.1Summary of the bill’s schedules
| | |
1 | Limiting the use of genetic information by life insurers | Amends the Insurance Contracts Act 1984 and the Disability Discrimination Act 1992 to ban insurers from using certain information from a person’s genetic test results when offering life insurance. |
2 | Licensing exemptions for foreign financial services provides | Amends the Corporations Act 2001 to facilitate the operation of foreign financial services providers in Australia by establishing three new exemptions from the requirement to hold an Australian financial service license. |
3 | Multilateral development banks: Modernising and technical amendments | Amends various acts to streamline and modernise the ‘legislative framework under which Australia fulfils its financial obligations’ to multilateral development banks and the International Monetary Fund. |
4 | Repealing Stage 2 of the financial adviser registration | Amends the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021 to implement the Australian Government’s decision not to proceed with Stage 2 of the registration process for financial advisers. |
Source: Explanatory Memorandum, pp. 1–5, 7, 34 and 99.
Schedule 1—Limiting the use of genetic information by life insurers
1.4This section outlines the key details of Schedule 1, including its provisions, financial impact and human rights implications.
Overview
1.5Schedule 1 seeks to amend the Insurance Contracts Act 1984 (ICA 1984) to prohibit insurers from using certain information from a person’s genetic testing results when offering life insurance cover. In particular, the ban:
…prohibits insurers taking into account the results of underwriting to inform the offer of a contract of life insurance, or the terms and conditions of which a contract of life insurance is offered, where certain information about a life insured’s genetic testing results, defined as ‘protected genetic information’, was solicited or used as part of that underwriting.
1.6To enforce the ban, Schedule 1 establishes a strict liability offence and a civil penalty provision. Other proposed amendments mandate 5-yearly reviews of the ban and ‘clarify the operation of existing duties and limits in relation to a contract of life’.Schedule1 also seeks to amend the Disability Discrimination Act 1992 (DDA 1992) to make it unlawful to discriminate against a person in offering life insurance based on a person’s genetic test results.
1.7While there are ‘significant individual, public health, and scientific benefits associated with the use of genetic testing’, current laws ‘allow insurers to request and use a life insured’s genetic testing results when considering whether, and on what terms, to offer life insurance that covers that individual’. According to the Explanatory Memorandum, Australians are ‘delaying or foregoing’ genetic testing due to concerns that ‘adverse results will affect their ability to obtain affordable life insurance now or in the future’.
1.8Schedule 1 is intended to ‘provide certainty’ that people who undertake genetic testing will not be impacted in their ability to obtain life insurance cover. As a result, the Australian Government anticipates more people will undertake genetic testing which, in turn, brings wide reaching benefits.
1.9In 2018, the Parliamentary Joint Committee on Corporations and Financial Services raised concerns that the ‘use of genetic tests in underwriting was adversely impacting participation in health research projects involving genetic testing’. In response, the life insurance industry established the Moratorium on Genetic Tests in Life Insurance (2019), which provided that ‘subscribing insurers can only ask for or use the results of a genetic test where the cover applied for is above certain financial caps’.
1.10In 2023, the Treasury ‘undertook public consultation to seek feedback on the impacts of insurers using genetic test results in underwriting on the uptake of genetic testing’. Following that consultation process, the ‘Australian Government announced in September 2024 that it would implement a total ban on the use of adverse genetic testing results in life insurance underwriting’.
1.11In February 2025, the Treasury undertook further public consultation on the design of the ban ‘given its technical nature’.
Key provisions
1.12As outlined below, Schedule 1 contains the following two parts:
Part 1—Main amendments; and
Part 2—Other amendments.
Part 1—Main amendments
1.13Part 1 of Schedule 1 seeks to insert new Division 5 of Part IV into the ICA 1984 to establish the core components of the ban.
Application of the ban
1.14Proposed subsections 33H(1) and 33H(2) provide that an insurer would contravene the ban if:
the insurer makes a life insurance contract decision in relation to a contract of life insurance or proposed contract of life insurance;
in making that decision, the insurer takes into account the results of underwriting conducted in relation to a life insured; and
protected genetic information about the life insured was solicited or used for the purpose of the underwriting by the insurer or any other person who conducted or assisted with the underwriting (e.g. underwriters).
Life insurance contract decision and life insurance underwriting
1.15For the purposes of the ban, Part 1 (Item 1) stipulates that an insurer is deemed to have made a life insurance decision when the insurer decides:
whether or not to enter, or offer to enter, a proposed contract of life insurance;
the terms and conditions on which the insurer enters, or offers to enter into, a proposed contract of life insurance;
whether or not to propose or accept an extension, variation or reinstatement of a contract of life insurance; and/or
the terms or conditions on which the insurer proposes or accepts an extension, variation or reinstatement of a contract of life insurance.
1.16Part 1 defines ‘life insurance underwriting’ as ‘any assessment of risk associated with an individual that is intended to inform a life insurance contract decision’.
Soliciting protected genetic information
1.17For the purposes of the ban, proposed subsection 33G(1) provides that a ‘person solicits protected genetic information if the person requests, incentivises or otherwise induces or encourages another person’:
(a)to provide the protected genetic information; or
(b)to provide a kind of information in which that protected genetic information is included.
1.18The Explanatory Memorandum states the definition of ‘solicit’ is ‘intended to prevent the insurer or underwriter from indirectly or coercively requesting protected genetic information, such as by requesting medical records in full when it is possible those records will contain protected genetic information’.
Exception to the ban—voluntary information
1.19Proposed subsection 33H(3) provides that the ban will not apply to an insurer where a life insured person ‘volunteers and consents to protected genetic information being used as part of underwriting and where the use of that information favourably impacts the terms and conditions under which the life insurance may be offered’.
Meaning of protected genetic information
1.20Proposed subsection 33F(1) stipulates that protected genetic information is:
(a)information about whether the individual (or a genetic relative of the individual):
(i)has undergone genetic testing; or
(ii)intends to undergo genetic testing; or
(iii)has been recommended to undergo genetic testing; or
(b)information about any genetic testing undergone by the individual (or a genetic relative of the individual), including the results of such testing.
1.21Proposed subsection 33F(3) provides that ‘regulations may prescribe a specific thing that is taken to be, or not to be, a disease for the purposes of the exceptions to protected genetic information’.
1.22Proposed subsection 33F(4) provides that ‘information about the individual’s participation in, or information generated in the course of, health or medical research’ is also protected genetic information for the purposes of the ban.
1.23Proposed subsection 33F(5) provides that ‘regulations may prescribe information that is taken to be, or not to be, protected genetic information’. Such a regulation would ‘have effect despite anything else’ in proposed section 33F.
Exceptions to meaning of protected genetic information
1.24Proposed subsection 33F(2) provides that the following information is excluded from the meaning of ‘protected genetic information’:
the ‘name of the disease for which the individual (or a genetic relative of the individual) has received the clinical diagnosis’;
the ‘characteristics, natural history or prognosis of the disease (not including the actual results of any genetic testing that may have informed this information)’; and
‘any past, current or intended treatment of the disease’.
1.25The Explanatory Memorandum states the exceptions in subsection 33F(2) ‘preserve the ability of insurers and underwriters to seek and use certain information about an individual’s current state of health’.
Meaning of genetic testing
1.26Proposed subsection 33E(1) provides that ‘genetic testing’ is the analysis or interpretation of information derived from:
an individual’s deoxyribonucleic acid, ribonucleic acid or chromosome;
any ‘molecules or factors that influence or modify an individual’s gene expression (including epigenetic tests), conducted to detect, infer or predict genotypes or genetic variants’ or predict disease risk; or
any ‘product of an individual’s gene expression (such as a protein), biomarkers or metabolites conducted to detect, infer or predict genotypes or genetic variants’ or predict disease risk.
1.27Proposed subsection 33E(2) provides that ‘regulations may prescribe a thing that is taken to be, or not to be, genetic testing’. Such a regulation would ‘have effect despite anything else’ in proposed section 33E.
Enforcing the ban
1.28Under proposed section 33H, insurers would be subject to:
a strict liability offence for contraventions of the ban that is punishable with a fine of 60 penalty units; and
a civil penalty offence for contraventions of the ban that is punishable with a fine of 5000 penalty units.
1.29For the civil penalty offences, the Explanatory Memorandum notes that as insurers are usually body corporates ‘they will be subject to a greater penalty’ amount under section 75D of the ICA 1984.
Part 2—Other amendments
1.30Part 2 of Schedule 1 seeks to amend:
the ICA 1984 to ‘clarify the operation of existing duties and limits in relation to a contract of life insurance in consideration of the ban’; and
the DDA 1992 to ‘align Australia’s anti-discrimination law with the ban’.
Financial impact
1.31The Explanatory Memorandum states that Schedule 1 will have nil financial impact.
Compliance costs
1.32The Explanatory Memorandum states that Schedule 1 will have ‘short-term compliance costs associated with affected entities transitioning existing systems and processes to align with the new requirements of the ban’. The Explanatory Memorandum does not specify long-term compliance costs, however states that such costs will be monitored as part of the 5-yearly reviews of the ban.
Human rights implications
1.33As outlined below, the Explanatory Memorandum states that Schedule 1 engages the following human rights:
the right to privacy;
the right to health; and
the right to equality and non-discrimination.
1.34To the extent that Schedule 1 engages these rights, the Explanatory Memorandum states the schedule is:
…compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. This is because it promotes the protection of human rights, and to the extent it may limit human rights, those limitations are reasonable, necessary and proportionate.
The right to privacy
1.35Schedule 1 engages the right to privacy from unlawful or arbitrary interference with privacy under Article 17 of the International Covenant on Civil and Political Rights (ICCPR). The Explanatory Memorandum states that Schedule 1:
…promotes the right to privacy by amending the ICA 1984 to ban insurers from soliciting or using an individual’s protected genetic information to inform the offer of life insurance cover, or the terms and conditions on which the cover is offered.
1.36The Explanatory Memorandum notes that under Schedule 1:
certain information about an individual is not considered protected genetic information and is not subject to the ban;
individuals can consent to their protected genetic information being used in underwriting so long as this does not disadvantage the insured; and
the Australian Securities and Investments Commission (ASIC) may seek personal information in the course of administering the ban but such powers are ‘reasonable, necessary and proportionate’ to protect the integrity of and enforcement of the ban.
The right to health
1.37Schedule 1 engages the right to health in Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). As the Explanatory Memorandum notes:
Article 12(1) of the ICESCR promotes the right of all individuals to enjoy the highest attainable standard of physical and mental health and provides that state parties should take measures necessary for the improvement of all aspects of environmental and industrial hygiene.
1.38The Explanatory Memorandum states that Schedule 1 promotes the right to health ‘by removing barriers to the uptake of genetic testing by providing certainty to individuals…undertaking genetic testing, including through participation in health or medical research.’
Right to equality and non-discrimination
1.39As the Explanatory Memorandum notes:
‘Articles 2, 16 and 26 of the ICCPR obliges Australia to refrain from discriminating or eroding equality, and protect and advance the fulfilment and enjoyment of the rights to equality and non-discrimination for all people’; and
‘Article 5(1) of the [Convention on the Rights of Persons with Disabilities] recognises that all persons are equal before and under the law, and are entitled without any discrimination to the equal protection and benefit of the law’.
1.40The Explanatory Memorandum states that Schedule 1:
…improves the right to equality and non-discrimination in Australia by amending the DDA 1992 to align Australia’s anti-discrimination law with the ban and clarify that discrimination against another person, on the grounds of the other person’s disability, is not reasonable in relation to the provision of a life insurance policy if it is based on protected genetic information about a person.
Schedule 2—Licensing exemptions for foreign financial services provides
1.41This section outlines the key details of Schedule 2, including its provisions, financial impact and human rights implications.
Overview
1.42Schedule 2 of the bill seeks to amend the Corporations Act 2001 (CorporationsAct) to facilitate the operation of foreign financial services providers in Australia by establishing three new exemptions from the requirement to hold an Australian financial service license (AFSL). The proposed exemptions are:
the professional investor exemption—which would exempt ‘persons that provide financial services from outside Australia to professional investors’;
the comparable regulator exemption—which would exempt ‘persons regulated by comparable regulators and that provide financial services to wholesale clients’; and
the market maker exemption—which would exempt ‘persons that provide financial services that involve making a market for derivatives that are able to be traded on a specified licensed market’.
1.43Further, Schedule 2 seeks to fast-track the process for foreign financial services providers to apply for an AFSL by ‘exempting them from the fit and proper person test if they are authorised to provide financial services in a comparable overseas regulatory regime’.
1.44The Explanatory Memorandum states the objective of Schedule 2 is to:
…allow Australian professional and wholesale investors to diversify their investment opportunities by reducing barriers to entry for foreign financial services providers in Australian financial markets while also ensuring appropriate regulatory oversight of foreign financial services providers to maintain domestic market integrity and investor protection. This is intended to provide Australian investors with access to global financial markets and attract additional investment and liquidity into Australian financial markets.
Key provisions
1.45Schedule 2 contains eleven parts which seek to amend the Corporations Act to establish the new licensing exemptions for foreign financial services provides.
Professional investor exemption
1.46Proposed paragraph 911A(2)(eo) provides that the professional investor exemption applies if a person satisfies the following requirements:
the financial service is provided only to professional investors;
the person provides the financial service from a place outside this jurisdiction (except during limited marketing visits);
the person’s head office and principal place of business are located at one or more places outside this jurisdiction;
the person reasonably believes that providing the same or substantially the same financial service would not contravene any law applying in the person’s principal place of business, head office or the place from where the financial services are provided; and
the person notifies ASIC, in the approved form, that it intends to rely on this exemption to provide the financial service.
1.47The professional investor exemption ‘adopts the existing definition of ‘professional investor’ in section 9 of the Corporations Act (as modified by regulation 7.6.02AE of the Corporations Regulations).
Exceptions to the professional investor exemption
1.48Proposed section 911F provides that regulations may prescribe that the professional investor exemption may not apply for:
(c)a particular kind of financial service; or
(d)a particular kind of financial service in relation to a particular kind of financial product; or
(e)a particular kind of financial product;
(f)a particular kind of professional investor.
1.49The Explanatory Memorandum states the regulation making power under proposed section 911F is intended to ‘provide the Government with the ability to ensure the effective operation of the professional investor exemption and to respond to emerging risks and changes in global financial markets’.
Market maker exemption
1.50Proposed paragraph 911A(2)(eq) provides that the market maker exemption applies if a person satisfies the following requirements:
the financial service involves making a market for derivatives that are able to be traded on a licensed market prescribed by the regulations;
the person provides the financial service from a place outside this jurisdiction;
the person’s head office and principal place of business are located at one or more places outside this jurisdiction;
the person reasonably believes that providing the same or substantially the same financial services would not contravene any law applying in any of the places referred to in the above dot points; and
the person notifies ASIC, in the approved form, that it intends to rely on this exemption to provide the financial service.
1.51The ‘reference to market making under the market maker exemption has the same meaning as ‘makes a market’ in section 766D of the Corporations Act’.
Comparable regulator exemption
1.52Proposed paragraph 911A(2)(ep) provides that the comparable regulator exemption applies if a person satisfies the following requirements:
the financial service is provided only to wholesale clients;
the person is a foreign company or is a partnership formed outside this jurisdiction;
the person has and maintains any authorisations, registrations, or licences (however described) necessary to legally provide the same, or substantially the same, financial service in a place that is outside this jurisdiction (the comparable jurisdiction);
the regulator administering those authorisations, registrations, or licences for the comparable jurisdiction is a regulator determined by the Minister (the comparable regulator);
the person provides the financial service from a jurisdiction where it is regulated by the comparable regulator; and
the person notifies ASIC, in the approved form, that it intends to rely on this exemption to provide the financial service.
1.53The comparable market maker exemption applies the ‘existing definition of ‘wholesale client’ in sections 761G and 761GA of the Corporations Act’.
Civil penalty provisions for contravening an exemption
1.54Proposed subsection 911G(4) provides a person who relies on a professional investor exemption, a market maker exemption or a comparable regulator exemption but does not satisfy the exemption’s respective requirements then the person is in contravention of the civil penalty provision under subsection 911A(5B) of the Corporations Act.
Conditions
1.55Proposed subsections 911G(1), (2) and (3) provide that a person who uses aprofessional investor exemption, a market maker exemption or a comparable regulator exemption must comply with a range of other conditions, including:
to give ASIC reasonable assistance in relation to the performance and exercise of ASIC’s functions and powers;
to agree to legal proceedings being brought in an Australian court for the provision of financial services in reliance on an exemption if those proceedings are brought by ASIC or a Commonwealth authority; and
to notify ASIC of any significant enforcement action, disciplinary action or investigation undertaken against the person by a regulator, government authority, or relevant financial market operator in any place outside Australia
1.56ASIC may take a range of enforcement action if a person fails to comply with a condition under the professional investor exemption, the market maker exemption or the comparable regulator. These actions include initiating civil penalty proceedings or—after taking reasonable steps to engage with the person—cancel the exemption, partially cancel the exemption or impose additional conditions.
Fit and proper person test exemption
1.57Items 6 to 9 of Schedule 2 proposes an exemption ‘from the requirement to satisfy the fit and proper person test in section 913BA of the Corporations Act’. The fit and proper person test exemption is available to an applicant if they meet the following requirements:
the applicant is a foreign company or a partnership formed outside Australia;
the licence, if granted, would be restricted to the provision of financial services to wholesale clients; and
the applicant holds any authorisations, registrations, or licences (however described) necessary to legally provide the same or substantially the same financial services in a place outside this jurisdiction and are issued by a comparable regulator determined by the Minister.
Minister’s power to determine regulators
1.58Proposed subsection 911W(1) provides that the Minister may ‘by legislative instrument, determine regulators for the purpose of the comparable regulator exemption and the fit and proper person test exemption’. In doing so, the Minister must have a regard to a range of factors related to the suitability of the comparable regulator (per proposed subsection 911W(2)).
Financial impact
1.59The Explanatory Memorandum states that Schedule 2 will have nil financial impact.
Compliance costs
1.60The Explanatory Memorandum states Schedule 2 is ‘estimated to have a low impact on compliance costs’.
Human rights implications
1.61As outlined below, Schedule 2 engages the following human rights:
the right to a fair hearing;
the right to privacy; and
the right to work.
1.62To the extent that Schedule 2 engages with these rights, the Explanatory Memorandum states t the schedule is:
…compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 as the limitations are appropriate, proportionate and achieve a legitimate objective.
Right to a fair hearing
1.63Schedule 2 proposes a civil penalty that ‘may engage the right to fair trial as well as the presumption of innocence under Articles 14 and 15 of the ICCPR’.
1.64The Explanatory Memorandum notes that the civil penalty proposed in Schedule 2:
would only be applied at its maximum rate for the most serious offending, as determined by the court;
is ‘consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers’;
is ‘regulatory and protective in nature’ and intended to ‘promote compliance and strengthen integrity measures for the use of the new exemptions without unnecessarily disrupting the provision of financial services by cancelling a person’s exemption’; and
would apply prospectively after the commencement of the schedule.
Right to privacy
1.65Schedule2 may engage the right to right to protection from arbitrary or unlawful interference with privacy in relation to several provisions that would require a person using an exemption:
to provide certain information to ASIC;
to notify ASIC that it consents to ASIC sharing information about the person with a comparable regulator; or
to notify ASIC ‘of any significant enforcement action, disciplinary action or investigation undertaken against them by a regulator, government authority or relevant financial market operator in any jurisdiction outside Australia’.
1.66As the Explanatory Memorandum notes, Article 17 of the ICCPR ‘may be subject to permissible limitations, where these limitations are authorised by law and are not arbitrary’. The Explanatory Memorandum details the substantive rationale for the abovementioned provisions which may engage the right to privacy. Further, the Explanatory Memorandum notes when ASIC handles personal information about an individual, ASIC ‘must comply with disclosure and retention principles contained in the Privacy Act’.
Right to work
1.67Schedule 2 ‘engages the right to work under Article 6 of the ICESR’ as ASIC may cancel the FFSP exemption being used by a person ‘if ASIC reasonably believes that the person…is not a fit and proper person to provide the financial services’.
1.68The Explanatory Memorandum suggests such action by ASIC is appropriate to ensure ‘that persons who carry on a financial services business in Australia are trustworthy and have the required integrity’. Further, the Explanatory Memorandum notes that ASIC may only cancel an exemption after ASIC:
…takes reasonable steps to give the person a written notice of the proposed cancellation, the reasons for it, and a reasonable opportunity toappear (or be represented) at a private hearing before ASIC and to make submissions to ASIC. Furthermore, a decision by ASIC to cancel a person’s exemption is also subject to merits review by the AAT and ensures that the person has access to necessary procedural safeguards.
Schedule 3—Multilateral development banks: Modernising and technical amendments
1.69This section outlines the key details of Schedule 3, including its provisions,financial impact and human rights implications.
Overview
1.70Schedule 3 of the bill seeks to streamline and modernise the ‘legislative framework under which Australia fulfils its financial obligations’ to multilateral development banks (MDBs) and the International Monetary Fund (IMF). In particular, Schedule 3 proposes amendments to several acts to introduce special appropriations for Australia’s financial obligations to MDBs. These MDBs are:
the Asian Development Bank;
the Asian Infrastructure Investment Bank;
the European Bank for Reconstruction and Development;
the International Finance Corporation;
the International Bank for Reconstruction and Development; and
the Multilateral Investment Guarantee Agency.
1.71As stated in the Explanatory Memorandum, the new appropriations:
…are intended to facilitate Australia fulfilling any financial obligation to an MDB that Australia undertakes or is imposed, subject to the obligation satisfying certain requirements. This includes both existing financial obligations and those undertaken or imposed in the future.
1.72Given the need for Australia to ‘be responsive in meeting its existing relevant financial obligations and have flexibility to sign up to new ones’, the Explanatory Memorandum states ‘standing appropriations are more suitable for meeting possible liabilities than the annual appropriations bills cycle’. While the standing appropriations proposed under Schedule 3 ‘do not have a direct dollar-figure limit’, the Explanatory Memorandum states ‘the amounts of money that could be appropriated is indirectly limited’ and could only be used ‘for an agreement, arrangement or resolution of a specific kind with an MDB’. The standing appropriations are also time limited or subject to a sunset clause.
1.73Further, Schedule 3’s proposed amendments would:
allow ‘routine transactions to be delegable to senior Treasury officials’;
ensure ‘payments consistent with existing obligations can be made without additional ministerial approval’; and
make ‘other technical amendments to further reduce future administrative and legislative burden’.
1.74In introducing the bill, the Assistant Treasurer and Minister for Financial Services, Dr Mulino, said Schedule 3’s amendments would reduce administrative and legislative burden. Dr Mulino added:
These banks are rapidly evolving their financing models. A more flexible framework will ensure Australia does not fall behind in our ability to participate in future financing arrangements with these institutions.
These changes will importantly allow Australia to formalise agreements announced as part of the 2024-25 MYEFO with the World Bank and the Asian Development Bank and are consistent with Australia's support for rules-based multilateral institutions.
Key provisions
1.75As outlined below, Schedule 3 of the bill contains two parts:
Part 1—Main amendments; and
Part 2—Repeals.
Part 1—Main amendments
1.76Part 1 of Schedule 3 contains the main amendments to establish new standing appropriations for MDBs and related measures to streamline the framework under which Australia meets its financial obligations to MDBs.
Appropriations for Multilateral Development Banks
1.77Part 1 seeks to amend the following acts to introduce a special appropriation into each of the following acts:
the Asian Development Bank Act 1966 (ADB Act);
the Asian Infrastructure Investment Bank Act 2015 (AIIB Act);
the European Bank for Reconstruction and Development Act 1990 (EBRD Act);
the International Finance Corporation Act 1955 (IFC Act);
the International Monetary Agreements Act 1947 (IMA Act); and
the Multilateral Investment Guarantee Agency Act 1997 (MIGA Act).
1.78Under the proposed appropriations, the Consolidated Revenue Fund would be:
…appropriated for the purposes of making any payment necessary to meet a ‘relevant financial obligation’ or (except in the case of the IFC Act) redeem securities issued in lieu of making such a payment. Appropriations of this kind ensure Australia can comply with its international obligations to make payments under existing or future agreements.
Relevant financial obligations
1.79Under Schedule 3, a definition of ‘relevant financial obligation’ is inserted into each of the abovementioned acts. For the purposes of the MDB acts, a relevant financial obligation is an obligation of Australia (contingent or otherwise) for which the following requirements are satisfied:
the obligation must require (or could require) Australia to make one or more payments;
the obligation must have been undertaken or imposed under an agreement, arrangement or resolution of a specific kind;
the obligation must relate to providing financial accommodation in support of the purpose of the MDB;
if the obligation is undertaken or imposed after commencement of the amendments, the notification requirements must be met; and
the obligation must not be an obligation that is excluded by the Minister.
1.80As outlined in the Explanatory Memorandum, the proposed amendments in Part 1 provide for a range other technical and administrative requirements that apply to a relevant financial obligation that would be established by each of the respective MDB acts.
Regulation-making powers
1.81Under the proposed ‘relevant financial obligation’ inserted into each of the MDB acts, the Minister ‘may, by legislative instrument, give notice of’:
an obligation undertaken or imposed after the commencement of these amendments; or
an increase in the amount of a relevant financial obligation because of thevariation of, or making of a new, agreement, arrangement or resolution after the commencement of these amendments.
1.82Such a notification would be subject to disallowance and ‘cannot commence until after the disallowance period has passed’. Further:
A new obligation only becomes a relevant financial obligation, and an increase in amount of an existing relevant financial obligation is only to be taken into account, when the instrument notifying of the obligation or increase has commenced.
1.83The Minister may also make a legislative instrument to ‘exclude an obligation from being a relevant financial obligation’. As the Explanatory Memorandum states:
Providing the Minister with the option to exclude a financial obligation has been included given the new special appropriations are broad and cover a range of potential financial obligations. If, in the future, the Minister considers it would be inappropriate to use the special appropriation for such a financial obligation, they will have the flexibility to exempt the new framework from applying to that financial obligation via legislative instrument. This provides an additional safeguard to ensure the new appropriations only apply where appropriate.
Securities
1.84Part 1 provides that a new appropriation established under an MDB act would ‘support the making of any payments necessary to redeem securities’ under the respective MDB act. The Explanatory Memorandum states these amendments ‘ensure Australia can issue promissory notes or similar securities to satisfy its relevant financial obligations to the MDBs or other bodies to the extent that the MDB or other body accepts this’.
Delegations
1.85Part 1 proposes to insert new delegation powers into the ADB Act, the AIIB Act, the EBRD Act, the IMA Act 1947 and the MIGA Act to:
…allow the power to authorise the issue of promissory notes or other securities by Australia in place of a payment to be delegable by the Minister to a senior Treasury official.
Part 2—Repeals
1.86Part 2 of Schedule 3 seeks to make a number of consequential amendments to ‘repeal Acts with the primary purpose of creating appropriations for additional subscriptions of shares or capital in MDBs’. As the Explanatory Memorandum states:
Payments to meet obligations supported by the appropriations in these Acts have either already been made or are now supported by the new special appropriations introduced by these amendments. Therefore, these Acts are no longer necessary and are repealed to streamline the MDB legislative framework and provide certainty about which Acts funds are appropriated under.
Financial impact
1.87The Explanatory Memorandum states Schedule 3 will have ‘unquantifiable costs…subject to future decisions of Government to enter into further agreements’. However, the Explanatory Memorandum includes the below table of financial implications which ‘reflect expected returns on investment in hybrid capital and the provision of guarantees that will have a positive budget impact for the agreements announced in the 2024-25 MYEFO measure’.
Table 1.2Financial implications, 2023–24 to 2027–28
Source: Explanatory Memorandum, p. 4.
Compliance costs
1.88The Explanatory Memorandum states Schedule 3 will have a nil compliance cost.
Human rights implications
1.89Schedule 3 does not engage ‘any of the applicable rights or freedoms’ recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Explanatory Memorandum notes that ‘[w]hile the amendments [in Schedule 3] support Australia’s membership in MDBs and the IMF, they do not alter the agreements with these institutions’.
1.90As such, the Explanatory Memorandum states that Schedule 3 is ‘is compatible with human rights as it does not raise any human rights issues’.
Schedule 4—Repealing Stage 2 of the financial adviser registration
1.91This section outlines the key details of Schedule 4, including its provisions,financial impact and human rights implications.
Overview
1.92Schedule 4of the bill seeks to amend theFinancial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act) to implement the Australian Government’s decision not to proceed with Stage 2 of the registration process for financial advisers.
1.93The registration process for financial advisers was implemented as a two-stage process following Recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which, in part, called for all financial advisers to retail clients to be registered. Under Stage 1, AFS licensees have been required to ‘apply to ASIC to register their financial advisers by providing certain declarations about their financial advisers’ since February 2024. Under Stage 2, individual financial advisers would have been required to register annually with ASIC from 1 July 2026.
1.94If enacted, Schedule 4 would maintain the ‘current system’ in which AFS licensees are required to register their financial advisers (Stage1), however the registration process for individual advisers would not proceed (Stage 2).
Key provisions
1.95Schedule 4 of the bill contains the following two parts:
Part 1 (Subsection 2(1) (table item 4))—which seeks to repeal the table item that provides the comment date for Schedule 2 of the Better Advice Act; and
Part 2 (Schedule 2)—which seeks to repeal Schedule 2 of the Better Advice Act.
Financial impact
1.96The Explanatory Memorandum states that Schedule4 will have nil financial impact.
Compliance costs
1.97The Explanatory Memorandum states Schedule 4 will ‘have nil compliance costs as no actions or changes are required by individuals of AFS licensees’.
Human rights implications
1.98Schedule 4 does not engage ‘any of the applicable rights or freedoms’ recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. As such, the Explanatory Memorandum states that Schedule 4 is ‘is compatible with human rights as it does not raise any human rights issues’.
Commencement dates
1.99If enacted, the bill’s schedules would commence as noted in Table 1.3.
Table 1.3 Commencement dates for the bill's schedules
| |
1 | The day after six months from the bill receiving Royal Assent |
2 | The day after 12 months from the bill receiving Royal Assent |
3 | The day after Royal Assent |
4 | 30 June 2026 |
Source: Explanatory Memorandum, pp. 1–5.
Legislative scrutiny
1.100This section outlines legislative scrutiny of the bill undertaken by:
the Senate Standing Committee on the Scrutiny of Bills; and
the Parliamentary Joint Committee on Human Rights.
Senate Standing Committee on the Scrutiny of Bills
1.101The Senate Standing Committee on the Scrutiny of Bills (Scrutiny Committee) examined the bill in its Scrutiny Digest 2 of 2026 and commented on:
significant matters in delegated legislation;
delegated legislation modifying or exempting primary legislation;
establishment of standing appropriations; and
exemption from sunsetting.
1.102The Scrutiny Committee’s comments are outlined further below.
Significant matters in delegated legislation and delegated legislation modifying or exempting primary legislation
1.103The Scrutiny Committee reported that the proposed amendments to the ICA1984 in Schedule 1 allow for regulations to alter the operation of that Act. In particular, the Scrutiny Committee drew attention to the following proposed subsections in Schedule 1:
33E(1)—which seeks to define the term ‘genetic testing’ and which, per proposed subsection 33E(2), would be prescribed by regulations; and
33F—which seeks to define ‘protected genetic information’ and which would also ‘include information prescribed in regulations as coming within or outside the scope of that term’.
1.104The Scrutiny Committee noted that the abovementioned regulations would ‘operate to modify the scope of definitions in the primary legislation and, in doing so, constrain or extend the operation of the strict liability offence that imposes the ban on insurers’. As such, the Scrutiny Committee emphasised that there should be ‘sound justification’ for any such clauses that allow delegated legislation to modify the operation of primary legislation.
1.105The Scrutiny Committee acknowledged:
…the explanation in the explanatory memorandum that provision to modify definitions in the primary law is appropriate given the need to keep pace with rapid scientific and technological developments in genetics and related technologies.
1.106However, the Scrutiny Committee raised concerns with the proposed ‘broad statutory discretion to make regulations’. In particular, the Scrutiny Committee raised concerns that proposed subsections 33E(1) and 33F could enable the definitions of ‘protected genetic information’ and ‘genetic testing’ to be modified via regulation despite any other stipulations made in the respective subsections. Further, the Scrutiny Committee reported its concerns were ‘heightened given that the central role of these definitions in the strict liability offence’ intended to enforce the ban.
1.107The Scrutiny Committee suggested significant matters such as definitions of ‘genetic testing’ and ‘protected genetic information’ should be incorporated in primary legislation unless otherwise justified. While the Scrutiny Committee accepted that the proposed delegated legislation deals with areas that are ‘technically complex and may require updating’, the committee concluded that it ‘does not consider that legislative safeguards sufficient to ensure appropriate parliamentary oversight…have been either provided by the bill or adequately considered in its explanatory materials.
Delegated legislation modifying or exempting primary legislation
1.108The Scrutiny Committee drew senators’ attention to a regulation making power that would be established in relation to the professional investor exemption under Schedule 2. Item 5 of Schedule 2, proposed section 911F would:
…allow regulations to specify that the proposed exemption does not apply for a financial service, a financial product, a financial service for a particular kind of financial product or a professional investor.
1.109The Scrutiny Committee considered that the delegated legislation under proposed section 911F could, in effect, disapply the proposed professional investor exemption such that a person could be required to maintain an AFSL to provide a relevant product or service.
1.110The rationale for the regulations is outlined in the Explanatory Memorandum. In part, the Explanatory Memorandum states the regulations are ‘intended to provide the Government with the ability to ensure the effective operation of the professional investor exemption and to respond to emerging risks and changes in global financial markets’.
1.111However, the Scrutiny Committee considered that the detail provided in the Explanatory Memorandum only provided a ‘cursory justification’. Further, the Scrutiny Committee considered that there were insufficient legislative safeguards and guidance in Schedule 2 or the Explanatory Memorandum on the ‘circumstances and risks that would warrant the making of such regulations’.
Establishment of standing appropriations
1.112The Scrutiny Committee’s report drew senators’ attention to Schedule 3 of the bill regarding the proposed amendments to various acts to establish a single standing appropriation for each act that underpins Australia’s financial obligation to an MDB. The Scrutiny Committee explained that standing appropriations offer less opportunity for parliamentary oversight than annual appropriations:
Standing appropriations enable entities to spend money from the Consolidated Revenue Fund on an ongoing basis, usually for indefinite amounts and duration. Unlike annual appropriations which require the executive to periodically request the Parliament to appropriate money for a particular purpose, once a standing appropriation is enacted any expenditure under it does not require regular parliamentary approval and therefore escapes direct parliamentary control.
1.113Further, the Scrutiny Committee noted that expenditure authorised by a standing appropriation can grow significantly over time, and as the bill does not propose a mechanism to review the proposed standing appropriations, it would be ‘difficult for the Parliament to assess whether a standing appropriation remains appropriate’.
1.114The Scrutiny Committee accepted the explanation provided in the Explanatory Memorandum for the reasons that the proposed appropriations are not time limited, or subject to a sunset clause. Nonetheless, the Scrutiny Committee noted it was unclear if any other measures had been considered to provide parliamentary oversight and cautioned that, once established, the Parliament will retain limited oversight of the expenditure.
Exemption from sunsetting
1.115Further to the above discussion on standing appropriations, the Scrutiny Committee drew senators’ attention to a proposed legislative instrument under several items in Schedule 3 which may, in effect, be exempt from sunsetting.
1.116As the Scrutiny Committee outlined, items 2, 7, 9, 13, 15 and 26 of Schedule 3 seek to insert a definition of a ‘relevant financial obligation’ into the respective Act each item proposed to amend. Each of those items includes provisions that would enable to the Treasurer to make certain legislative instruments:
proposed subsection 4 in each item provides that the Treasurer may, by legislative instrument, exclude an obligation from the definition of a ‘relevant financial obligation’; and
proposed subsection 5 in each item provides that the Treasurer may, by legislative instrument, give notice of a ‘new obligation or an increase in the amount of an obligation for the purposes of the definition’.
1.117The Scrutiny Committee noted the Legislation Act 2003 establishes a regime for the automatic repeal of regulations, generally after a period of 10 years, unless a regulation is otherwise exempt. Under Section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015 (LEOMR) instruments with the ‘sole or primary purpose to give effect to an international obligation of Australia’ are exempt from sunsetting. As such, the Scrutiny Committee said that:
…any legislative instrument giving notice of a new obligation or an increase in the amount of an obligation, or excluding an obligation, for the purposes of the definition of a ‘relevant financial obligation’ may be exempt from sunsetting due to the operation of the LEOMR.
1.118The Scrutiny Committee emphasised that ‘[s]unsetting and disallowance are the primary means by which the Parliament exercises control over delegated legislation, such as legislative instruments’. While the Scrutiny Committee acknowledged the instruments may be the subject of disallowance, it noted that the instruments could be for new, or increased, financial obligations and, as such, the ‘removal of automatic sunsetting limits the opportunity for Parliament to reconsider the appropriateness and currency of those obligations – including any contingent notifications – following a period of at least ten years’.
Parliamentary Joint Committee on Human Rights
1.119The Parliamentary Joint Committee on Human Rights reported that it had ‘no comment’ on the bill.
Conduct of the inquiry
1.120The committee advertised the inquiry on its website and wrote to a range of stakeholders to invite them to make a submission to the inquiry by 21January2026.
1.121The committee received 14 submissions, as listed at Appendix 1.
Acknowledgements
1.122The committee extends its thanks to the individuals and organisations who contributed to the inquiry by making substantial written submissions.