The Senate’s Mammoth Final Sitting of the Year: Key Changes for Your Business

The Senate ended its legislative year with a marathon session, passing 32 Bills in a single day. This "freight train" of legislation paves the way for an election and introduces significant changes that could directly impact your business operations. Here’s a breakdown of the most relevant updates and what they mean for you.

Superannuation Gets a Defined Purpose

The Superannuation (Objective) Bill 2023 enshrines the purpose of superannuation in law for the first time:

"To preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way."

This means that future superannuation policy changes must align with this objective, ensuring that the system remains focused on supporting Australians in their retirement.

Tax Changes for Businesses and Investors

The Treasury Laws Amendment (2024 Tax and Other Measures No. 1) Bill 2024 introduces several changes designed to streamline compliance and address tax concerns for businesses, including:

• Increasing the foreign resident capital gains withholding rate from 12.5% to 15%.
• Extending the time small and medium businesses (SMEs) have to amend tax assessments.
• Allowing the ATO to retain tax refunds for up to 90 days to verify bank details before issuing payments.
• Enabling employers to streamline Single Touch Payroll (STP) declarations over extended periods.

These changes are aimed at tightening compliance while offering SMEs more flexibility to address errors in their tax filings.

Anti-Money Laundering Obligations Expand to Professional Services

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 brings significant changes to businesses in professional services such as accounting, legal, and real estate. Key updates include:

• Requiring compliance with anti-money laundering (AML) obligations for certain services.
• Expanding the definition of "qualified accountant" to include members of the Institute of Public Accountants.
• Introducing a new reporting group structure for mandatory reporting obligations.
• Regulating how AML/CTF information subject to legal privilege is handled.
• Granting AUSTRAC additional powers to enforce compliance and obtain information.

If your business operates in these sectors, you may need to update processes to comply with these stricter requirements.

Aged Care Reforms Seek Industry Sustainability

The Aged Care (Consequential and Transitional Provisions) Bill 2024 introduces a simplified, rights-based framework for aged care funding. The reforms aim to ensure the viability of the sector by addressing chronic losses and improving access to care.

For businesses, these changes could mean adjustments in contributions for aged care services or indirect impacts if employees or family members rely on this system.

Build-to-Rent Tax Incentives

The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 introduces incentives for investors in the build-to-rent sector, including:

• Increasing capital works deductions to 4% per year.
• Reducing the final withholding tax rate for eligible investments to 15%.

Additionally, the Capital Works (Build to Rent Misuse Tax) Bill 2024 ensures integrity by imposing penalties on entities that improperly claim these tax benefits.

These measures aim to address housing shortages while creating opportunities for investors in property development.

Restructuring the Reserve Bank of Australia

The Treasury Laws Amendment (Reserve Bank Reforms) Bill 2023 overhauls the governance of the Reserve Bank of Australia (RBA):

• Establishing a Monetary Policy Board to oversee monetary policy and financial system stability.
• Creating a separate Governance Board to manage the RBA’s operational policies.
• Removing the Government’s power to override RBA decisions on monetary policy.

These changes aim to improve transparency and align the RBA’s objectives with Australia’s long-term economic goals.

Mergers and Acquisitions Reform

The Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 introduces mandatory notification requirements for mergers above specific thresholds. The new rules target anti-competitive acquisitions by requiring approval from the Australian Competition and Consumer Commission (ACCC).

Key thresholds include:

1. Combined Australian turnover above $200 million with a target turnover above $50 million or a global transaction value exceeding $250 million.
2. Large businesses (turnover above $500 million) acquiring smaller entities with turnover above $10 million.
3. Serial acquisitions with cumulative turnover of $50 million in substitutable goods over three years.

These measures aim to ensure fair competition and prevent market dominance.

Greens Secured Social Housing and Energy Updates

In exchange for their support, The Greens secured commitments for $500 million in electrification upgrades to 50,000 social housing properties and the removal of coal, oil, and gas funding from certain programs. These updates reflect a broader push toward sustainability and reducing carbon emissions.

These legislative changes highlight the dynamic nature of the business environment in Australia. Whether it's tax updates, regulatory reforms, or new investment opportunities, staying informed is key to adapting effectively.

If you have questions or need guidance on how these changes might impact your business, feel free to reach out to our team. We’re here to help.

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