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GRACosway Weekly Wrap Up
2 December 2016
 
As Federal Parliament rises for the year, Labor continues its lead in the polls with the latest Fairfax-Ipsos poll indicating the Opposition remains ahead of the Coalition Government, 51 to 49 per cent on a two-party preferred basis.
  
The Government has, however, ended the year by successfully passing legislation to reinstate the Australian Building and Construction Commission (ABCC), with the 36 to 33 vote victory described by Prime Minister Malcolm Turnbull as “another vital element in our national economic plan”. Conversely, CFMEU National Construction Secretary Dave Noonan criticised the amended legislation, saying the new laws “will take away rights, will endanger safety and conditions for ordinary workers in the industry”. The ABCC legislation has previously been rejected by the Senate, which contributed to the July double dissolution election earlier this year. See media coverage here.
 
The Coalition also passed the backpacker tax legislation late yesterday, with the Senate voting 43 to 19 in favour of a 15 per cent tax rate as part of an eleventh-hour deal with the Greens in which the Government agreed to provide an additional $100 million to the National Landcare Program, and reduce the tax on backpacker superannuation payments from 95 to 65 per cent. Passage of the legislation marks the culmination of negotiations with the One Nation party and Senators Derryn Hinch and David Leyonhjelm, and has been described by the Prime Minister as marking a “term of delivery” for the Coalition Government. See media coverage here.
 
Treasurer Scott Morrison announced an Exposure Draft Bill and Explanatory Memorandum to implement the Diverted Profits Tax (DPT), which will boost the Australian Tax Office’s (ATO) power to tackle multinational tax avoidance and strengthen anti-avoidance rules in the Income Tax Assessment Act 1936 and associated legislation. The DPT is expected to raise $200 million in revenue by imposing a 40 per cent tax on profits diverted by multinationals, which will commence on 1 July 2017. Submissions from interested parties are open until 23 December 2016. See media release here.
 
Shadow Treasurer Chris Bowen addressed the National Press Club on Wednesday, where he spoke of the potential loss of Australia’s AAA credit rating and warned that in combination with downgrades to banks, such a result would “ricochet through the economy”. His speech further highlighted the drop in homeownership and living standards as well as rise in underemployment and budget deficit, with the Shadow Treasurer pointing out that “this is not an esoteric debate between economists, focused on theory and accounting and prestige” but a genuine threat that would increase the Government’s borrowing costs, divert resources and add undue fiscal pressure to the states. See media coverage here.
 
The NSW Government released its Innovation Strategy, Bringing Big Ideas to Life, which outlines its vision to improve innovation across the government and non-government sectors. The Strategy focuses on the Government’s role as a leader in innovation; efforts to foster research and development; developing skills for the future; and providing a home for entrepreneurs. A Ministerial Innovation Committee will oversee its implementation. See media coverage here.
 
A formal investigation into the actions of current Victorian Labor MP Cesar Melhem has been launched by the Fair Work Commission in relation to allegations of fraudulent deals brokered while Mr Melhem was the State Secretary of the Australian Workers’ Union (AWU). The Fair Work inquiry will reportedly examine a series of payments made by employers to the AWU as a trade for workplace agreements, which allegedly saved employers millions at the expense of workers. See media coverage here.
 
Justice Susan Kiefel has been appointed Chief Justice of the High Court this week and will replace Chief Justice Robert French to become the first woman to hold the position in Australian history. She was appointed to the High Court in 2007 under the Howard Government. See media coverage here.
 
The Victorian and SA parliaments sit next week for the final time in 2016.


FINANCE

Federal Developments
 
Minister for Revenue and Financial Services Kelly O’Dwyer has announced the Treasury Laws Amendment Bill 2016, which form part of the Government’s response to the Murray Financial System Inquiry. Following extensive consultation earlier this year, the client money reforms will protect retail investors in the case of a licensee becoming insolvent. See media release: Government delivers on commitment to protect client money.
 
The Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 has passed the House of Representatives. Under the new rules, upfront commissions paid to advisers will be reduced to a maximum of 60 per cent; ongoing commissions will be capped at 20 per cent; a two year upfront commission clawback period will be introduced; consistent annual commission amounts will be enforced; and fee-for-service remuneration will remain uncapped. See media release: Life insurance commission reductions to benefit consumers.
 
The Government released its response to the March 2016 final report of the independent review of the small amount credit contract (SACC) laws, outlining its support for retaining existing price caps on SACCs; extending the SACC protected earnings amount requirement; introducing a cap on total payments on consumer leases; and introducing a protected earnings amount requirement for consumer lease providers. See media release: Government response to the final report of the review of the small amount credit contract laws.
 
Treasurer Scott Morrison announced additional amendments to competition law within the exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016 in order to strengthen Section 46 of the Competition and Consumer Act 2010, as recommended by the Harper Review. The introduction of this amendment will prevent firms with substantial market power from engaging in conduct that reduces competition in Australian markets. See media release: Delivering strengthened competition law – Section 46 legislation introduced.
 

RESOURCES AND ENERGY

Federal Developments
 
Treasurer Scott Morrison announced a Federal Government review of the operation of the Petroleum Resource Rent Tax (PRRT), crude oil excise and associated Commonwealth royalties. Michael Callaghan AM will lead the review, which will advise on the effectiveness of the PRRT operation and consider reasons behind the recent decline in revenue. A report as a result of the review is expected by April 2017. See media release: Turnbull Government Review of Petroleum Resource Rent Tax.
 
State Developments
 
Following the 99-year lease of the Ausgrid power network earlier this year, the NSW Government has announced it will shortly seek Expressions of Interest regarding the long-term lease of 50.4 per cent of its Endeavour Energy power grid. The lease is expected to generate a minimum of $3 billion for the State Government and will reportedly be used to fund further infrastructure projects across NSW. See media coverage here.
 
Leader of the Opposition in South Australia Steven Marshall announced a ten-year moratorium on fracking in the State’s South East in the event a Liberal Government is elected at the March 2018 State Election. If implemented, the moratorium on fracking would not impact existing activities in the Cooper Basin. See media release: Marshall announces ten-year moratorium on fracking in the South East.
 
The Parliament of South Australia’s Natural Resources Committee has released its final report into Unconventional Gas Development in the South East of South Australia. The report found that social licence for unconventional gas exploration and development in the region does not yet exist, and should therefore not proceed at this time. See media release and final report: NRC tables final report on Inquiry into Unconventional Gas Development in the South East of South Australia.
 

INFRASTRUCTURE, TRANSPORT AND WATER

State Developments

NSW Auditor-General Margaret Crawford has released a report criticising the State Government’s handling of the CBD and South East Light Rail Project (CSELR). Ms Crawford said that the NSW Government’s procurement strategy had failed to secure best value for money and resulted in a $517 million increase in the project cost due to “mispricing and omissions in the business case”. See media release: CBD and South East Light Rail Project.
 
NSW Minister for Transport Andrew Constance has announced a $1.5 billion capital investment in Sydney rail rolling stock, signalling, power and track works to cope with increasing demand for rail services in greater Sydney. Minister Constance said that patronage on Sydney Trains is expected to increase by 21 per cent over the next five years. See media release: Rail revolution: 'More Trains, More Services' to bust congestion.
 
Chief Executive of the Committee for Perth Marion Fulker has announced publication of a new report titled Get a Move On!. The Committee calls for a radical overhaul of Perth’s public transport system to link together six “knowledge/professional/health” hubs based around key employment centres. Ms Fulker stated that the Committee had surveyed 2,000 commuters and 40 companies, and examined academic research. The report recommends a “turn up and go” public transport model rather than timetabled services. See media coverage: Perth congestion: Think tank urges rapid transport to ease traffic squeeze.
 


HEALTH
 
Federal Developments
 
Minister for Social Services Christian Porter and Assistant Minister for Disability Services Jane Prentice released the National Disability Strategy’s Second Implementation Plan, Driving Action 2015-2018. The Second Plan continues to focus on improving outcomes for people with disability across the Strategy’s six policy outcome areas and is one of three plans within the 10-year Strategy to 2020.  See media release: National Disability Strategy Second Implementation Plan drives action for improved outcomes.
 
State Developments
 
Victorian Minister for Health Jill Hennessy announced expansion of the PrEPX study which provides people at risk of HIV access to medication. The study will be expanded to 150 rural and regional sites in Victoria, with the first site being Ballarat followed by Bendigo, Mildura and Sale in early 2017.  See media release: Expanded HIV Prevention and Care in Victoria.
 
About GRACosway
GRACosway is Australia's leading public affairs and corporate and financial communications counsel. We provide a full suite of integrated services to a range of domestic and international clients across all industry sectors, including public policy, communications, regulatory, issues management and media relations advice. From offices in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth (GRA Everingham), GRACosway’s clients benefit from the combined experience, expertise and strategic perspective of our team of professionals in addressing complex and commercially sensitive projects. For more information, visit www.gracosway.com.au.
 
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