January « 2008 « Australian Regulatory Compliance Review from Langes+ Lawyers

January 8, 2008

Key Issues for the 42nd Parliament

The Parliamentary Library Briefing Book (pdf) is a tool to understand the new government’s expected significant program of policy development and legislative work.

After reviewing the election results, it identifies the lapsed bills (28 government, 84 private members and senators)and House inquiries.

The Briefing book (html) analyses the issues relating to the government’s stated key priorities including:
• industrial relations—for example, the repeal of WorkChoices and the abolition of Australian Workplace Agreements
• climate change—the ratification of the Kyoto Protocol and the introduction of measures such as a National Emissions Trading Scheme
• defence—the phased withdrawal of combat troops from Iraq
• housing affordability—the establishment of a National Housing Affordability Fund and implementation of tax incentives for investment in low-income and middle-income rental properties
• education—entitlements for early learning contact hours, a national curriculum, the establishment of trade training centres in secondary schools, and the reduction of university fees for certain courses
• health—the establishment of a National Health and Hospital Reform Commission to address duplication in the national health system and the augmentation of general practice clinic services.

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Posted 8th January 2008 by David Jacobson in Business Planning

January 7, 2008

A personal compliance officer

Alex is always good value but this cartoon strip set in Philip Pullman’s fantasy world brought a smile.

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Posted 7th January 2008 by David Jacobson in Compliance

January 4, 2008

APRA breach notification forms

Entities regulated by APRA must notify APRA of significant breaches of prudential requirements.

APRA
has released breach notification forms to enable APRA regulated entities to
notify APRA in writing of any significant breach of their prudential
requirements. The forms released can only be used to notify APRA of
breaches. The current online superannuation breach notification form will
continue to be available and has been updated to include the significance test.

All
regulated institutions will need to separately notify ASIC of any breaches of
their AFS licence or ASIC requirements until the new APRA online breach
notification system is finalised.

The
forms are now available on the APRA website at:

ADI Forms

General Insurer Forms

Life Insurer Forms

Friendly Society Forms

Superannuation Forms

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Posted 4th January 2008 by David Jacobson in Financial Services

January 3, 2008

Proposed Trade Practices Act changes

Assistant Treasurer and Competition Minister Chris Bowen has given a clear indication of the new Government’s approach to competition policy in this interview.

On prison for cartel operators

"The first thing we will do is this. We believe that you need to have
disincentives for cartel operations. Cartel is theft. It’s stealing off
consumers. In several countries around the world if you operate a
cartel you go to prison. Five years, in Canada, Germany, Ireland, the
United Kingdom. Ten years in the United States. So we’ll legislate to
have prison terms for cartel operations. Because the problem we’ve got
is, businesses get together and they think, we could make a lot more
money if we did this and even if we get caught, the fine will be
potentially less than what we make so we cant really lose. But you’ve
got the possibility of five years at Her Majesty’s pleasure, you’ll
think a lot more closely about entering into those side deals."

On predatory pricing

"…the ACCC has to be able to prove that that big business can make the
money back later. That’s a very, very hard thing to prove so we will
legislate to remove that requirement. It’s called the recoupment
requirement. We would legislate to remove that and we’ll really
strengthen the appropriate sections of the Trade Practices Act and make
it easier for the ACCC to bring these cases. We believe in competition,
we believe in fair competition, we don’t believe in big businesses or
any other business being able to reduce their prices so low for a short
period of time to drive everybody else out and then to be able to
charge whatever they want…

The other thing that we will do is – at the moment, if you want to take
a big business on you have to go to the Federal Court. Now, for a small
business that’s very hard. If you believe a big business is
intentionally driving you out of business so that they can then put
their prices up later you’ve got to go to the Federal Court. That’s a
very expensive jurisdiction. So we’ll make that at the Federal
Magistrates Court which is cheaper and easier and generally more user
friendly – available for those sorts of cases…

we’ll put the definition of take advantage in the law so it is very
clear for judges what the Government’s intention is by the term “take
advantage”. That will basically say, if you’ve got market power and you
use that market power to effect another business, to drive them out of
business or to damage them, intentionally then that will a breach of
the act."

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Posted 3rd January 2008 by David Jacobson in Trade Practices

January 2, 2008

Privacy in Australia

Privacy International’s 2007 International Privacy Rankings have charged Australia with "systemic failure to uphold safeguards".

Here’s their analysis in detail. (Note that the Access Card has now been scrapped).

UPDATE: 8 January 2008: Page 124 of The Parliamentary Library Briefing Book (pdf)contains a summary of likely changes to privacy regulation under the new government.

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Posted 2nd January 2008 by David Jacobson in Privacy

Can you keep legal advice private?: Rich v Harrington

You obtain legal advice about a claim by another person and tell the other person that you have obtained legal advice. When can another party suing you obtain a copy of that legal advice?

In Rich v Harrington [2007] FCA 1987 the Federal Court of Australia dealt with the right of Ms Rich to obtain copies of legal advice received by the management of PricewaterhouseCoopers (PwC) in relation to an action Ms Rich (a former PwC partner) instituted against past and present
partners of PwC under s 46PO of the Human Rights and Equal Opportunity
Commission Act 1986 (Cth) alleging conduct in breach of that Act and the
Sex Discrimination Act 1984 (Cth) following complaints of discrimination she made.

Judge Branson allowed Ms Rich access to 2 types of documents which PwC claimed were privileged:

1. In a letter to her, PwC rather than just saying PwC
had taken legal advice and had acted with the benefit of it, it disclosed the substance or conclusion of the external
advice received by PwC in an effort to bolster its position. The judge found that PwC had waived its privilege over the advice.

2. Ms Rich also challenged PwC’s claim for client legal
privilege in respect of the legal advice provided by persons
comprising its Office of General Counsel (OGC) on
the basis that the relationship between PwC and its OGC was not such as
to give rise to the privilege.

The judge concluded that the
relationship between OGC and PwC in the particular circumstances was not such as to secure the
advice of OGC concerning Ms Rich’s
allegations the objectively independent
character necessary to support PwC’s claim of client legal
privilege. OGC
was not in a position to give professionally detached advice to
the respondents concerning allegations of the character of those
made by Ms
Rich.

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Posted 2nd January 2008 by David Jacobson in Business Planning

What is a charitable institution?

In Commissioner of Taxation v Word Investments Limited [2007] FCAFC 171 the Full Court of the Federal Court of Australia dismissed an appeal by the Taxation Commissioner against the Federal Court's decision that Word Investments is a "charitable institution" within the meaning of item 1.1 of the table in s 50-5 of the Income Tax Assessment Act 1997 (Cth).

Whilst Word carried out charitable and religious objects overseas, it also carried out financial activities including financial services and a funeral business in Australia.

Judge Allsop said:

Here, on the proper understanding of the memorandum of association, the purpose of all activities was, and could only be, the religious (and charitable) purposes of Word. The evidence of the subjective motives of the directors conformed with and bolstered those constitutive purposes. On the basis of the authorities to which I have referred, the commercial nature of the activities did not necessarily destroy the capacity of Word to be characterised as a charitable institution.

The Commissioner intends to appeal to the High Court.

See TR 2005/22 for the current approach of the Tax Office.

UPDATE 11 December 2008: Commissioner's appeal dismissed by High Court here

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Posted 2nd January 2008 by David Jacobson in Business Planning, Tax