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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).
Welcome to Edition 56 of Boardroom Brief.
This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
A short week this week due to the Easter break.
JMEI receives royal assent. Last week, the Junior Mineral Exploration Initiative (JMEI) – introducing certain tax concessions for junior explorers - was passed by Parliament and received expedited royal assent. Junior Explorers will need to lodge their applications between 17 April 2018 to 16 May 2018 to be eligible in respect of greenfield exploration expenditure incurred in the year ending 30 June 2018. Junior explorers considering a capital raise in the 2019 year should have their applications (and associated supporting working papers) ready ahead of the 1 June 2018 opening date for applications.
ASIC publishes indicative levies for 2017-2018. Ahead of issuing final industry funding invoices in January 2019 (industry funding arrangements having become law on 1 July 2017), Directors should note ASIC’s 2017-18 indicative levies, which were published last week, of what regulated sectors will pay towards ASIC's regulatory costs incurred in the previous financial year. Some organisations will pay a flat levy, with the cost of regulating a subsector shared equally among the entities operating in that subsector. Others will pay a graduated levy, with the entity's size or level of business activity determining their share of costs. These estimates will likely change when ASIC’s actual costs become known in November.
Government announces package of measures for tax treatment of stapled structures. The package of measures seeks to address the perceived sustainability and tax integrity risks posed by 'stapled structures'. It also limits certain broader tax concessions currently available to foreign investors, so that the potential reach of the measures is not limited to investments made by, or in, stapled structures. All elements (except the thin capitalisation measures) will commence on 1 July 2019. A transitional period of 7 years for stapled structures and 15 years for infrastructure assets will apply for investments in existence on 27 March 2018. The thin capitalisation element will apply to income years on or after 1 July 2018 (with no transitional period). See G+T article “Flip-flopping on policy – the Australian Government’s approach to MITs and stapled structures” for more information on who the package affects, the measures themselves and what fund managers should do to prepare for them.
Bill to add competition to ASIC’s mandate introduced into Parliament. The Treasury Laws Amendment (Enhancing ASIC's Capabilities) Bill 2018 (Cth) was introduced into the House of Representatives – the Bill, in part, to effect the Government’s addition of competition to ASIC’s mandate - and received its second reading speech on 28 March 2018. See the Explanatory Memorandum for the Bill and also Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer’s, media release.
China imposes new tariffs on US imports this week. Last month, US President Donald Trump imposed new tariffs on foreign steel and aluminium imports and announced plans for further tariffs on up to $60 billion in Chinese imports as well as potential limits on Chinese investment in the US. In response, China has now retaliated with new tariffs of up to 25% on 128 US imports worth $3 billion. The Chinese tariffs took effect on Monday. The escalation of trade tensions between the world’s largest economies is creating a significant headwind for the global markets and Australia certainly won’t be immune. A recent article in the AFR reported that in terms of economic impact, a US/China trade war could be worse than the 2009 recession, with the potential to cost 285,000 jobs in Australia.