Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Bankruptcy Legislation Amendment (Fees and Charges) Bill 2006 will facilitate implementation of the government’s cost recovery policy in providing personal insolvency services.

The Insolvency and Trustee Service Australia (ITSA) provides personal insolvency services to the community. In accordance with the government’s policy, ITSA has undertaken a review of its fees and charges to ensure that they properly reflect the cost of providing those services. That review has also enabled the government to determine which activities should attract a fee and the type of fee to apply. It is appropriate that some services should attract a fee payable by the person receiving the service while others are more appropriately paid for through an industry levy. The government has also decided that some of ITSA’s services, in particular the cost of processing debtors’ petitions and debt agreement proposals, should continue to be budget funded. Stakeholders have been extensively consulted as part of the cost recovery review and will be consulted as part of any future reviews of fees and charges.

The amendments proposed by this bill will enable me, as the portfolio minister, to make legislative instruments to determine the fees and charges that are provided in the Bankruptcy Act 1966, the Bankruptcy (Estate Charges) Act 1997 and the Bankruptcy (Registration Charges) Act 1997. The bill does not set out the amounts of any fees and charges. The amounts of the fees and charges will be set in legislative instruments to be drafted. The new fees and charges will apply from 1 July 2006.

Enabling the minister to determine the fees and charges in a legislative instrument will allow greater flexibility to reflect price changes as they occur. ITSA intends to review its fees and charges biennially unless there are special circumstances warranting an earlier review.

The bill will empower the minister to determine by legislative instrument the following fees and charges:

• the fees payable as remuneration to the Official Trustee for acting as trustee, controlling trustee or administrator in any administration under the Bankruptcy Act 1966;
• the fees payable to the Official Receiver for issuing a bankruptcy notice and exercising a power at the request of a trustee under the Bankruptcy Act 1966;
• the fees imposed on persons who are not creditors of a bankrupt or debtor for access to documents required to be filed by the Bankruptcy Act 1966;
• the fees payable for applying to be registered as a registered trustee, being registered as a registered trustee or obtaining an extension of the registration of a registered trustee;
• the fees relating to the national personal insolvency index; and
• the rate at which realisations charge is payable.

Under ITSA’s cost recovery arrangements, the realisations charge will be set at a level designed to recover the costs of the regulation of practitioners, investigation of bankruptcy fraud and administration of assetless estates. The government has decided not to apply the realisations charge to money received in debt agreements. This will assist in ensuring that debt agreements continue to be available as a viable alternative to bankruptcy for many debtors. There will be no change to the existing policy that the realisations charge must not be higher than 15 per cent.

The costs of processing applications for, and extending, the registration of persons wishing to be registered as trustees under the Bankruptcy Act 1966 and changing the conditions that may be placed on their registration are charges separately imposed under the Bankruptcy (Registration Charges) Act 1997. As the costs of application for registration and its extension are able to be determined by reference to the actual costs of providing these registration services, these fees will properly be characterised as fees for service and not as taxes. The new fees will be determined by the minister by legislative instrument as fees for those services.

The bill will also make other amendments to enhance the delivery of personal insolvency services, including:

• providing for an annual payment of the realisations charge and interest charge rather than a twice yearly payment; and
• ensuring ITSA is able to deliver more services electronically by removing possible impediments currently in the Bankruptcy Act 1966.

The bill also includes some minor technical amendments to the Bankruptcy Act 1966 to clarify or update existing provisions.

The amendments to be made by this bill have been developed following extensive public consultation. They will provide a flexible and accountable way to reflect the costs of providing personal insolvency services to the Australian community.

I commend the bill to the House and table the explanatory memorandum.

Debate (on motion by Ms Roxon) adjourned.