Malarndirri McCarthy (NT, Australian Labor Party, Assistant Minister for Indigenous Australians) Share this | Hansard source

I'm more than happy to repeat what I said in my summing-up speech on the concerns raised. Schedule 5 will improve the operation of the measure by ensuring it operates on from royal assent, thereby providing greater certainty with regard to the treatment of past transactions. The original start date was 15 September 2022. Secondly, it clarifies that it is targeted to artificial and contrived arrangements, mitigating any unintended consequences arising from the original schedule, including clarification that a distribution funded by capital raising in response to a regulatory requirement will not be captured by the legislation. It penalises only the part of the distribution that was funded by the relevant capital raising rather than the entire distribution.

These amendments address feedback provided to the committee, and I'll just refer to that. The amendments limit the amount of a distribution that is made unfrankable to the portion of it that was funded by the relevant equity issue. Before the amendments, the whole distribution would be made unfrankable, even if it were only partially funded by relevant capital raising. The amendments clarify that the principal effect of an equity issue must have been to fund a substantial part of a distribution, as opposed to any part of a distribution. The amendments clarify that the purpose, other than incidental, of an equity issue must have been to fund a substantial part of a distribution, as opposed to any part of a distribution. The amendments clarify that the measure does not apply to an equity raising or distribution made in response to a regulatory requirement, directive or recommendation—for example, one by the Australian Prudential Regulation Authority to authorised deposit-taking institutions. The amendments change the start date of schedule 5 so that it applies on a prospective basis to distributions made after the date of royal assent rather than to distributions made on or after 15 September 2022. These amendments contain important narrowing of dates.