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Wednesday, 29 March 2006
Page: 158

Senator LUDWIG (8:06 PM) —The incorporated speech read as follows—

This bill changes the manner in which fees and charges are set for services provided by the Insolvency and Trustee Service Australia (ITSA).

Fees and charges for ITSA services are currently contained in the Bankruptcy Act and Bankruptcy Regulations.

Under the proposed framework, the fees and charges will be determined by the Attorney-General through legislative instrument.

This is an appropriate change, given that ITSA is moving to a cost recovery model of funding. Under any cost recovery model it is important to ensure that fees and charges are set at the cost recovery point and no more. Otherwise it becomes a type of backdoor tax.

The ITSA model for cost recovery - which we understand to have been developed in consultation with stakeholders - will involve a biennial review of fees and charges. Legislative instrument is an appropriately flexible method to ensure that the recommendations of these biennial reviews can be quickly adopted.

The use of legislative instrument still provides Parliament with a mechanism to disallow any increase in fees, so it does not entail a substantial loss of scrutiny.

In fact, let me use the opportunity of this debate to invite insolvency practitioners, small businesses and other stakeholders to contact the

Opposition if you ever feel that ITSA’s fees and charges are spiralling out of control. We will be keen to take up your cause in this place. It is one of Parliament’s most ancient and most important tasks to prevent unjustified imposts by Government. Labor is committed to our job of holding the Government to account for any attempt at backdoor taxation.

ITSA has been moving to cost recovery for several years now, and the details were included in the papers for the 2005/2006 budget.

Under the proposed funding model the cost of some services will be recovered through a fee payable by the person receiving the service while others will be paid through an industry levy.

This bill will allow the following fees and charges to be set by the Attorney-General:

  • fees to the Official Trustee for acting as a trustee, controlling trustee or administrator
  • fees to the Official Receiver for exercising power at the request of a trustee
  • fees for access to bankruptcy documents by persons who are not creditors of a bankrupt or debtors
  • fees associated with registration as a Registered Trustee
  • fees relating to the National Personal Insolvency Index
  • the rate at which realisation charge is payable.

The realisation charge is a levy imposed on trustees and we understand the Government’s intention is to set this at a level high enough to cover the costs of the regulation of practitioners, investigations of bankruptcy fraud and administration of assetless estates.

Certain services will remain wholly Commonwealth-funded, including processing debtors’ petitions and debt agreement proposals.

As I mentioned earlier, the fees and charges will be subject to a review every two years, or sooner if required. These reviews are to involve stakeholder consultation.

Labor supports the shift to cost recovery and this bill to enable that shift. However we will keep a close eye on developments to ensure that we have cost recovery and no more. We look forward to working with stakeholders to make sure that the Government does engage in genuine consultation and to hold the Government to account for any unjustifiable increases.

In addition to providing the framework for the transition to cost recovery, the bill will also make two other changes:

  • changing the period for payment of realisation charges and interest charges from twice yearly to annually
  • amending provisions related to forms to allow greater use of electronic service delivery.

These also seem to be sensible changes that will improve the operation of our bankruptcy system.

For these reasons, Labor is pleased to offer our support to this bill.