26 Jun 2014

Doing Business in Australia: The nine main regulators

by Linda Evans, Bruce Lloyd

From competition to investment to taxation, you need to understand which regulator will affect your business in Australia.

The Australian Competition and Consumer Commission (ACCC)

The ACCC administers the Competition and Consumer Act 2010 (Cth) (which incorporates the Australian Consumer Law, see page 47 for more information). In broad terms, the objectives of the Act are to promote competition and, together with similar provisions in State and Territory legislation, fair trading, and provide for consumer protection. It covers anti-competitive and unfair market practices, company mergers or acquisitions, product safety and product liability, and third party access to facilities of national significance.

The Australian Prudential Regulation Authority (APRA)

APRA is a statutory authority which was formed in 1998 to promote the prudent management of financial institutions. Its regulatory function extends to the supervision of banks, life insurers, building societies, credit unions, friendly societies and superannuation funds. APRA has the power to require financial organisations to observe prudential standards, and may intervene, where necessary, to protect the interests of depositors, policy-holders or members. In addition, APRA has far-reaching powers of investigation, intervention and administration.

Australian Securities and Investments Commission (ASIC)

ASIC is the sole regulator of Australian registered companies and one of three Federal Government bodies that regulate financial services.

ASIC administers the Corporations Act 2001 (Cth), the law regulating the incorporation, operations and management of companies. ASIC is therefore primarily responsible for regulating the conduct of corporations in Australia, and is also responsible for supporting the integrity of and fairness in company affairs and in financial markets.

ASIC’s consumer protection function extends to the financial system by regulating the advising, selling and disclosure of financial products and financial services to consumers.

Australian Securities Exchange Limited (ASX)

The ASX was formed in 1987 and is the second largest securities exchange in the Asia-Pacific region. The ASX has markets trading in equities, derivatives, futures and fixed interest securities.There are branches of the ASX in Sydney, Melbourne, Perth, Chicago and London.The ASX listing rules ensure that the constitutions of listed companies include provisions regarding shareholder rights, such as the necessity of consulting shareholders over major transactions, and also ensure that listed companies observe certain standards with respect to market awareness and the provision of information.

Australian Taxation Office (ATO)

The Commissioner of Taxation has the overall responsibility for administering the Australian income tax system. The ATO, under the Commissioner of Taxation, is the statutory authority responsible for administering Australia’s Federal taxation system and is also the primary collection agency for the Australian Government.

Australia’s income tax law consists primarily of the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth) and the Taxation Administration Act 1953 (Cth), as well as ATO administrative taxation rulings and court decisions. Fringe benefits provided to employees are subject to a separate taxation regime under the Fringe Benefits Tax Assessment Act 1986 (Cth). Australia’s goods and services taxation law consists primarily of A New Tax System (Goods and Services Tax) Act 1999 (Cth). The current income tax system involves taxation of income and capital gains of individuals and businesses.

Australia has recently introduced a Mineral Resource Rent Tax (MRRT) which seeks to impose a tax on certain iron ore and coal mining operations. Another recent change has the been the extension of the Petroleum Resource Rent Tax (PRRT) regime. However, as at the date of publication, the newly elected Federal Government has legislation to repeal the MRRT before the Senate.

The ATO administers the process of annual taxation self-assessment and conducts random audits to verify individual and company assessments. The ATO also collects excise on tobacco, fuel and petroleum products and alcohol, administers the Higher Education Loan Programme and the Private Health Insurance rebate, and has responsibility for the fiscal regulation of Australia’s superannuation system.

Foreign Investment Review Board (FIRB)

The FIRB is a non-statutory organisation formed in 1976 within the Federal Treasury to provide foreign investment policy advice to the Treasurer and the Australian Federal Government.

The FIRB’s function is to assess investment proposals submitted by foreign interests and to make recommendations to the Treasurer on the compatibility of those proposals with Government policy and the Foreign Acquisitions and Takeovers Act 1975 (Cth). FIRB also provides information on the Government’s policies to prospective foreign investors and potential investors alike.

Reserve bank of Australia (RBA)

The RBA is a statutory authority performing the country’s central banking functions.The Bank is wholly owned by the Australian Federal Government and maintained assets of more than A$57,177 million as at October 2013.The RBA has two broad areas of responsibility: monetary policy and financial stability.

The RBA’s monetary policy is primarily directed at maintaining inflation rates at the level most conducive to sustainable growth. The RBA’s financial stability policy aims to prevent excessive risks in the financial system and to limit the effects of financial disturbances when they occur. Within this role, the RBA has a particular responsibility for maintaining the efficiency of the payments system. The RBA is governed by the Reserve Bank Board and the Payments System Board.

The RBA plays an active role in financial markets and the payments system and is responsible for issuing Australian currency notes. The Banking (Foreign Exchange) Regulations 1959 (Cth) confer upon the RBA responsibility for foreign exchange control.

IP Australia

IP Australia is the Federal Government agency that grants rights in patents, trade marks and designs in Australia. IP Australia is a division of the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education but operates independently. It incorporates the Patent, Designs and Trade Marks Offices. The Plant Breeder’s Rights Act 1994 (Cth) system is administered by the Plant Breeder’s Rights Office within IP Australia.

.au Domain Administration (auda)

The .au Domain Administration is an Australian non-profit company formed in 1999 as the policy authority and industry self-regulatory body for the .au domain space.

This article is taken from Clayton Utz's Doing Business in Australia, the essential guide for investors and business exploring commercial opportunities in Australia.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.