By Sandra Barry >>

The states and territories have passed separate legislation restricting domestic interstate travel, which has significant implications for some employers.

The following states and territories have implemented interstate border restrictions:

• Queensland from 12am on Wednesday, 25 March 2020

• South Australia from 4pm on Tuesday, 24 March 2020

• Tasmania from Friday, 20 March 2020

• Western Australia from Tuesday, 24 March 2020

• Northern Territory from 4pm on Tuesday, 24 March 2020.

Each of these jurisdictions have declared the restrictions will apply to all travellers arriving by air, land and sea. Travellers will need to comply with strict quarantine requirements or be refused entry. 

Each jurisdiction has declared that the strict border restrictions and quarantine requirements will not apply to persons who fall within ‘essential travellers’ exemptions.

Which states and territories have not implemented interstate border restrictions?

New South Wales, Victoria and the Australian Capital Territory have announced that their borders will remain open to interstate travellers. However, based on the rapid changes occurring as states and territories attempt to deal with coronavirus, it is highly likely that some form of border restrictions in these jurisdictions will also be implemented.

Essential traveller exemptions

The rules for interstate border restrictions are slightly different in each state and territory but exemptions for essential travellers appear to be relatively the same. The essential travellers categories are generally:

• national and state/territory security and governance

• health services and essential medical treatment

• transport, freight and logistics services

• skills critical to maintaining key industries or businesses

• emergency services workers

• cross border community members (for the purposes of work and obtaining essential goods and services)

• passing through (excluding Tasmania)

• compassionate grounds

• FIFO workers (that are linked to an essential traveller category and are able to provide evidence of their employer and location they are travelling).

Essential traveller exemption applications

At the time of writing this article, the legislative directives for each state and territory are not fully in place or complete. Due to the complexities in implementing border restrictions, it is likely that these directives and legislative provisions will change rapidly.

In Queensland, essential travellers are required to complete an online application to obtain a Queensland Entry Pass and have documentation supporting their status available. Queensland Police have also indicated they are working on an ‘identifier’ (a visible sticker) to place on vehicles regularly passing across the border. Police have also closed roads to support the Queensland restrictions.

In Tasmania and the Northern Territory, essential travellers are required to complete arrival forms at available border access points. In some circumstances, essential travellers will need to have applied to the relevant government authority to obtain the necessary exemptions before travel.

South Australia has only stated that police will be stopping persons at checkpoints, taking details and making enquiries as to the person’s movements and reason for travelling into South Australia. Because of the limited guidance, we recommend that essential travellers have documentation supporting their status available.

In Western Australia, essential travellers are required to complete forms on arrival at points of disembarkation, road checkpoints or stations. For persons entering by road, there is a further requirement that only ‘designated roads’ be used (Victoria Highway or Eyre Highway).

Quarantine conditions for essential travellers

Tasmania requires essential travellers to comply with strict quarantine conditions, including self-accommodating and monitoring symptoms for COVID-19.

At this stage, it does not appear that essential travellers need to comply with quarantine conditions in other state and territories. However, this position may change rapidly.

What this means for employers

Employers with interstate operations will need to ensure that travel complies with interstate border restrictions and that operations fall within the essential traveller categories.

In Queensland, employers need to ensure that they have provided employees required to travel interstate with a Queensland Entry Pass.

For other interstate travel, employers will need to consider what application or exemption forms and documentation needs to be available to employees ahead of interstate travel. This will include determining whether exemptions need to be submitted and granted by relevant authorities before travel.

There are strict monetary penalties for both individual employees (of up to $62,800) and corporate employers (of up to $250,000) where border restrictions and essential traveller requirements are not complied with.

Employers with interstate operations affected by the interstate border restrictions can contact us for further advice.

www.cgw.com.au

Sandra Barry is a senior associate at Cooper Grace Ward Lawyers, based in Brisbane. Input into this report also came from Cooper Grace Ward partners Belinda Winter and Annie Smeaton.

THE Australian Taxation Office (ATO) has welcomed the decision of the High Court on March 11 in relation to the meaning of 'associate' for tax purposes, with broader relevance to dual listed companies, staples and other similar structures.

The relevance in the context of BHP was in relation to the Australian taxation of a relatively small component of its profits made by a marketing-hub established in a low-tax jurisdiction by the BHP dual-listed group BHP Group Limited, formerly known as BHP Billiton Limited in Australia (BHP Australia) and BHP Group Plc, formerly known as BHP Billiton Plc, in the UK (BHP UK), namely the profits from the on-sale of commodities from Australian subsidiaries of BHP UK.

Following the simplification of their structure announced by BHP as part of the transfer pricing settlement with the ATO in 2018, BHP Australia is already being taxed on 100 percent of the profits of the marketing hub in Singapore from the sale of Australian commodities owned by BHP Australia, the vast bulk of its Australian operations. 

This High Court  decision now finalises the dispute between the ATO and BHP in relation to the on-going Australian taxation of the marketing hub profits, which will be fully taxed in Australia.

The decision in BHP Billiton Limited v Commissioner of Taxation saw the High Court confirm the Commissioner’s position that BHP Australia is taxable on its share of the marketing hub’s profits from sales of commodities acquired from Australian subsidiaries of BHP UK as well as those acquired from Australian subsidiaries of BHP Australia. This is because BHP Australia and BHP UK are associates of each other and the marketing hub in Singapore.

“This decision means that BHP Australia was taxable on its share of profits derived by the marketing hub from selling commodities mined in Australia which it purchased from BHP UK's Australian subsidiaries,” Deputy Commissioner of Taxation for Public Groups Rebecca Saint said. 

“The resolution of this case in conjunction with BHP’s earlier structural simplification and $529 million transfer pricing settlement [for the years 2003 to 2018] means this long running dispute is now concluded, and Australians can have full confidence that BHP, as one of Australia’s largest companies, is paying full tax on its profits from the sale of Australian commodities," she said.

“Complex domestic and international tax structures of global multinationals have been a focal point of the ATO’s Tax Avoidance Taskforce. This decision validates our robust approach of ensuring complex arrangements comply with Australian taxation laws and that large corporate groups are paying the correct amount of tax.”

This case highlights the Tax Commissioner’s continued commitment to protecting the Australian tax base and willingness to hold large well-resourced multinationals operating in Australia to account to ensure that those multinationals pay their fair share of tax in Australia rather than diverting profits offshore to no-tax or low-tax jurisdictions.

“We are committed to taking strong action to ensure multinationals comply with the Australian tax regime and we are prepared to litigate to protect the integrity of the Australian tax system,” Ms Saint said.

The precedent set by the decision provides clear guidance that will assist the ATO in its efforts to ensure that other multinationals pay their fair share of tax in Australia. The decision will also have broader implications for other taxpayers affected by taxing provisions that use the concept of an 'associate'..

The High Court decision can be read in full here.

www.ato.gov.au

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THE Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell has warned that if big businesses continue to flout reasonable payment terms, she will have no choice but to recommend federal legislation requiring all businesses to be paid in 30 days.

“In the past week, Telstra and Rio Tinto have moved to 20-day payment terms for SMEs and there is no reason why other big businesses can’t do the same,” Ms Carnell said.

“Australia’s big businesses have had more than enough chances to do the right thing, so if they can’t follow Telstra and Rio’s lead, I will have no choice but to recommend legislation requiring 30 day payment terms across the board. 

“Late payments by large businesses to small businesses account for 53 percent of all invoices. That’s $115 billion paid late to small businesses – equivalent to $7 billion of working capital to Australian small businesses every year," Ms Carnell said.

“The economic case for faster payment times is clear, not just in Australia but internationally. When the Obama administration moved to 15 day payment times, a Harvard Business School study found that created 75,000 jobs and delivered an additional $6 billion to US workers’ pay packets.

“Our recently released position paper outlines the key preliminary findings of our Supply Chain Financing Review and we are seeking feedback on that before making formal recommendations. The final report will be handed down at the end of March.

“So far, our Supply Chain Finance Review has revealed the voluntary Supplier Payment Code is just not working," she said.

“The Code is voluntary, there is no compliance monitoring and it’s actually unenforceable.

“The fact is that all businesses, regardless of their size should be paid in 30 days and supply chain finance should be available to those small businesses that want to be paid faster.”

Contributions to the Supply Chain Financing Review can still be made via This email address is being protected from spambots. You need JavaScript enabled to view it.

www.asbfeo.gov.au

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the opportunity to advocate for stronger unfair contract term protections for small businesses, as the Federal Government begins its next phase of consultation.

“The government has now released its regulatory impact statement, which broadly reflects the recommendations made by my office throughout this process,” Ms Carnell said.

“We look forward to continuing to champion improved protections for small business as part of this consultation process, but it’s been a long time coming. While we support this thorough process, the time for meaningful change can’t come soon enough. 

“Small businesses have waited long enough, so we’d encourage the government to make this a priority. There’s certainly room for significant improvements to the current unfair contract term legislation to help level the playing field," Ms Carnell said.

“While my office is able to resolve many contract disputes by using the unfair contract term provisions as a lever, on occasions when these negotiations fail, a small business is forced to seek a ruling through the courts.

“This can be very costly for small businesses and when a larger company has more resources to delay proceedings, this can lead to small businesses giving up or going out of business.

“That’s why it is our position that regulators should be given enhanced enforcement capabilities to determine and deal with unfair contract term cases," she said.

“Unfair contract terms should be made illegal and penalties should apply to breaches.

“The legislation should be extended to cover contracts up to $5 million, as the most common standard form contract for a small business is with its financial services provider. This has also been supported by the Australian Financial Complaints Authority (AFCA) which has raised the cap for complaints it can consider to $5 million," Ms Carnell said.

“Removing the current exemption for insurance contracts from the unfair contract term regime as recommended by Commissioner Hayne, also makes logical sense.

“My office will vigorously advocate for a change in how small businesses can challenge unfair contract terms outside the court system in our comprehensive submission to the consultation process.”

www.asbfeo.gov.au

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