On 30 October 2018, the Revenue and Other Legislation Authority Amendment Bill 2018 (Qld) (Bill) was passed by the Queensland Parliament amending the Taxation Administration Act 2001 (Qld) (Act).
The purpose of the amendment to the Act, as set out in the Explanatory Note to the Bill is to “ensure the charitable institution registration requirements operate as intended by requiring that entities seeking registration as charitable institutions must expressly include in their Constitutions particular clauses which govern the use of the entity’s income and property“.
What is the amendment?
The amendment to the Act is quite simple in terms of what is being amended, however the consequences of this may have far-reaching negative impacts on some charitable institutions.
In short, the amendment to the Act is that while charitable institutions could previously receive all associated tax exemptions relating to charitable entities without the need for strict compliance with the restrictions as set out under section 149C(5) of the Act, the Act will now be amended to expressly require strict compliance with this section.
The restrictions under section 149C(5) require a charitable institution to ensure:

its income and property are being used solely for promoting its objects;
no part of its income or property is distributed, paid or transferred by way of a bonus, dividend or other similar payment; and
upon dissolution of the entity, its assets must be transferred to another institution eligible for registration under section 149(c) or otherwise an entity the commissioner is otherwise satisfied has a similar principle object or pursuit.

Practically speaking, these restrictions are generally contained in some form or another under the Constitution of a charitable institution. What the amendments under the Bill require is that the restrictions must now be expressly stated in a charitable institution’s Constitution.
Importantly, charitable institutions have only been given 6 months from the date Parliament passed the Bill to comply with the amendments.
What is the effect of this on charitable institutions?
The effect of the amendments is that, in order for a new charitable institution to be eligible for registration as such, the entity’s Constitution must expressly contain the restrictions as set out under section 159C(5) of the Act.
In respect of charitable institutions already registered, the entity will have 6 months to become compliant with the legislation by amending their Constitution if required to expressly provide for the restriction. If an entity is not compliant with the legislative requirements, there is the risk that they may not then be eligible for the associated tax benefits available to charitable institutions.
Subsequent Tax Ruling released
Following Parliament passing the Bill late last year, the Commissioner of Taxation released Public Ruling TAA149C.1.1 dealing with the restrictions that must be included in a charitable institution’s Constitution.
The ruling confirms that the exact wording of section 149C(5) need not be contained in a charitable institution’s Constitution and that it is sufficient for the Constitution to merely contain similar words that have the same effect.
The ruling of the Commissioner is strange, in that it is in direct opposition to the purpose of the amendments as set out in the Bill passed by Parliament. While a charitable institution may rely on the ruling of the Commissioner as a means of not being required to amend their Constitution, care should be taken with this approach as this ruling does not prevent the Court from reaching a different interpretation of the Act.
Conclusion
Even though the Commissioner of Taxation has released a Public Ruling on the amendments to the Act, which may give some comfort to charitable institutions, it is still recommended that affected entities review their Constitution to ensure they are compliant with the Act.
In particular, to satisfy all necessary requirements for the relevant tax exemptions, a charitable institution’s Constitution should make express provision for the restrictions as stated under section 149C(5) of the Act.
If you require any further information on this issue, please contact our team.
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Proposed Waste Levy Legislation
The Waste Reduction and Recycling (Waste Levy) and Other Legislation Amendment Act 2019 (available here ) was passed on 21 February 2019, and is currently set to come into force on 1 July 2019.
The Act amends the Waste Reduction and Recycling Act 2011 with the objective of introducing a waste levy intended to disincentivise the practice of long-distance transport of interstate waste for disposal in Queensland.
The Act seeks to achieve that objective by imposing a levy on 39 of the 77 Queensland local government areas – covering the locations where the majority of waste is generated and disposed of.
The levy amounts are initially:

$75/tonne for general waste (municipal solid waste, commercial and industrial waste, construction and demolition waste);
$155/tonne on Regulated Water- Category 1; and
$105/tonne on Regulated Waste- Category 2.

These amounts will increase each financial year, to $85, $165 and $115 respectively in the 2021-22 financial year.
The levy applies to all waste generated within the “levy zone” and any waste produced in a non-levy zone if it is disposed of within the levy zone. Any waste brought from interstate will also be charged the levy, regardless of where it is disposed of in Queensland.
A number of waste streams are exempt from the levy including:

waste generated by an environmentally relevant activity disposed of at a facility operated for the sole purpose of disposal of that waste;
waste from a declared natural disaster;
waste from serious local events;
asbestos-contaminated waste;
litter and illegal dumped waste collected by government, councils and plantation licensees;
dredge spoil; and
clean earth (including acid sulfate soils).

Additionally, some other waste streams may be exempted from levy payments, by separate approval and discounts on the levy will also be offered for recycling activities, subject to certain conditions.
The levy is payable to the State by operators of levyable waste disposal sites, and it is expected the levy will be passed on to disposers.
Ratepayers however should not be subject to any additional costs for disposal of household waste as the State government has committed to pay Local Governments a rebate of 105% for the cost of waste disposal. The State can however withhold such payments in certain circumstances.
Should you require specific advice regarding the implications of this legislation, please contact a member of our Government Services Team
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In March 2019 the Department of Local Government, Racing and Multicultural Affairs released the Report “Local Government Reforms: Key amendments current under consideration” The report sets out a number of key amendments which are currently under consideration as a next tranche of the Belcarra reforms, these include:

Compulsory preferential voting;
Compulsory candidate training;
Proportional representation in undivided councils;
Tighter regulation of discretionary funds;
Campaign spending caps; and
Clarification of Conflict of Interest / Material Personal Interest provisions.

Whilst the proposed amendments to preferential voting, and to require compulsory training for prospective councillors are likely to grab headlines, the proposed clarification of the conflict of interest provisions are likely to bring some comfort to Local Governments across Queensland, who have been grappling with the complexities introduced by the current conflict of interest process.
A copy of the Report can be found here
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The Court of Appeal has overturned a previous decision of the Supreme Court in relation to a water rates bill for $50,000 (decision available here ).
The case raised a number of issues, however the principle issue in questions was the validity of the Local Government’s decision to charge a fixed price per unit of land, and a consumption price for each kilolitre of water consumed above an allocated amount.
Primary Decision
MacDonnells Law’s review of the previous decision is accessible here
In the first instance, the primary judge found a conflict in the Local Government Regulation between section 101(1)(a) and 101(2)(b)(ii). The primary judge found that the Local Government was required to either charge on the basis of only the water consumed or adopt a 2 part charge.
Court of Appeal Decision
The Court of Appeal held that there was no conflict between section 101(1)(a) and 101(2)(b)(ii).
The Court found that:
1. a Local Government could either charge for water service:
a. solely according to water used; or
b. by levying a fixed utility charge, in addition to an amount for water used (a two part charge);
2. the charge described in the example for paragraph 101(2)(b)(ii) is incompatible with working out a charge as described in that section, and should be ignored in interpreting the section;
3. the water charge levied by the Local Government, which charged a fixed price per unit of land and a consumption price for each kilolitre of water consumed above that amount, was a valid charge and levied in compliance with section 101(2)(b)(ii);
4. the Local Government did not fail to comply with the principles in section 4(1) of the Local Government Act in failing to set out in its Revenue Statement the range of charging options, the choice made by the Local Government, and the reasons for that choice; and
5. in any event, a failure to adhere to the local government principles in section 4(1) of the Local Government Act would not invalidate the Water Charges.
Implications
This decision confirms that:

Local Governments have a wide discretion to determine how to levy charges for water;
Local Governments are only required to state in a Revenue Statement those items set out in section 172 of the Regulation; and
a failure to adhere to local government principles will not invalidate a Water Charge.

Should you have any questions in relation to this decision, please do not hesitate to contact a member of our Government Services Team here
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