Banking Royal Commission: In 2018, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry conducted hearings into consumer lending, financial advice, loans to small and medium sized enterprises, financial service entities in regional and remote communities, superannuation, insurance and general policy questions. The interim report was tabled in September 2018, with the final report expected by 1 February 2019.

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Authorised deposit-taking institutions (ADI): In August 2018, the Australian Prudential Regulation Authority (APRA) sought feedback on proposals to promote increased transparency of ADI capital ratios and their comparability with other domestic and international markers. APRA will consult on draft revised prudential standards in 2019. Also, APRA has altered reporting standards for counterparty credit risk and adopted a simplified approach for measuring counterparty credit risk exposures for ADIs with immaterial levels of counterparty credit risk. The new prudential and reporting standards commence on 1 July 2019.

Ownership limit for banks: In October 2018, the Federal Parliament introduced a Bill that, if enacted, will increase the current maximum shareholding limit for ADIs and other financial sector entities from 15% to 20%. It also introduces a streamlined approval process for new financial sector companies.

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Corporate and financial sector misconduct: In September 2018, the Federal Government released draft legislation that, if enacted, will implement many of the recommendations of the ASIC Enforcement Review Taskforce to strengthen the penalty regime for corporate and financial sector misconduct, following the Taskforce's finding that the current penalty regime is "inadequate" for addressing the "severity of misconduct" or acting as a "credible deterrent".

Read our Treasury proposes tougher penalties for corporate and financial sector misconduct

Decryption law: In August 2018, the Federal Government released draft legislation requiring tech companies with end-to-end encrypted messaging services to cooperate with law enforcement agencies. Industry and rights groups, who opposed the proposed law, are waiting for the Government's response.

Read our Australian Government releases draft encryption legislation

Digital platforms: A final report into the Digital Platforms Inquiry, charged with looking at the effect that digital search engines, social media platforms and other digital content aggregation platforms have on competition in media and advertising services markets, is due by 3 June 2019.

Consumer data right (CDR) rules: The first phase of the CDR, allowing consumers to access particular data, including transaction, usage, and product data, in a useful digital format, commences on 1 July 2019. The rules will begin in the banking, energy and telecommunications sectors, and will be rolled out to other sectors over time. The Office of the Australian Information Commissioner and the Australian Competition and Consumer Commission will have separate but complementary enforcement roles.

Read our The ACCC's Consumer Data Right Rules Framework

Improved conveyancing technology: Technology is increasingly being used in conveyancing practice, enabling integration between searches and enquiries functions, conveyancing matter management and electronic conveyancing. Reliance on, and ongoing development of, technology-based practices is expected to increase in 2019. Further, in 2019, it is anticipated that Sympli, a new Electronic Lodgement Network Operator (ELNO), will commence operating. Currently, the sole Australian ELNO is Property Exchange Australia (PEXA). The aim is for all ELNOs to share information to facilitate electronic settlements even though parties may be using different platforms. 

Multinational anti-avoidance compliance activity: It is likely the ATO will continue to focus on tax avoidance by multinational enterprises operating in Australia during 2019. In particular, the ATO can be expected to continue applying the enhanced transfer pricing rules, the multinational anti-avoidance law (directed at significant global entities where a foreign entity makes sales directly to Australian customers without attribution of that income to an Australian permanent establishment), and the diverted profits tax.

Stapled structures: On 20 September 2018, the Federal Government introduced a Bill to give effect to various integrity measures aimed at foreign investors. The changes, which are subject to transitional rules, include the imposition of a 30% managed investment trust withholding tax rate on: distributions of some income from cross-staple arrangements (subject to various exceptions); distributions attributable to trading income derived through other trusts; and, income and capital gains from agricultural land and residential premises. The sovereign immunity and superannuation fund withholding tax exemptions are restricted to payments by entities in which the non-resident has a less than 10% interest.

Read our Long-awaited integrity package on taxation of stapled structures released

Hybrid mismatch rules: As part of the base erosion and profit shifting project, the Organisation for Economic Cooperation and Development developed hybrid mismatch rules aimed at preventing multinational companies from gaining an unfair competitive advantage by avoiding income tax or obtaining double tax benefits through hybrid mismatch arrangements. These arrangements exploit differences in the tax treatment of an entity or instrument under the laws of two or more tax jurisdictions. Subject to some exceptions, the rules apply to affected payments after 1 January 2019, and to income years commencing on or after 1 January 2019.

Read our Exposure draft legislation for Australian "hybrid mismatch rules" released

New and impending laws, such as the Foreign Influence Transparency Scheme Act 2018 (Cth) and the Modern Slavery Bill 2018 (Cth), 2019 will be implemented in 2019, and there is interest in how courts will interpret the requirements, if tested. Also, the ASX Corporate Governance Council is expected to release the fourth edition of the Corporate Governance Principles and Recommendations. The draft released in May 2018 retained the same eight core principles contained in the third edition, although the Council has proposed significant changes to principle 3 (a listed entity should act ethically and responsibly) to address issues of corporate values and culture, social licence to operate with stronger reference to stakeholders beyond shareholders, and specific recommendations on whistleblowing and anti-bribery and corruption.

Read out Corporate governance beyond shareholder interests

IP Australia released exposure draft legislation to implement the second part of the Federal Government's response to the Productivity Commission's final report on its inquiry into Australia's IP arrangements. Changes include amending inventive step requirements and provisions for compulsory licencing for patents, as well as abolishing the innovation patent system. A Bill is expected in late 2018 or early 2019. The Copyright Amendment (Online Infringement) Bill 2018 (Cth) passed the lower House in October 2018 and was referred to a Senate Committee for review, with the Senate's report due in late November 2018. The Bill aims to allow copyright owners to enforce their rights in the online sphere, expanding the threshold test to catch more online locations that are deliberately infringing copyright.

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Foreign exchange inquiry: Following a World Bank report that found Australia was the third most expensive G20 country for consumers and small businesses to transmit money, the ACCC will examine the supply of foreign currency conversion services. The final report into the inquiry is due May 2019.

Class actions: With inquiries by the Victorian Law Reform Commission and the Australian Law Reform Commission into Australia's class action regime in 2018, there is likely to be pressure for reform in 2019, particularly in relation to litigation funding and the management of class actions. However, progress may be delayed by the impending federal election.

Infrastructure: Further development of major construction projects will occur in the Australian infrastructure market in 2019, including North East Link, Melbourne Airport Rail Link, Sydney Metro West and the Victorian Outer Suburban Arterial Roads project.

Security of payment laws: The New South Wales Government has proposed changes to the Building and Construction Industry Security of Payment Act 1999 (NSW) that are consistent with the recommendations in the Murray Review, though not primarily created specifically to give effect to that review. The Bill seeks to facilitate greater confidence within the industry about the Act’s ability to facilitate cash flow along the construction chain.

The Australian Capital Territory, the first Australian jurisdiction to join the UN-backed Powering Past Coal Alliance, has announced a renewable energy target (RET) of 100% and net zero emissions by 2045. Also, the NSW Government has launched the NSW Emerging Energy Program, aiming to scale back coal and transition to renewable energy by 2040. By maintaining the current rate of solar PV and wind deployment, Australia is forecast to comfortably exceed the 2020 RET of 33,000 GWh, achieve 26% emissions reduction by 2020/21 and meet its Paris greenhouse emissions target in 2024/25. The ACCC will continue its measures to improve transparency across the gas market supply chain, including its trial measures of publishing the LNG netback price on its website. The ACCC will also continue to push for implementation of its electricity recommendations arising from the Retail Electricity Pricing Inquiry Final Report.

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