DCCL COVID-19 Resource Centre: Issue 3
Issue date: 21 April 2020
This is our third publication of useful resources for our clients during the current coronavirus disruption. Our first publication and second publication are available on our website. Clients are welcome to raise specific issues which they would like us to comment upon in future publications.
New tax incentives: accelerated deductions for certain IP expenditure
Changes introduced by the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) mean that between now until 30 June 2020, expenditure related to patents, registered designs or copyright, with a cost of less than $150,000 per asset, may be eligible for an immediate 100% deduction under the Instant Asset Write-off. Alternatively, if the Instant Asset Write-off is not available, between now and 31 June 2021, immediate deductions of 50% on expenditure related to patents, registered designs or copyright may be available. The remaining 50% would then depreciate across the statutory effective life of the asset. Further details are provided in an article published on our website.
Privacy considerations surrounding the Australian contact tracing App
The Australian government’s decision to launch a contact tracing App has raised some privacy concerns within the community. Whilst the Privacy Act 1988 (Cth) sets clear parameters for the use by government of personal information which it collects, there are a number of factors which could influence the effectiveness of the Privacy Act in the context of this initiative. These factors include (1) how the information will be used, (2) how it will be stored, and (3) how long it will be retained. In our website article we comment further on these factors, and on the provisions in the Privacy Act likely to be of particular relevance in connection with a contact tracing App.
Australian IP licences for COVID-19 technology
A group of scientists, lawyers, and entrepreneurs have called for organisations to effectively remove intellectual property rights as a potential obstacle to the rapid development of a COVID-19 vaccine. An article published on our website considers this “Open COVID Pledge” from an Australian perspective, and also provides information about the availability of compulsory licences under the Australian Patents Act.
Mandatory Code of Conduct for Australian SME commercial tenancies
The National Cabinet has agreed on a mandatory code of conduct relating to SME commercial leases (Code). The Code provides a series of guidelines and applies to SME commercial, retail and industrial tenants (including franchisees) with turnover of $50 million or less who are an eligible business for the JobKeeper Program. In summary, the Code provides that for the duration of the pandemic and over a subsequent reasonable recovery period:
- landlords and tenants must not terminate leases due to non-payment of rent, including non-payment of outgoings, GST and other contributions;
- landlords are restricted from calling on security deposits;
- any penalty interest on late payment of rent is prohibited;
- any waiver must account for at least 50% of the reduction provided to the tenants;
- rental deferrals must be repaid over the balance of lease term and a minimum 2 year period; and
- landlords are to agree to a freeze on rent increases (except for retail leases based on turnover rent).
An article on our website provides further comment on the Code.
Foreign acquisition of developed commercial property in Australia now requires approval from the Foreign Investment Review Board
The threshold amounts which determine whether Foreign Investment Review Board (FIRB) approval is required for particular investments by foreign persons in Australia have been reduced to $0 for agreements entered into after 10:30pm AEDT on Sunday, 29 March 2020. The temporary changes mean that FIRB approval is now required for transactions for the acquisition of developed commercial property or businesses with a value of less than $275 million. We have published an article on our website which comments further on these measures.
Update: Further ACCC interim authorisations issued to certain industries for actual or potential cartel conduct
In our last newsletter publication (and website article), we wrote about interim authorisations the Australian Competition and Consumer Commission (ACCC) had granted to certain industries (including to banking and insurance providers, supermarkets, medical device suppliers, pharmaceutical suppliers, internet providers, airlines and shopping centres) seeking to engage in what, without an authorisation, might have otherwise been considered prohibited cartel conduct. Further interim authorisations have now been granted, including to:
- Public and private healthcare providers, which allows providers based in Victoria and in Queensland to engage in State-wide coordination of healthcare services to maximise each State’s healthcare capacity during the period of the COVID-19 pandemic.
- Securitisation, which allows the Australian Securitisation Forum (and its members) to develop and provide a coordinated industry response to ensure that smaller lenders can continue to support their small and medium enterprise clients impacted by COVID-19 by providing them with continued access to funding markets.
- Private healthcare and life insurance, which allows Private Healthcare Australia Limited and Members Health Fund Alliance (and their members) to share information and develop a coordinated response in relation to the COVID-19 pandemic. Some of the measures contemplated by the interim authorisation include the broadening of health insurance coverage to cover various COVID-19 treatment and alternative treatment options such as telephone consultations which substitute for face-to-face interaction. A separate interim authorisation to the Financial Services Council (on behalf of its current and future member life insurance companies) has been granted to ensure that frontline healthcare workers are not denied life insurance, and will not be charged higher premiums or have benefits excluded, purely due to their exposure or potential exposure to COVID-19.
Our previous publications
A link to our 8 April 2020 Legal Resource Centre publication is here. In brief, it provides information about:
- COVID-19 privacy issues in the workplace. More information is available here.
- Contractual obligations in relation to COVID-19, including force majeure and frustration. More information is available here.
- COVID-19, cartel conduct and ACCC interim authorisations issued to various industries. More information is available here.
- Consumer rights and business obligations regarding COVID-19 event cancellations. More information is available here.
- COVID-19 medicines which have received exemptions from registration on the Australian Register of Therapeutic Goods. More information is available here.
- Changes to Corporations Act, Bankruptcy Act in relation to insolvency and financial distress. Details are set out in the Federal Government’s Fact Sheet.
- Changes to the foreign investment framework which are designed to prevent corporate raiding of distressed Australian companies by foreign investors.
- Estate planning and business succession planning. More information is available here.
A link to our 31 March 2020 Legal Resource Centre publication is here. In brief, it provides information about:
- The continuing operation of the Australian courts. Up-to-date information is available from the Judicial College website.
- The use of electronic signatures (more information is available here).
- ACCC information on the impact of COVID-19 for consumers and businesses (more information is available here).
If you have any queries, please get in touch with one of the principals in our COVID-19 Legal Resource Team:
Dr Gordon Hughes AM
P: +61 3 9254 2582
Craig Finlayson CTA
P: +61 3 9254 2716
P: +61 2 9293 1048