The annual statement needs to address a range the legislation will inappropriately place burdens of mandatory criteria, be signed off by a member of on smaller businesses. This is because businesses the board of directors, and would be published on a within the supply chains of larger businesses will government website. also be captured by the reporting requirements. The statement must identify the reporting entity’s The draft legislation is currently being reviewed structure, operations and supply chains, in addition to: by a parliamentary senate committee and no Melissa Adler: HIA Executive Director – • the risks of modern slavery practices in the commencement dates have been set. Industrial Relations and Legal Services operations and supply chains (beyond tier one HIA is working to clarify how residential builders suppliers) of the reporting entity and any entities it may be impacted by the laws should they proceed. owns or controls • actions taken to assess and address modern Now law: Payment of GST on settlement slavery risks including due diligence and The final swing of the sledgehammer hit GST payments THE CHANGES WILL implementing systems to remedy the incidence on the sale of new residential properties on 1 July. APPLY TO THE SALE (such as developing policies, processes, and staff In response to claims that in the past property OF NEW RESIDENTIAL training that address modern slavery risks) developers have dissolved their company before LOTS, OFF THE PLAN • how the reporting entity assesses the remitting the GST collected from purchases to the DEVELOPMENT, effectiveness of its actions Australian Tax Office (ATO), purchasers (instead of AND THE SALE OF • a description of the consultation processes with vendors) are now required to withhold the GST and HOUSE AND LAND any entities owned or controlled by the reporting then remit this directly to the ATO at the time of PACKAGES INCLUDING entity. settlement. SPEC HOMES Similar legislation passed through the NSW The changes only apply to contracts where a Parliament in June and largely mirrors the federal GST liability would normally exist as part of the proposal with three key differences: property transaction, including: • entities with an annual turnover of $50 million or • new homes which include the land within the contract more must prepare a modern slavery statement • land sales. every financial year Therefore the changes will apply to the sale of new • penalties apply for failing to provide a report, residential lots, off-the-plan development, and the sale failing to make a modern slavery statement public of house and land packages including spec homes. and for providing false and misleading information The changes do not apply to standalone building • the legislation establishes an Anti-Slavery or construction contracts which do not include the Commissioner who is, amongst other things, sale of land. responsible for reporting concerning risks of The changes will apply to all contracts for sale of modern slavery occurring in supply chains. properties that have a GST liability and: HIA is concerned that the proposed measures are • are entered into on or after 1 July 2018 overly complex and burdensome for residential • were entered into before 1 July 2018, where the building businesses. first payment for the supply (other than the deposit) While the measures propose to target those is not made until a time on or after 1 July 2020. larger businesses with the capacity and capability Contracts signed before 1 July 2018 where any payment to address and respond to risks of modern slavery for the supply (other than the deposit) is made before in their supply chains, HIA has highlighted that 1 July 2020 will not be affected by the changes. SEPTEMBER 2018 HOUSING 39 IN FOCUS • INDUSTRIAL RELATIONS