Drafting Direction No. 1.6
Asterisking to identify defined terms
Document release 1.0
Issued May 2006

Contents
Part 1—Introduction—the issues	2
Part 2—When to use asterisks	2
New legislation	2
The size of the draft	2
The extent to which the Act will rely on defined terms	2
Existing legislation (other than the Tax Code)	2
The Tax Code	3
Part 3—How to use asterisks	3
Which occurrences of defined terms should be asterisked?	3
The basic rule: when to use an asterisk	3
The basic rule: when not to use an asterisk	4
Defined terms that are not asterisked	4
Specific issues to do with using asterisks	4
Relational definitions	4
Composite defined terms	5
Extended definitions	5
Narrative style	5
Alternative occurrences in the same provision	5
“Labels” are generally not asterisked	6
Asterisking different grammatical forms	6
The features of an Act that support the asterisking system	7
Provisions giving effect to the asterisking system	7
The footer	8
Single location for definitions	8

Part 1—Introduction—the issues
1	There are 2 broad issues:
·	when to use asterisks:
— in new legislation;
— in existing legislation (other than the Tax Code);
— in the Tax Code;
·	how to use asterisks:
— which occurrences of defined terms should be asterisked;
— the features of an Act that support the asterisking system.
Part 2—When to use asterisks
New legislation
2	When drafting a Bill for a new principal Act (that will not form part of the Tax Code), the drafter should use his or her discretion whether to asterisk defined terms. In deciding whether to use asterisks, the drafter should consider the size of the draft and the extent to which the Act will rely on defined terms.
The size of the draft
3	Asterisking is an attempt to address the difficulty of locating definitions and knowing which terms or expressions are defined. That difficulty is likely to be greater in larger Bills, so a very small Bill is less likely to benefit significantly from asterisks. To date, asterisking of Acts outside the Tax Code has been confined to fairly large Acts. However, within the Tax Code, some medium-sized and smaller Acts have also been asterisked (eg. the Wine Equalisation Tax Act, the ABN Act and the Luxury Car Tax Act).
4	Drafters should consider asterisking for a new Bill that is likely to become large because of later amendments: it is far easier to begin with asterisks than to amend the Act later to include them.
The extent to which the Act will rely on defined terms
5	The more heavily an Act relies on defined terms, the more likely it is that it would benefit from using asterisks. Conversely, if an Act does not rely much on defined terms, it would be harder to justify including the features that need to be in place to cater for the minimal use of asterisks.
Existing legislation (other than the Tax Code)
6	When drafting a Bill to amend an existing Act, drafters should follow the asterisking practice in the Act being amended. This means that drafters should:
·	use asterisks in inserted text if the principal Act uses them;
·	not use asterisks in inserted text if the principal Act does not use them;
·	if the principal Act uses asterisks and a new definition is inserted, amend existing occurrences of the newly defined term, which may previously have been relying on ordinary and natural meaning, to include asterisks and make any other appropriate amendments (not all of the existing occurrences will need to be amended, see the rules below). Asterisking amendments may be done using a table format as set out in Word Note 4.
The Tax Code
7	All Acts forming part of the Tax Code use asterisks, apart from some very short Acts. Drafting Direction 1.8 provides more details, and includes a list of the Acts that make up the Tax Code.
Part 3—How to use asterisks
8	There are 2 aspects to this:
·	which occurrences of defined terms should be asterisked;
·	the features of an Act that are needed to support asterisking.
Which occurrences of defined terms should be asterisked?
The basic rule: when to use an asterisk
9	An asterisk should be put in front of the first occurrence of each defined term in each:
·	subsection (or section not divided into subsections);
·	definition (including a definition in a subsection that is not part of the general definitions section or Dictionary);
·	row of a table (that has substantive effect, rather than being just explanatory)—note that this departs from the previous Tax Code practice of asterisking the first occurrence in each cell of a table;
·	step in a method statement;
·	clause (however referred to) in a non-amending Schedule.
10	A defined term should be asterisked in a formula unless the definition is in the subsection containing the formula or the next subsection. Each occurrence of the term in the formula should be asterisked (even if the term is also asterisked in the text introducing the formula).
11	You can just type a normal asterisk, which uses a larger font size, as the ‘Fix document’ and ‘Finalise’ macros will replace them with the correct asterisks. In formulas, you should use the special button provided in Mathtype.
The basic rule: when not to use an asterisk
12	Asterisks are not used in:
·	non-operative material;
·	headings (including headings quoted in parentheses in an operative provision);
·	notes or examples;
·	tables that are only explanatory (eg. for signposting purposes);
·	Guides and outline provisions;
·	diagrams (unless they have substantive effect);
·	the definition of the term concerned (eg. disposal, not *disposal).
Defined terms that are not asterisked
13	Some defined terms occur so frequently in an Act that it would be unhelpful and distracting to asterisk them. These terms are specified in a table at the front of the Act. For example, subsection 3(5) of the Child Care Payments Act 1997 provides:
The following basic terms used throughout the Act are not identified with an asterisk:

Terms that are not identified	
Item	This term	is defined in section	
1	AAT	5	
2	child care assistance	5	
3	child care rebate	5	
4	child care service	5	
5	partner	5	
6	Secretary	5	
7	SSAT	5	
14	However, the number of defined terms that are not asterisked should be kept to a minimum. Having too many of them tends to attract criticism and compromise the integrity of the asterisking system.
Specific issues to do with using asterisks
15	Paragraphs 16 to 31 deal with some specific issues, and things drafters should know, in using asterisks.
Relational definitions
16	Terms may be defined in relation to specific things or circumstances (eg design of a uniform has the meaning given by....).
17	Drafters should try to avoid defining a term in a relational way in one part of an Act where the term takes its ordinary meaning in another part of the Act. 
18	If a term is defined in a relational way, the term should only be asterisked in the Act when the term is used in a context that attracts the defined meaning. When the term is only used in its ordinary (undefined) meaning, it should not be asterisked. 
19	However, care is needed in deciding when the context attracts the defined meaning. Often the context attracts the defined meaning in some, but not all, conceivable situations. In that case, the term should be asterisked.
Composite defined terms
20	If a defined term (eg. business travel expense) includes another defined term (eg. travel expense), only the composite defined term is asterisked. In that example: *business travel expense, not *business *travel expense.
Extended definitions
21	If a term is defined using a number of provisions (such as a section with several subsections or an entire Subdivision), occurrences of the defined term within that extended definition are not asterisked. It would be unhelpful to asterisk them because the asterisk would only refer the reader back to the definition itself. For example, s.11-15 of the GST Act provides: 
	(1)	You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise.
	(2)	However, you do not acquire the thing for a creditable purpose to the extent that:
		etc.
Narrative style
22	The normal asterisking rules apply even where the narrative style is used across several provisions. For example:
	(1)	The Commissioner must cancel the registration of a *resident agent if the Commissioner is satisfied that ...
	(2)	The Commissioner must notify the *resident agent of the cancellation.
23	Both references are asterisked, even though the reference in the second subsection clearly links to the reference in the first subsection.
Alternative occurrences in the same provision
24	The former Tax Code practice of asterisking alternative occurrences of a defined term in the same subsection etc. no longer applies. For example, subsection 28-12(1) of the Income Tax Assessment Act 1997 would now read:
	(1)	If you owned or leased a *car or hired a car under a hire purchase agreement...
		instead of:
	(1)	If you owned or leased a *car or hired a *car under a hire purchase agreement...
 “Labels” are generally not asterisked
25	Asterisks should not generally be used to identify “labels” for concepts, even if the labelled concept is used in another section. Labels are simply short tags to save repetition of text rather than definitions that clearly establish concepts. Similarly, the Dictionary/definitions section should generally not be cluttered with signposts to labels for concepts. If a label is generic, it may also be useful to use the label again in an obviously different context for a different concept. 
26	If a signpost is needed to help the reader find the provision creating the label, you can include a reference to that provision where the label is used, or a note (although it shouldn’t be necessary to do this where the label is used in the same section that creates it). For example:
392-35  Stage 1—working out your basic amount
		Work out the amount (the basic amount) of tax that would be payable on your *basic taxable income ...
392-75  Working out the kind of adjustment
		Compare your basic amount worked out under section 392-35 with your notional amount ...
27	There may be circumstances in which it is useful to asterisk labels where they are used (eg. in the company tax losses provisions in Division 165 of the Income Tax Assessment Act 1997, labels are used in provisions that are a considerable distance from the provisions where the labels are created, and some labels are used in different places to tag different concepts).
28	Labels should be used sparingly and should not be used to avoid asterisking a term.
Asterisking different grammatical forms
29	Different grammatical forms of a defined term have a corresponding meaning to the defined term (section 18A of the Acts Interpretation Act 1901), and should be asterisked accordingly. For example, if the term “manufacture” is defined in an Act that uses asterisks, occurrences of the term “manufacturer” in that Act should be asterisked.
30	In the Income Tax Assessment Act 1997, the Dictionary includes some signpost definitions such as this:
		held: see hold.
31	This is unnecessary because of section 18A of the Acts Interpretation Act 1901, but is included in the Income Tax Assessment Act 1997 to promote the aim of helping the reader to match the definition with occurrences of the defined term. It is not a requirement of the asterisking system, and it should not be used solely for the purpose of supporting the asterisking system.
The features of an Act that support the asterisking system
Provisions giving effect to the asterisking system
32	An Act that uses asterisking should include provisions that do the following:
·	state that asterisks are used in the Act;
·	very briefly state the basic rules for asterisking;
·	state that the fact that a defined term is not asterisked is not relevant to interpreting the term;
·	include a table of the defined terms that are not asterisked.
33	The following precedent should be used, and should be included in Part 1 of the Act. The precedent should not be altered without good reason—a drafter who wishes to alter this precedent because it is unsatisfactory in some way must bring the problem to First Parliamentary Counsel’s attention, so that if necessary the precedent can be improved.
#  Identifying defined terms
	(1)	Many of the terms in this Act are defined in section 5.
	(2)	Most of the terms that are defined in [section ?/the Dictionary in Part?] are identified by an asterisk appearing at the start of the term: as in “*[insert a defined term used in the Act]”. The footnote with the asterisk contains a signpost to [section ?/the Dictionary].
	(3)	An asterisk usually identifies the first occurrence of a term in a section (if not divided into subsections), subsection or definition. Later occurrences of the term in the same provision are not usually asterisked.
	(4)	Terms are not asterisked in headings, notes, examples, explanatory tables, guides, outline provisions or diagrams. 
	(5)	If a term is not identified by an asterisk, disregard that fact in deciding whether or not to apply to that term a definition or other interpretation provision.
	(6)	The following basic terms used throughout the Act are not identified with an asterisk:

Terms that are not identified	
Item	This term	is defined in section	
1			
2 			
3 etc.			
34	It may be appropriate to include a provision like subsection (5) in the Acts Interpretation Act 1901 at a later stage, but until then it needs to be included in each Act using asterisks.
35	Acts forming part of the Tax Code include these provisions in a different form, largely because of their connection to the sections on non-operative material: see Subdivision 2-C and subsection 950-100(2) of the Income Tax Assessment Act 1997.
The footer
36	An Act that uses asterisks should include a footer on each page of the Act (but not the cover page or the Table of Contents). The footer should be along the following lines:
*To find definitions of asterisked terms, see the Dictionary, starting at section 995-1 (from the Income Tax Assessment Act 1997); or
*To find definitions of asterisked terms, see section 5 (from the Child Care Payments Act 1997).
37	The footer should generally fit on one line. This may not be possible in some cases, such as where the Act containing asterisks relies on definitions in the parent Act. For example, the Aged Care (Consequential Provisions) Act 1997 includes this footer:
*To find definitions of asterisked terms, see the Dictionary in Schedule 1 to the Aged Care Act 1997.
38	The IT staff provide technical support for inserting the footer.
Single location for definitions
39	The asterisking footer relies on there being one location in the Act where all the defined terms are located (either the definitions themselves or signposts to the definitions). It will not work, and must not be used, if Chapters, Parts etc of the Act have their own dedicated definition sections, unless the definitions are at least signposted in the Dictionary/main definition section. Any “just in time” definitions must also be signposted in the Dictionary/definition section.
40	The definitions do not have to be in a Dictionary at the back of the Act. For example, the Child Care Payments Act 1997 has a definition section near the front of the Act.

41	If a defined term is defined differently in different contexts, it is important to ensure that all the different meanings given to the term are brought together in the Dictionary/main definition section. For example:
cost:
	(a)	cost of a *depreciating asset has the meaning given by Subdivision 40-C; and
	(b)	cost of an item of *trading stock, in the case of an animal that you acquired by natural increase, has the meaning given by section 70-55.

Peter Quiggin
First Parliamentary Counsel
1 May 2006

Document History	
Release	Release date	Document number	
1.0	1 May 2006	s06rd374.v01.doc	
Note:	Before the issue of the current series of Drafting Directions, this Drafting Direction was known as Drafting Direction No. 6 of 2000.