legal issues


Budget Review 2008-09 Contents

Budget 2008 09: legal issues

Attorney General s Portfolio

Indigenous law programs

Sharon Scully
Law and Bills Digests Section

The Government has announced funding of $17.7 million in 2008 2009 to continue night patrol services in the Indigenous communities identified by the Northern Territory Emergency Response (NTER).[1] This is in addition to the $3.9 million that the Attorney-General s Department has already committed to night patrols services since the 2007 2008 Budget.[2]

It should be noted that prior to the Government s announcement of the NTER on 21 June 2007[3], the Attorney-General s Department had been funding night patrol services for several Indigenous communities and town camps in the Northern Territory since 2004 2005. [4]

The amount allocated to night patrols services in this year s Budget is an increase from the 2007 2008 Budget estimates for the Attorney-General s Department, where approximately $13.3 million was committed to the Department s prevention, diversion, rehabilitation and restorative justice services for Indigenous Australians, of which night patrols were a part.[5]

The NTER involves several government departments and its aims include protecting children from abuse and ensuring the safety of families in remote communities. Night patrol services aim to break the cycle of violence by measures such as:[6]

  • moving a person from a situation of risk to a safe place
  • diffusing situations involving violence, and
  • providing advice, information and referral to other services, such as counselling.

Expenses for the program are provided for 2007 08 and 2008 09 only, with future funding subject to consideration in the 2009 10 Budget (following an evaluation of the Northern Territory Emergency Response).[7]

For further information regarding budget measures relating to the Indigenous community, please refer to Indigenous Affairs by John Gardiner-Garden in the Social Policy section of the Budget Review 2008 09.

Public Order and Safety: Legal Aid

Diane Spooner
Law and Bills Digests Section

Allocation of legal aid payments to the States and Territories falls within payments for specific purposes in National Partnership payments . As part of the Commonwealth s support for public order and safety services, the following existing payments will continue to be paid from 1 January 2009 as part of the National Partnership payments:

$159.4 million in 2008 09, to the States legal aid commissions for the provision of legal assistance in Commonwealth matters.[8]

For the 2008 09 Budget year, New South Wales, Victoria and Queensland are included in the National Partnership payments with the other States and Territories. Prior to this, payments towards legal aid for these three States were classified as Australian Government own-purpose expenses.[9]

Expenses for the overall public order and safety function comprise support for the administration of the federal legal system and the provision of legal services, which includes legal aid to the community. The expenses also include law enforcement and intelligence activities, in addition to the protection of Government property.[10] The total amount allocated for public order and safety increases from $3,788 million in 2007 08 to $3,807 million in 2008 09.[11]

The Government will also provide $11.0 million over three years from 2007 08 to 2009 10 for the Expensive Commonwealth Criminal Cases Fund.[12] This will allow the state-based legal aid commissions to meet trial costs in relation to national security trials running in Victoria and New South Wales, without loss to their usual allocation of funding for their other legal aid functions and services.

As part of the Closing the Gap measures set out in the Budget, the Attorney-General s Department has been allocated $2.0 million in 2008 09 to continue funding for additional legal aid services in support of the Northern Territory Emergency Response. On-going funding needs in this area will be reviewed before the next Budget.[13]

Funding for the Natural Disaster Mitigation Program

Sharon Scully
Law and Bills Digests Section

The Government has announced funding of $19.2 million in 2008 2009 to continue the Natural Disaster Mitigation Program (the NDMP).[14]

Under the previous Government, the NDMP was funded by what had then been the Department of Transport and Regional Services (renamed the Department of Infrastructure, Transport, Regional Development and Local Government).[15]

The NDMP is a national program, which aims to identify and deal with natural disaster risk priorities.[16] Funds are made available, through the NDMP, for projects that mitigate the impact of natural disasters in Australia.[17] These projects encompass pre-disaster and post-disaster management measures and may include:[18]

  • risk management studies
  • disaster mitigation strategies
  • warning systems, and
  • community awareness and readiness measures.

The NDMP is funded by State, Territory and Commonwealth Governments, as well as local agencies and contributors from the private sector, with the Commonwealth Government contributing up to a third of approved costs.[19]

National Capital Authority

Angus Martyn
Law and Bills Digests Section

The Australian Labor Party s desire to make substantial funding cutbacks to the National Capital Authority (NCA) was foreshadowed by Lindsay Tanner in March 2007.[20] Subsequently, the Rudd Government reversed a decision of the Howard Government to provide funding towards the redevelopment of Canberra s Constitutional Avenue as part of the Griffin Legacy .[21] The withdrawal of funding for this project resulted in a forecast saving of $46.5 million over 2007 2011.[22]

In terms of the 2008 09 Budget, the funding received from the Commonwealth for NCA departmental items has fallen to $13.657 million as compared to $18.750 million for 2007 08, a reduction of over 25 per cent.[23]

The Joint Standing Committee on the National Capital and External Territories is currently holding an inquiry into the role of the NCA, with a reporting date of 30 June 2008.[24] The NCA was also the subject of a recent report published by the Australian National Audit Office.[25]

Australian Federal Police and national security

For information regarding budget measures relating to the Australian Federal Police and national security, please refer to the section on security and policing by Nigel Brew, Foreign Affairs, Defence and Security in the Budget Review 2008 09.


Consumer Protection Laws and Corporations Laws

Kali Sanyal
Economics Section

The Commonwealth Government announced in the Budget 2008 09 a new framework for federal financial relations, with a commitment to provide the foundation for far-reaching economic and social reforms to be undertaken as part of the Council of Australian Governments (COAG s) work program.

In March 2008, COAG committed to a comprehensive new economic reform agenda for Australia, with a particular focus on healthcare, water resources, regulatory and competition reform and the broader productivity agenda. The measures are intended to address issues concerning the productive capacity of the economy, sustainability of the natural environment and the social inclusion of disadvantaged people.

Focus of the reform agenda[26]

The entire framework largely focuses on committed working arrangements to improve governance and funding between the federal and state governments. A key decision in this regard was to change the framework in order to modernise payments for specific purposes.

The new framework for federal financial relations will commence on 1 January 2009 (the reform of healthcare funding will commence on 1 July 2009), with all aspects actively monitored by COAG. A new Intergovernmental Agreement will be developed to underpin the new framework and entrench the concept and practice of cooperative working relationships between governments.

A multi-jurisdictional approach to economic and social reform

Reform of Consumer Protection Laws

Currently, Australia hosts a costly and untidy web of state, territory and federal consumer protection laws. In order to streamline the process, the Productivity Commission (the Commission) was commissioned to review Australia's consumer policy framework in December 2006. It published a draft report in December 2007.

Conflicting state and federal consumer protection laws tend to cost the economy up to $4.5 billion each year. Consumer protection laws so far are covered by national laws, yet overlapped by separate and discontinuous state fair trading provisions, leading to uncertainty and unjustified costs to business and unfairness for consumers. The simplified rules for example, product recall laws for unsafe toys and other consumer goods are expected to prove to be a good cooperative arrangement between federal and state agencies.

In its final report, the Commission said on 8 May 2008:

though only very broad quantification is possible, the Commission's reform package could provide a net gain to the community of between $1.5 billion and $4.5 billion a year. [27]

While accepting the recommendations, the government observed that the report provided a unique opportunity to examine Australia's approach to consumer policy and ensure that the legal and regulatory framework provides the best outcomes possible for Australian consumers.[28]

The government will now consider the recommendations and, as agreed by COAG, respond formally at the end of October 2008.

According to a media report, the state and federal ministers had reached a broad in-principle agreement to proceed with changes that have been on the policy agenda for more than a decade, which would represent a significant breakthrough to make consumer protection more efficient.[29]

Reform of Corporations Laws

In the background of the sub-prime crisis in international financial markets, a few Australian companies are exposed to credit risk. In the final week of April this year, Geelong-based Chartwell Enterprises collapsed, allegedly owing 80 investors about $70 million. The demise of Chartwell Enterprises follows the Opes Prime and LIFT Capital collapses. The Minister for Corporate Law, Nick Sherry, acknowledged that these crises, and the volatile international economy, prompted the government to take appropriate reform measures in the federal corporate regulatory regime.[30]

Accordingly, a greater vigilance regime by federal regulators is proposed. The key issue around financial disclosure on covered short selling in the financial markets, and pertinent state and Commonwealth powers on the matter, is now on the agenda of COAG. The general disclosure documentation that individual investors rely on is simply too complicated. As such, work began on simplification of disclosure documentation, particularly around identifying risk. Difficulties with state and territory regulation (such as complexity and overlap regarding financial services), should be regulated nationally.

In its present form, the Corporations Act is deficient in respect to covered short selling in the financial markets.[31] The Australian Security and Investment Commission (ASIC) in some areas of financial services regulation can not act on matters relating to the legislations embedded in state laws. The federal government thus wants to introduce a change in the federal state reform measures for the purpose of seeking the transfer of some state powers on financial services into the Commonwealth jurisdiction. Most of those powers would fall within the remit of ASIC after the transfer of power.

Budget Allocation

Prior to the Budget 2008 09, the government announced such reform measures in consumer protection laws and corporations laws by resolving the differences with the state governments. Consequently, these initiatives have featured into an expanded COAG reform agenda, which the government allocating an amount of $25.2 million over five years.[32]




[1]. The Hon. Jenny Macklin MP (Minister for Families, Housing, Community Services and Indigenous Affairs) and the Hon. Bob Debus MP (Minister for Home Affairs), Making Indigenous Communities Safer , Media Release, 13 May 2008, http://www.ag.gov.au/www/agd/agd.nsf/Page/Publications_Budgets_Budget2008_MediaReleases
_MakingIndigenousCommunitiesSafer, accessed on 14 May 2008.

[2]. Attorney-General s Department,
Portfolio Additional Estimates Statements 2007-08
, Commonwealth of Australia, 2008, p. 32.
http://www.ag.gov.au/www/agd/rwpattach.nsf/
VAP/(084A3429FD57AC0744737F8EA134BACB)~
PAES+07-08_BOOK_FINAL_Feb12_small.pdf/$file/
PAES+07-08_BOOK_FINAL_Feb12_small.pdf
, accessed on 17 May 2008.

[3]. See Department of Families, Housing, Community Services and Indigenous Affairs,
Emergency Response to protect Aboriginal children in the NT, http://www.facsia.gov.au/nter/, accessed on 14 May 2008.

[4]. See Attorney-General s Department,
Night Patrol Services Frequently Asked Questions,
http://www.ag.gov.au/www/agd/rwpattach.nsf/
VAP/(3A6790B96C927794AF1031D9395C5C20)~Night+Patrol+
Services+-+FAQs+-+14+March+2008.DOC/$file/Night+Patrol+Services+-+
FAQs+-+14+March+2008
.DOC, accessed on 14 May 2008.

[5]. Australian Government, Portfolio Budget Statements 2007-08:
Budget related paper No. 1.2, Attorney-General s portfolio, Commonwealth Australia, Canberra, 2007.
http://www.ag.gov.au/www/agd/agd.nsf/AllDocs/
A47E49EA0B93FFE8CA2572D50006682E?OpenDocument, accessed on 15 May 2008.

[6]. Attorney-General s Department, Night Patrol Services Frequently Asked Questions, op. cit.

[7]. Australian Government, Budget Strategy and Outlook 2008-09 , Budget Paper No. 1, Commonwealth of Australia, Canberra, 2008, pp. 6 13.

[8]. Australian Government, Australia s Federal Relations , Budget Paper No. 3, Commonwealth of Australia, Canberra, 2008, p. 52.

[9]. ibid, Table B.8: Estimated payments to support other state services, by year and State, pp. 117, 118 and 121 (footnote (a)).

[10]. Australian Government, Budget Strategy and Outlook 2008-09 , Budget Paper No. 1, op. cit., pp. 6-13.

[11]. ibid, Table 6: Summary of expenses, pp. 6 13.

[12]. Australian Government, Budget Measures 2008-09 , Budget Paper No. 2, Commonwealth of Australia, Canberra, 2008, p. 92.

[13]. ibid., p. 317.

[14]. The Hon. Robert McClelland MP (Attorney-General),
Building More Resilient Communities To Meet The Challenges Of the 21st Century , Media Release, 13 May 2008,
http://www.ag.gov.au/www/agd/agd.nsf/
Page/Publications_Budgets_Budget2008_MediaReleases_BuildingMoreResilient
CommunitiestoMeettheChallangesofthe21stCentury, accessed on 14 May 2008.

[15]. See Attorney-General s Department, Portfolio Additional Estimates Statements 2007 08, Commonwealth of Australia, 2008, pp. 24, 25. See also Department of Infrastructure, Transport, Regional Development and Local Government, Portfolio Additional Estimates Statements 2007 08, http://www.infrastructure.gov.au/department/statements
/2007_2008/paes/part_c.aspx
, accessed on 15 May 2008.

[16]. See Emergency Management Australia, About the Natural Disaster Mitigation Program,
http://www.ema.gov.au/agd/ema/emainternet.nsf/Page/
Communities_Natural_Disasters_NDMP_About_the_NDMP
, accessed on 14 May 2008. Natural disasters include floods, bushfires and cyclones.

[17]. Australian Government, Budget Measures 2008-09 , Budget Paper No. 2, op. cit., p. 94.

[18]. The Hon. Jim Lloyd MP (Minister for Local Government, Territories and Roads), Lessons from the past, lessons for the future, speech given at Annual Conference of the NSW Floodplains Management Authorities, 23 February 2005.

[19]. Emergency Management Australia, About the Natural Disaster Mitigation Program, op. cit.

[20]. Lindsay Tanner MP (Shadow Minister for Finance), Labor s $3 Billion saving plan , Media release, 2 March 2007, http://www.lindsaytanner.com/media/070302_3Billion_Savings.shtm, accessed 16 May 2008.

[21]. The Hon. Lindsay Tanner (Minister for Finance),
Government details initial round of savings measures to assist inflation fight , Media release, 6 February 2008, http://www.financeminister.gov.au/media/2008/mr_062008.html accessed 16 May 2008.

[22]. ibid.

[23]. Australian Government, Portfolio Budget Statements 2008-09:
Budget related paper No. 1.2
, Attorney-General s portfolio, Commonwealth Australia, Canberra, 2008, p. 330,
http://www.ag.gov.au/www/agd/rwpattach.nsf/VAP/
(084A3429FD57AC0744737F8EA134BACB)~20+pbs08-09_NCA_final.pdf/$file/20+pbs08-09_NCA_final.pdf, accessed 16 May 2008.

[24]. ibid., p. 321.

[25]. Australian National Audit Office,
The National Capital Authority s Management of National Assets, Audit Report No.33 2007 08, May 2008, accessed 16 May 2008.

[26]. Australian Government, Part 2: The COAG Reform Agenda , Budget Paper No. 3: Australia s Federal Relations, Commonwealth of Australia, Canberra, 2008, pp. 11 27, http://www.budget.gov.au/2008-09/content/bp3/html/bp3_coag.htm, accessed 14 May 2008.

[27]. Productivity Commission, Review of Australia s Consumer Policy Framework , Productivity Commission Inquiry Report, No. 45, 30 April 2008, http://www.pc.gov.au/inquiry/consumer/docs/finalreport, accessed 14 May 2008.

[28]. C. Bowen (Assistant Treasurer), Review of Australia s Consumer Policy Framework Release of the Productivity Commission Final Report, media release, 8 May 2008,
http://www.treasurer.gov.au/DisplayDocs.aspx?doc=
pressreleases/2008/031.htm&pageID=003&min=ceb&Year=&DocType=0
, accessed 14 May 2008

[29]. D. Crowe & A. Hepworth, National Laws to Protect Consumers, Australian Financial Review, 8 May 2008, p.1, http://parlinfoweb.parl.net/parlinfo/Repository1/Media/npaper_1/A2DQ60.pdf, accessed 14 May 2008

[30]. N. Sherry (Minister for Superannuation and Corporate Law), Interview with Mark Colvin, media release, Radio National, 24 April 2008, http://minscl.treasurer.gov.au/ DisplayDocs.aspx?doc=transcripts/2008/005.htm&page
ID=004&min=njs&Year=&DocType
=, accessed on 16 May 2008.

[31]. In finance, short selling or shorting is the practice of selling securities the seller does not then own, in the hope of repurchasing them later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor goes long , purchasing a security in the hope the price will rise. The covered short selling has thus been a practice of financial transactions between two independent entities, apparently to hide the transactions from the disclosure regime.

[32]. D. Kitney, Rudd makes all the right noises , Australian Financial Review, 14 May 2008, p. 72, http://parlinfoweb.parl.net/parlinfo//Repository1/Media/npaper_2/C3FQ60.pdf, accessed on 14 May 2008.

 

 


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