107th Report – Scrutiny by the Committee
of Orders made under the Financial Management and Accountability
The core function of the Standing Committee on Regulations and Ordinances
is to scrutinise legislative instruments to ensure that they do not breach
personal rights or parliamentary propriety. One aspect of parliamentary
propriety is that legislative instruments should not contain matter more
appropriate for parliamentary enactment.
The Committee does not raise this principle often, but when it does it
often highlights fundamental issues of the proper relationship between
the Parliament and the executive and of the appropriate prerogatives of
Parliament. This Report describes Committee scrutiny of the Financial
Management and Accountability Orders 1998 (Amendment), which illustrates
The Report first outlines the criteria which the Committee apply to determine
whether the subject matter of a legislative instrument should be included
in a Bill, where it would face the full rigour of parliamentary passage.
The Report describes how these criteria have been applied in practice.
In one such case the Committee obtained an undertaking to amend the Act
to bring to an end seven years of yearly extensions by regulations of
discrimination based on sex. Some of the other circumstances where the
Committee has raised this matter included the censorship of books, magazines,
films and computer games; disclosure of personal information by Australia
Post to, among others, ASIO and law enforcement agencies; substantial
constitutional change to Australian territories; and the prohibition on
advertising natural remedies as drug free.
The Report next analyses the enabling Financial Management and Accountability
Act 1997, which provides for the management of public money and
public property. The Report notes a number of wide powers under the Act
to make legislative instruments. For instance, it provides for the Minister
to issue Special Instructions, which are not subject to tabling or disallowance,
breach of which is punishable by two years imprisonment, which override
the Act and the regulations. The Report mentions Committee scrutiny of
instruments made under some of these powers.
The great bulk of the Report, however, addresses Committee scrutiny of
the Financial Management and Accountability Orders 1998 (Amendment).
The substantive part of these Orders, which was six lines long, established
Comcover, described as a managed insurance fund, which will insure or
arrange insurance, for all Commonwealth insurable losses except for employers’
liability risks already covered by Comcare. The substantive part of the
Explanatory Statement, which was seven lines long, merely repeated what
was in the Orders. The Committee obtained further information from the
Minister, which advised that Comcover would be a comprehensive disciplined
managed fund, collect premiums, accumulate reserves, meet losses out of
reserves, be modelled on the best managed funds in Australia and overseas,
improve accountability and transparency to the Parliament, deliver a dividend
to the government at least comparable to industry standards and adopt
a business-like approach to the government’s insurance and risk
management arrangements through the provision of services at competitive
In these circumstances the Committee considered that the scheme may have
been more appropriate for parliamentary debate and passage, particularly
since a similar agency, Comcare, was established by detailed statutory
provisions. The Report notes that Committee scrutiny of the Orders took
nine months, over two Parliaments, including extensive correspondence,
a meeting between the Committee and the head of Comcover and a meeting
between the Chairman and the Minister, following which the Minister agreed
to amend the Orders to meet the Committee’s concerns. The Committee
is now able to report to the Senate that the amended arrangements will
not contain matter more appropriate for parliamentary enactment.
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