Scrutiny of Bills Seventh Report of 1998
SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS
24 June 1998
ISSN 0729-6258
MEMBERS OF THE COMMITTEE
Senator B Cooney (Chairman)
Senator W Crane (Deputy Chairman)
Senator J Ferris
Senator S Macdonald
Senator A Murray
Senator J Quirke
TERMS OF REFERENCE
Extract from Standing Order 24
(1)
(a) At the commencement of each Parliament, a Standing Committee for
the Scrutiny of Bills shall be appointed to report, in respect of the
clauses of bills introduced into the Senate, and in respect of Acts of
the Parliament, whether such bills or Acts, by express words or otherwise:
(i) trespass unduly on personal rights and liberties;
(ii) make rights, liberties or obligations unduly dependent upon insufficiently
defined administrative powers;
(iii) make rights, liberties or obligations unduly dependent upon non-reviewable
decisions;
(iv) inappropriately delegate legislative powers; or
(v) insufficiently subject the exercise of legislative power to parliamentary
scrutiny.
(b) The Committee, for the purpose of reporting upon the clauses of a
bill when the bill has been introduced into the Senate, may consider any
proposed law or other document or information available to it, notwithstanding
that such proposed law, document or information has not been presented
to the Senate.
SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS
SEVENTH REPORT OF 1998
The Committee presents its Seventh Report of 1998 to the Senate.
The Committee draws the attention of the Senate to clauses of the following
bills which contain provisions that the Committee considers may fall within
principles 1(a)(i) to 1(a)(v) of Standing Order 24:
Australian Radiation Protection and Nuclear Safety Bill 1998
Australian Radiation Protection and Nuclear Safety Bill (License
Charges) Bill 1998
Comprehensive Nuclear Test-Ban Treaty Bill 1998
Datacasting Charge (Imposition) Bill 1998
Electoral and Referendum Amendment Bill (No. 2) 1998
Payment Systems and Netting Bill 1998
Taxation Laws Amendment (Company Law Review) Bill 1998
Australian Radiation Protection and Nuclear Safety Bill 1998
This bill was introduced into the House of Representatives on 8 April
1998 by the Parliamentary Secretary to the Minister for Health and Family
Services. [Portfolio responsibility: Health and Family Services]
The bill proposes to establish a scheme to regulate the operation of
nuclear installations and the management of radiation sources, including
ionising material and apparatus and non-ionising apparatus, where these
activities are undertaken by the Commonwealth, Commonwealth entities and
those who deal with such entities.
The Committee dealt with this bill in Alert Digest No. 6 of 1998, in
which it made various comments. The Parliamentary Secretary to the Minister
for Health and Family Services has responded to those comments in a letter
dated 23 June 1998. A copy of that letter is attached to this report,
and relevant parts of the response are discussed below.
Abrogation of the privilege against self-incrimination
Subclause 55(2)
In Alert Digest No. 6 of 1998, the Committee noted that subclause 55(1)(e)
of the bill authorises an inspector to require any person on particular
premises to answer any questions put by the inspector and produce any
documents requested by the inspector.
Subclause 55(2) makes compliance an absolute requirement. No provision
is made for non-compliance where a person has a reasonable excuse. As
a consequence, subclause 55(2) removes the privilege against self-incrimination
and does not contain the safeguards often included in such provisions
(see, for example, Agricultural and Veterinary Chemicals Code 1994,
s 146; Child Support Assessment Act 1989, s 161(4); Australian
Wine and Brandy Corporation Act 1980, s 39ZH(3); Ozone Protection
Act 1989, s 64(2)).
Accordingly, the Committee sought the advice of the Minister on the reasons
why the requirement in subclause 55(2) makes no provision for possible
non-compliance where a person has a reasonable excuse, which would include
the likelihood that the information required was likely to incriminate
that person.
Pending the Minister's advice, the Committee drew Senators' attention
to this provision, as it may be considered to trespass unduly on personal
rights and liberties, in breach of principle 1(a)(i) of the Committee's
terms of reference.
The Parliamentary Secretary to the Minister has responded as follows:
The Committee sought advice in respect of subclause 55(2) of the Bill
which creates an offence for, amongst other things, refusing or failing
to answer any questions put by an inspector (proposed subparagraph 55(1)(e)(i)).
The Committee has stated that subclause 55(2) removes the privilege against
self-incrimination and does not contain the safeguards often included
in similar provisions.
Criminal Code – privilege against self incrimination
Following discussions with the Attorney-General's Department, the Department
of Health and Family Services advices that it is highly likely that sub-clause
55(2) does not abrogate the privilege against self-incrimination. Under
clause 10 of the Bill, Chapter 2 of the Criminal Code will apply to the
offences in the Bill. It is considered that the Code will not alter the
application of the privilege against self-incrimination at common law
to Commonwealth offences. That is, the privilege will continue to apply
in relation to a Commonwealth law requiring the answering of questions
unless the law expressly or by necessary implication indicates a contrary
intention: Sorby v The Commonwealth (1983) 152 CLR 281 at 309.
Further details regarding this matter are at attachment A.
The Committee thanks the Parliamentary Secretary for this response, which
addresses some of its concerns. The Committee notes the advice of the
Attorney-General's Department that the offences under the Bill are subject
to Chapter 2 of the Criminal Code, and that, therefore, “it is highly
likely that sub-clause 55(2) does not abrogate the privilege against self-incrimination”.
While persuasive, this advice is not definitive.
From the advice, it appears that it is intended that the privilege against
self-incrimination should continue to apply to an offence under clause
55. If so, there would seem to be no difficulty in expressly providing
for it. Such an approach would remove any uncertainty. Accordingly, the
Committee seeks the Minister's advice on whether there is any difficulty
in expressly providing that the privilege against self-incrimination continues
to apply to an offence against clause 55.
Pending the advice of the Minister, the Committee continues to draw Senators'
attention to the provision as it may be considered to trespass unduly
on personal rights and liberties, in breach of principle 1(a)(i) of the
Committee's terms of reference.
Australian Radiation Protection and Nuclear Safety (Licence Charges)
Bill 1998
This bill was introduced into the House of Representatives on 8 April
1998 by the Parliamentary Secretary to the Minister for Health and Family
Services. [Portfolio responsibility: Health and Family Services]
The bill proposes to enable annual fees and application fees to be payable
by entities regulated under the Australian Radiation Protection and Nuclear
Safety Bill 1998.
The Committee dealt with this bill in Alert Digest No. 6 of 1998, in
which it made various comments. The Parliamentary Secretary to the Minister
for Health and Family Services has responded to those comments in a letter
dated 23 June 1998. A copy of that letter is attached to this report,
and relevant parts of the response are discussed below.
Imposing a levy by regulation
Subclauses 4(2) and 5(2)
In Alert Digest No. 6 of 1998, the Committee noted that subclause 4(2)
of the bill requires the holder of a “facility licence” to pay
an annual charge. Subclause 5(2) imposes a similar requirement on the
holder of a “source licence”. In each case, the amount of the
charge is set by regulation.
At page 62 of its report on The Work of the Committee during the 37th
Parliament (May 1993-March 1996), the Committee restated its concerns
in this area in the following terms:
[T]he Committee has consistently drawn attention to legislation which
provides for the level of a `levy' to be set by regulation. This creates
a risk that the levy may in fact become a tax. It is for Parliament to
set a tax rate and not for the makers of subordinate legislation to do
so. Where the level of a levy needs to be changed frequently and expeditiously
the question arises as to whether this can best be done by regulation
rather than by statute. If a compelling case can be made out for the level
to be set by subordinate legislation the Committee seeks to have the enabling
Act prescribe a maximum figure above which the relevant regulations cannot
fix the levy or alternatively a formula by which such an amount can be
calculated.
Many bills adopt such an approach, providing for a basic levy to be set
by regulation, subject to a statutory maximum rate. Examples of such bills
considered by the Committee recently include the Laying Chicken Levy Amendment
(AAHC) Bill 1996 and the Live-stock Export Charge Amendment (AAHC) Bill
1996 (both considered in Alert Digest No 5 of 1996), and the Retirement
Savings Accounts Supervisory Levy Bill 1996 and the Telecommunications
(Carrier Licence Charges) Bill 1996 (both considered in Alert Digest
No 1 of 1997).
The Explanatory Memorandum to this Bill makes no reference to the appropriateness
of such an approach, and the Minister's Second Reading Speech simply notes
that the Commonwealth intends employing an independent consultant to advise
on appropriate cost recovery processes and fees and charges. Accordingly,
the Committee sought the advice of the Minister on why the legislation
places no upper limit on the power to set a rate of levy by regulation.
Pending the Minister's advice, the Committee drew Senators' attention
to this provision, as it may be considered to inappropriately delegate
legislative power in breach of principle 1(a)(iv) of the Committee's terms
of reference.
The Parliamentary Secretary to the Minister has responded as follows:
When drafting the Bill the Government gave considerable attention to
the issue of annual charges. As reflected in the Second Reading Speech,
the charges:
. will only apply to Commonwealth entities rather that private individuals,
businesses or corporations; and
. the charges will equate only to the amount necessary to recover the
cost of the additional functions described in the Bill.
This is in line with the Government's decisions concerning the establishment
of the Australian Radiation Protection and Nuclear Safety Agency. The
Government was specific in its intention that this Agency recover the
costs associated with its regulatory function from the Commonwealth entities
it will regulate. The level of fees and charges is, therefore, directly
tied to the cost of licencing, monitoring and enforcing compliance with
provisions of the ARPANS Bill.
Before any upper limit can be set for these fees and charges, it is,
therefore, necessary to undertake a comprehensive assessment of the additional
functions that result from the legislation and to approximate the number
of facility and source licenses that will be held by various Commonwealth
entities.
Extensive consultation with the approximately 20 Commonwealth agencies
to be licenced under the ARPANS Bill has been on-going, since the Government
decision to establish the Agency. A major focus of the consultation has
been to ascertain details necessary to establish an appropriate regulatory
regime.
Now that the details of the regulatory regime have been determined (as
reflected in the ARPANS Bill), the Commonwealth has employed the independent
consultancy firm, Ernst and Young, to establish a fees and charges regime,
against the regulatory framework. All Commonwealth entities to be levied
under this Bill will continue to be closely consulted during the course
of that project and during subsequent determination of appropriate charges.
To enable this process to be completed, annual charges and licence fees
will not be introduced in the short term. Until such time as cost recovery
processes are in place, the Health and Family Services portfolio will
bear the additional cost of regulating radiation and nuclear safety activities.
I believe that any move to set an upper limit at this time would be arbitrary
and contrary to the consultative approach undertaken to date. I note that
while the upper limit cannot be written in the Bill at this time, the
entire cost recovery regime will be the subject of Parliamentary scrutiny
through the Regulation making process. Should there still, despite this,
continue to be concern about the inclusion of the upper limit in the substantive
legislation, it would be possible for the Licence Charges Act to be amended
to reflect the outcome of the current independent consultancy process.
If the Committee has any further queries I would be pleased to arrange
verbal briefings.
The Committee thanks the Parliamentary Secretary for this response.
Comprehensive Nuclear Test-Ban Treaty Bill 1998
This bill was introduced into the House of Representatives on 8 April
1998 by the Minister for Foreign Affairs. [Portfolio responsibility: Foreign
Affairs]
The bill proposes to effect Australia's obligations as a party to the
Comprehensive Nuclear Test-Ban Treaty.
The Committee dealt with this bill in Alert Digest No. 6 of 1998, in
which it made various comments. The Minister for Foreign Affairs has responded
to those comments in a letter dated 4 June 1998. A copy of that letter
is attached to this report, and relevant parts of the response are discussed
below.
Delegation without limitation
Clause 69
In Alert Digest No. 6 of 1998, the Committee noted that clause 69 of
the bill permits the Minister to delegate all or any of his or her powers
under the Act. No limitations are imposed as to the qualifications or
attributes of any potential delegate.
Generally, the Committee prefers to see limits set, either on the sorts
of powers that can be delegated or the categories of people to whom they
may be delegated. In the latter case, the Committee has expressed a preference
that powers be delegated only to the holders of nominated offices, or
to members of the Senior Executive Service, or to persons holding specified
qualifications. Accordingly, the Committee sought the advice of the Minister
on why the bill authorises this unfettered delegation.
Pending the Minister's advice, the Committee drew Senators' attention
to this provision, as it may be considered to make rights, liberties or
obligations unduly dependent upon insufficiently defined administrative
powers in breach of principle 1(a)(ii) of the Committee's terms of reference.
The Minister has responded as follows:
As drafted, Clause 69 permitted the relevant Minister to delegate all
or any of his or her powers under Act. No limitations were imposed as
to the qualifications or attributes of any potential delegate. Scrutiny
of Bills Alert Digest No. 6 of 1998 stated that, generally, the Committee
preferred to see limits set either on the sorts of powers that can be
delegated or the categories of people to whom they may be delegated. In
the latter case, the Committee expressed the preference that powers be
delegated only to the holders of nominated offices, to members of the
Senior Executive Service or to persons holding specified qualifications.
To accommodate the Committee's preference, I have since moved an amendment
to clause 69 of the Bill which confines the power of the Minister to delegate
authority under the Act to a limited class of persons including the Secretary
of the Department of Foreign Affairs and Trade, the Director of the Australian
Comprehensive Test Ban Office and members of the Senior Executive Service
of the Department of Foreign Affairs and Trade. The amendment was moved
on 2 June 1998 and is recorded at page 4169 of Hansard.
The Committee thanks the Minister for this response and for the amendment.
Datacasting Charge (Imposition) Bill 1998
This bill was introduced into the House of Representatives on 8 April
1998 by the Minister representing the Minister for Communications, the
Information Economy and the Arts. [Portfolio responsibility: Communications,
the Information Economy and the Arts]
The bill proposes to provide for the imposition of a charge in relation
to the provision of datacasting services by commercial and national free-to-air
television broadcasters.
The Committee dealt with this bill in Alert Digest No. 6 of 1998, in
which it made various comments. The Minister for Communications, the Information
Economy and the Arts has responded to those comments in a letter dated
23 June 1998. A copy of that letter is attached to this report, and relevant
parts of the response are discussed below.
Imposing a levy by regulation
Clause 7
In Alert Digest No. 6 of 1998, the Committee noted that clause 7 states
that the amount of the charge to be imposed by the bill is to be set through
delegated legislation – specifically, in accordance with a written
determination of the Australian Communications Authority. Further, the
bill does not specify an upper limit on this charge.
At page 62 of its report on The Work of the Committee during the 37th
Parliament (May 1993-March 1996), the Committee restated its concerns
in this area in the following terms:
[T]he Committee has consistently drawn attention to legislation which
provides for the level of a `levy' to be set by regulation. This creates
a risk that the levy may in fact become a tax. It is for Parliament to
set a tax rate and not for the makers of subordinate legislation to do
so. Where the level of a levy needs to be changed frequently and expeditiously
the question arises as to whether this can best be done by regulation
rather than by statute. If a compelling case can be made out for the level
to be set by subordinate legislation the Committee seeks to have the enabling
Act prescribe a maximum figure above which the relevant regulations cannot
fix the levy or alternatively a formula by which such an amount can be
calculated.
Many bills adopt such an approach, providing for a basic levy to be set
by regulation, subject to a statutory maximum rate. Examples of such bills
considered by the Committee recently include the Laying Chicken Levy Amendment
(AAHC) Bill 1996 and the Live-stock Export Charge Amendment (AAHC) Bill
1996 (both considered in Alert Digest No 5 of 1996), and the Retirement
Savings Accounts Supervisory Levy Bill 1996 and the Telecommunications
(Carrier Licence Charges) Bill 1996 (both considered in Alert Digest
No 1 of 1997).
The Explanatory Memorandum to the Bill and accompanying Second Reading
Speech indicate that the government's intention is to impose a charge
on broadcasters who provide datacasting services, and to set this charge
at a level which will be “competitively neutral”.
Complementary amendments proposed in the Television Broadcasting Services
(Digital Conversion) Bill 1998 indicate that the Australian Communications
Authority cannot specify an initial level of charge without first reporting
to the Minister, who will be obliged to table that report in the Parliament.
However no reference is made to the appropriateness or desirability of
imposing an upper limit on such a charge in the Bill. Accordingly, the
Committee sought the advice of the Minister on why the legislation places
no upper limit on the power to set a rate of levy by regulation.
Pending the Minister's advice, the Committee drew Senators' attention
to this provision, as it may be considered to inappropriately delegate
legislative power in breach of principle 1(a)(iv) of the committee's terms
of reference.
The Minister has responded as follows:
Specifically, the Committee has sought my advice on why the legislation
places no upper limit on the power to set a rate of levy by regulation.
The Datacasting Charge Bill provides for a charge to be imposed on commercial
and national (ABC and SBS) broadcasters who provide datacasting services
using residual capacity in their digital terrestrial television broadcasting
(DTTB) channels. This charge is imposed on a transmitter licence, and
the amount is to be determined by the Australian Communications Authority
(ACA) by written instrument.
The Government's policy is that the quantum of the datacasting charge
imposed on FTA broadcasters (“FTAs”) who use residual capacity
for datacasting, should be set such that there is competitive neutrality
with other providers of datacasting services using the broadcasting services
bands (“non-FTAs”).
The Television Broadcasting (Digital Conversion) Bill provides for additional
channels to be allocated to FTAs free of up-front and ongoing charge for
the conversion to DTTB. On the other hand, non-FTAs will be required to
bid in the market place for datacasting channels. If the charge for residual
datacasting by the FTAs does not reflect the competitive price paid for
other datacasting spectrum, the FTAs could have an unfair competitive
advantage over non-FTAs in the provision of datacasting services.
The Government's policy is therefore aimed at FTAs paying a charge which
reflects the `value' of the spectrum as measured by the price paid by
non-FTAs.
Additional spectrum will only be allocated for datacasting purposes under
a price-based allocation system when spectrum not required for digital
conversion of free to air television broadcasters or potential new free
to air entrants has been identified by the Australian Broadcasting Authority
and made available for price-based allocation by the ACA under the Radiocommunications
Act 1992; and the regulatory arrangements for the allocation of this
datacasting spectrum have been determined.
It is not possible at this stage to speculate on the likely value that
bidders will place on the spectrum that is made available. In any case,
the value is likely to vary considerably between licence areas, and even
within licence areas (for example, datacasting spectrum would probably
realise much higher prices in Sydney than in a regional NSW licence area).
The different levels of prices paid by non-FTAs would be reflected in
the residual datacasting charges imposed on FTAs in each licence area.
Determining the residual datacasting charge in the Datacasting Charge
Bill would therefore not enable a charge to be set which adequately reflects
the price paid by non-FTAs for datacasting spectrum. Given the ACA's responsibilities
for setting other charges relating to the use of the radiofrequency spectrum,
it will be best placed to determine the appropriate datacasting charge
to be imposed. The Digital Conversion Bill also requires the ACA to provide
a report to the Minister on the extent to which the proposed residual
datacasting charge meets competitive neutrality principles.
It would neither be desirable nor practicable to set an upper limit on
the residual datacasting charge, which is intended to reflect the results
of the price-based allocation process under the Radiocommunications Act
that is not subject to any upper limit. Any attempt to set an upper limit
could underestimate the price that may be paid by successful bidders for
datacasting spectrum. On the other hand, an unrealistically high upper
limit in terms of the price ultimately paid by successful bidders for
datacasting would not impose any practical constraint on the charge determined
by the ACA.
The ACA's determination of the residual datacasting charge will be a
disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901, and will therefore be subject to Parliamentary
scrutiny and disallowance. The ACA's report to the Minister on the proposed
datacasting charge will also be required to be tabled in both Houses of
Parliament.
I hope that the foregoing has addressed the issues raised by the Committee.
The Committee thanks the Minister for this comprehensive response.
Electoral and Referendum Amendment Bill (No. 2) 1998
This bill was introduced into the Senate on 14 May 1998 by the Parliamentary
Secretary to the Treasurer. [Portfolio responsibility: Finance and Administration]
The bill proposes to amend the Commonwealth Electoral Act 1918
and Referendum (Machinery Provisions) Act 1984 to:
- require new electors to produce one original form of identification
at time of enrolment;
- provide that a person witnessing an enrolment application must be
an elector in a prescribed class of persons;
- provide that all electors must notify the Australian Electoral Commission
of a change of address within one month of moving;
- allow for the provision of date of birth and salutation details of
electors to Members, Senators and registered political parties;
- provide that any person sentenced to imprisonment is not entitled
to enrol or to vote;
- provide that only the Presiding Officer at a polling place may assist
electors in marking their ballot papers;
- provide that the preliminary scrutiny of declaration votes may commence
on the Monday prior to polling day;
- raise from $500 to $1,500 the threshold for counting individual amounts
received in regard to donations to political parties;
- provide that political parties are required to disclose a total amount
of $5,000 or more (currently $1,500) received from a person or organisation
during a financial year; and
- increase from $1,500 to $10,000 the amount above which a donor to
a registered political party must furnish a return for a financial year.
The Committee dealt with this bill in Alert Digest No. 7 of 1998, in
which it made various comments. The Special Minister of State has responded
to those comments in a letter dated 11 June 1998. A copy of that letter
is attached to this report, and relevant parts of the response are discussed
below.
Commencement
Subclause 2(3)
In Alert Digest No. 7 of 1998, the Committee noted that, under subclause
2(3) of the bill, many of the items in Schedule 1 are to commence on Proclamation.
No provision is made for automatic commencement or repeal at a particular
time.
With respect to commencement provisions, the Committee places much importance
on Drafting Instruction No 2 of 1989, prepared by the Office of Parliamentary
Counsel. This Drafting Instruction provides, in part:
3. As a general rule, a restriction should be placed on the time within
which an Act should be proclaimed (for simplicity I refer only to an Act,
but this includes a provision or provisions of an Act). The commencement
clause should fix either a period, or a date, after Royal Assent, (I call
the end of this period, or this date, as the case may be, the 'fixed time').
This is to be accompanied by either:
(a) a provision that the Act commences at the fixed time if it has not
already commenced by Proclamation: or
(b) a provision that the Act shall be taken to be repealed at the fixed
time if the Proclamation has not been made by that time.
4. Preferably, if a period after Royal Assent is chosen, it should
not be longer than 6 months. If it is longer, Departments should explain
the reason for this in the Explanatory Memorandum. On the other hand,
if the date option is chosen, [the Department of the Prime Minister
and Cabinet] do not wish at this stage to restrict the discretion of the
instructing Department to choose the date.
5. It is to be noted that if the 'repeal' option is followed, there is
no limit on the time from Royal Assent to commencement, as long as the
Proclamation is made by the fixed time.
6. Clauses providing for commencement by Proclamation, but without the
restrictions mentioned above, should be used only in unusual circumstances,
where the commencement depends on an event whose timing is uncertain (eg
enactment of complementary State legislation).
The Committee noted that paragraph 6 of the Drafting Instruction suggested
that clauses providing for commencement by Proclamation, with no other
restrictions as to time of commencement, should be used only in unusual
circumstances, where commencement depends on an event whose timing is
uncertain. The Committee further noted that there was no indication in
the Explanatory Memorandum of the reason for adopting a provision in this
form.
Accordingly, the Committee sought the advice of the Minister on the reason
for choosing the mechanism in subclause 2(3).
Pending the Minister's advice, the Committee drew Senators' attention
to the provision, as it may be considered to delegate legislative power
inappropriately, in breach of principle 1(a)(iv) of the Committee's terms
of reference.
On this issue, the Special Minister of State responded as follows:
In regard to the first point, the provisions listed in subclause 2(3)
relate to the upgrading of witnessing requirements for electoral enrolment,
the requirement for new electors to produce one original proof of identity
document at the time of lodging an enrolment form, and the removal of
the one month qualifying period for enrolment.
The delay in commencement of these provisions will enable consultation
and discussion with the State and Territory governments giving them the
opportunity to enact complementary legislation.
Without complementary legislation the joint roll arrangements could become
irrelevant, requiring electors to complete separate enrolment applications
to become enrolled on the Commonwealth and State/Territory rolls. This
would be confusing to electors, and would create a duplication of the
work involved in processing the claims. As a result, the Commonwealth
and State/Territory rolls would soon become out of kilter, leading to
accusations of a lack of integrity in the rolls – the very thing
these amendments are aimed at improving.
The Australian Electoral Commission (AEC) has advised that it will require
a minimum of 6 months to make the necessary administrative arrangements
to implement the amendments.
Under these circumstances, the amendments may not be able to be implemented
before the next federal election.
The Committee thanks the Special Minister for this response.
The voting rights of prisoners
Schedule 1, Item 10
Section 93(8)(b) of the Commonwealth Electoral Act 1918 governs
the circumstances in which prisoners may have their names excluded from
the Commonwealth Electoral Roll. It currently provides that those serving
a sentence of imprisonment of 5 years or longer are not entitled to enrol
or vote at a federal election.
Item 10 of Schedule 1 to the bill proposes to extend this limitation
to all prisoners. The Minister's Second Reading speech observes that this
proposed amendment is based on a recommendation of the Joint Standing
Committee on Electoral Matters, which, in its report on The 1996 Federal
Election, stated that those “who disregard the Commonwealth or
State laws to a degree sufficient to warrant imprisonment should not expect
to retain the franchise”.
One Minority Report argued that the current provision represented “a
reasonable balance between conflicting concepts” and suggested that
the new provision “would be even harsher than those provided in 1902”.
Another Minority Report stated that this issue should be addressed when
it took legislative form.
Consideration of the issue in 1994 and before
Section 93(8)(b) of the Act has been subject to considerable debate in
recent years. Prior to 1983, the Act denied the franchise to all those
serving sentences for offences punishable by imprisonment for 1 year or
more. On the passage of the Commonwealth Electoral Legislation Amendment
Act 1983, the franchise was extended to those serving sentences for
offences punishable by imprisonment for less than 5 years – in effect,
prisoners were then denied a vote where they were convicted of an offence
having a potential maximum penalty of 5 years imprisonment.
In a submission to the Joint Standing Committee on Electoral Matters,
the Australian Electoral Commission (AEC) noted that this provision had
led to difficulties both in practice and in principle. In practice, it
was difficult to establish, with certainty, every case in which the potential
maximum sentence was imprisonment for 5 years or more. And in principle,
such a provision was potentially inequitable – “a person serving
an actual sentence of one month could be excluded from enrolment, while
a person on a sentence of 59 months could be eligible, depending on the
potential maximum sentence in each case”.
Therefore, the AEC submitted that a person should be denied a vote only
where they were actually serving a sentence of 5 years or more. This approach
was ultimately included in the Act (see item 5 of Schedule 1 to the Electoral
and Referendum Amendment Act 1995), and is currently the law.
However, the approach advocated by a majority of the Joint Standing Committee
in 1994 went somewhat further than the AEC's proposal. In its Report on
The 1993 Federal Election, the Committee noted that it had previously
recommended that enrolment and voting rights be granted to all prisoners,
regardless of their sentence (unless convicted of treason or treachery):
an offender once punished under the law should not incur the additional
penalty of loss of the franchise. We also note that a principal aim of
the modern criminal law is to rehabilitate offenders and orient them positively
toward the society they will re-enter on their release. We consider that
this process is assisted by a policy of encouraging offenders to observe
their civil and political obligations.
In a dissenting report, then Opposition members stated:
As our coalition colleagues on the committee in the 34th Parliament said
when this proposal was last mooted, the concept of imprisonment –
apart from any rehabilitation aspects – is one of deterrence, seeking
by the denial of a wide range of freedoms to provide a disincentive to
crime. A person having committed an offence against society is denied
the privileges and freedoms of society of which one important one is the
right to vote. The Committee's recommendation is therefore driven by a
philosophical position with which we strongly disagree.
The Committee notes the continuing debate and draws the attention of
Senators to the various views that have informed it.
The Committee also notes that it currently has before it an inquiry into
the appropriate basis for including certain penalty provisions - particularly
imprisonment - in legislation. It is possible that people may be imprisoned
- perhaps on weekend detention - for relatively minor offences such as
failing to provide information or traffic infringements or conscientiously
objecting to certain matters. As a consequence, under the bill such people
may be denied a vote. While conscious of the continuing debate on philosophical
grounds, the Committee would nevertheless appreciate the Minister's advice
as to whether consequences such as those noted above are inadvertent or
intended.
On this issue, the Special Minister of State has advised as follows:
Previous legal advice indicates that `sentence' connotes a judicial judgment
or pronouncement fixing a term of imprisonment. A term of imprisonment
is the term fixed by the judgment as the punishment for the offence.
It should be noted that, as is currently the case, persons detained on
remand or otherwise, or who are held at Her Majesty's pleasure, are not
considered to be sentenced to imprisonment and, as such, the new provisions
would not apply to them.
In regard to persons sentenced to short term imprisonment, where the
AEC receives timely notice that a person has been sentenced to a term
of imprisonment, appropriate action will be taken to remove that person's
name from the roll. However, while the AEC will be seeking to receive
early notification from the Controller of Prisons in each State and Territory,
where the AEC receives notice that a person has been sentenced to a term
of imprisonment, but that term of imprisonment has expired, the AEC does
not propose taking retrospective action. It should also be noted that
there are inconsistencies in the notification procedures between the various
States and Territories.
Further, included in the amendments of the Bill are the repeal of facilities
for mobile polling in prisons and the right to a postal vote due to imprisonment.
Accordingly, there will be no facility for voting by persons in prison.
The AEC sought details of the practical application of a similar provision
in the Tasmanian State electoral legislation. The Tasmanian Constitution
Act 1934 provides that “no person under any conviction …
is entitled to vote in any election…”. The Tasmanian Electoral
Act 1985 provides that the Controller of Prisons shall forward to
the Chief Electoral Officer each month for appropriate action, a list
of all persons sentenced to a term of imprisonment of 12 months or more.
Advice received is that, in a practical sense, it would be extremely
difficult for a Tasmanian prisoner to vote in a State election. No provision
is made for mobile polling facilities in prisons and prisoners do not
qualify for a postal vote as there is a polling place within 8kms of the
jail. The proposed amendments of the Bill would have a similar effect.
The AEC also sought advice on the application of prisoner voting provisions
in Britain. The advice received was that convicted prisoners in the UK
are legally prevented from voting while detained in penal institutions
in pursuance of their sentences. However, convicted but unsentenced and
remand prisoners may vote. Sentenced prisoners temporarily absent from
prison, for example, while on `home leave' are still ineligible to vote.
There is no equivalent of weekend detention in Britain.
The Committee thanks the Special Minister for this advice. The Committee
notes that, under the Bill, it is possible that voters may be dealt with
differently depending on the nature of their sentence and the effectiveness
of notification procedures in the various States and Territories. Accordingly,
the Committee continues to note the possible effect of this provision
on personal rights and liberties.
Payment Systems and Netting Bill 1998
This bill was introduced into the House of Representatives on 1 April
1998 by the Parliamentary Secretary (Cabinet) to the Prime Minister. [Portfolio
responsibility: Treasury]
The bill proposes to:
- ensure that multilateral netting arrangements in the payment system
that are approved by the Reserve Bank will survive the insolvency of
a participant in the arrangement;
- exempt real time gross settlement payments from the possible application
of the Zero Hour Rule; and
- provide certainty for close-out netting in financial markets and for
netting undertaken in accordance with the rules governing stock and
futures exchanges and the associated clearing houses.
The Committee dealt with this bill in Alert Digest No. 5 of 1998, in
which it made various comments. The Parliamentary Secretary to the Treasurer
has responded to those comments in a letter received on 19 June 1998.
A copy of that letter is attached to this report, and the relevant parts
of the response are discussed below.
Non-reviewable discretions
Clauses 9 and 12
In Alert Digest No. 5 of 1998, the Committee noted that clause 9 of the
bill provides the Reserve Bank with a discretion to approve a payment
or settlement system. Under subclause 9(3)(c), the exercise of this discretion
is subject to a measure of Parliamentary review in that an approval is
a disallowable instrument.
Clause 12 of the bill provides the Reserve Bank with a discretion in
deciding whether or not to approve a multilateral netting arrangement.
However, the exercise of this discretion does not seem subject to review
of any kind. Accordingly, the Committee sought the advice of the Treasurer
on the following matters:
i) why the exercise of the discretion by the Reserve Bank under clause
12 is not subject to review; and
ii) why a failure or refusal by the Reserve Bank to exercise its discretion
under clauses 9 and 12 is not reviewable.
Pending the Treasurer's advice, the Committee drew Senators' attention
to these provisions, as they may be considered to make rights, liberties
or obligations unduly dependant upon non-reviewable decisions, in breach
of principle 1(a)(iii) of the Committee's terms of reference.
The Parliamentary Secretary to the Treasurer has responded as follows:
Clauses 9 and 12 of the Bill allow the Reserve Bank to approve payments
systems where the failure of a participant in the system could result
in systemic disruption in the financial system. In each case, the purpose
of the approval is to reduce the potential for systemic disruption in
the financial system.
The Wallis Report on the financial system highlighted the importance
of efficient prudential regulation by competent authorities in the financial
markets to help maintain stability and reduce systemic risk. As witnessed
recently during the Asian currency crisis, failure of financial institutions
to settle their obligations can involve considerable cost to economic
growth and the safety of investments. By enhancing the Reserve Bank's
supervisory role in the payments system and for netting arrangements,
the Bill aims to reduce the likelihood of financial shocks and strengthen
the resilience of Australia's financial system.
Given its pivotal role in the regulation of the financial system, the
Reserve Bank is well placed to decide whether the failure of a participant
in a payments system could result in systemic disruption in the financial
system. While it is true that decisions made under clauses 9 and 12 of
the Bill will affect the commercial interests of the parties directly
concerned, they may also have a profound effect on confidence in the payments
system more generally and hence on the stability of the financial system.
It would be undesirable to have the Reserve Bank's decisions on these
matters altered by another body that is unlikely to be as competent or
to have a similar interest and expertise in the public interest dimension
of the payment system.
I should mention, however, that while merits review will not be available,
decisions made by the Reserve Bank under clause 9 and 12 will be subject
to judicial review under the Administrative Decisions (Judicial Review)
Act 1977.
I trust this information will assist the Committee in its deliberations.
The Committee thanks the Parliamentary Secretary for this advice.
Taxation Laws Amendment (Company Law Review) Bill 1998
This bill was introduced into the House of Representatives on 8 April
1998 by the Parliamentary Secretary (Cabinet) to the Prime Minister. [Portfolio
responsibility: Treasury]
The bill proposes to amend the Income Tax Assessment Act 1936 and
associated tax laws to prevent dividend substitution and capital streaming
arrangements and to make consequential amendments to tax laws. The bill
also proposes to introduce a tainting rule that treats distributions from
a tainted share capital account as unfrankable and unrebateable dividends
in the hands of shareholders.
The Committee dealt with this bill in Alert Digest No. 4 of 1998, in
which it made various comments. The Assistant Treasurer has responded
to those comments in a letter dated 26 May 1998. A copy of that letter
is attached to this report, and relevant parts of the response are discussed
below.
Indeterminate application
Schedule 1, Item 3
In Alert Digest No. 6 of 1998, the Committee noted that by virtue of
item 3 of Schedule 1, the amendments proposed by that Schedule are to
apply to the provision of bonus shares or capital benefits occurring on
or after a day to be fixed by Proclamation. Therefore, the amendments
proposed by this Schedule contravene the spirit of Office of Parliamentary
Counsel Drafting Instruction No 2 of 1989. This suggests that clauses
providing for commencement by Proclamation, with no other restrictions
as to time of commencement, should be used only in unusual circumstances,
where commencement depends on an event whose timing is uncertain. The
Explanatory Memorandum apparently provides no indication of the need for
such an open-ended application provision. Accordingly, the Committee sought
the advice of the Treasurer on the reason for adopting such a provision.
Pending the Treasurer's advice, the Committee drew Senators' attention
to the provision, as it may be considered to delegate legislative power
inappropriately, in breach of principle 1(a)(iv) of the Committee's terms
of reference.
The Assistant Treasurer has responded as follows:
I understand that the Committee is concerned that this application provision
may contravene the spirit of Office of Parliamentary Counsel Drafting
Instruction No. 2 on the basis that `clauses providing for commencement
by Proclamation, with no other restrictions as to time of commencement,
should be used only in unusual circumstances, where commencement depends
on an event whose timing is uncertain'.
In fact, the commencement does depend on an event whose time is uncertain.
By way of background, the Bill will make various consequential amendments
to the taxation laws as a result of changes being made to the Corporations
Law by the Company Law Review Bill 1997 (the Review Bill) which abolishes
the concept of par value for shares and makes it easier for companies
to return capital to shareholders.
Although the two Bills are related in this regard, they are not passing
through Parliament at the same time.
As a result it is difficult to predict with any degree of certainty when
the amendments made by the Bill should apply because it is contingent
upon the successful passage of both Bills through Parliament. Therefore,
the proposed application provision falls within that category of unusual
circumstances where commencement depends on an event whose timing is uncertain.
For this reason, the commencement of the Bill on a date to be fixed by
proclamation after the Bill has been passed by Parliament is appropriate.
The Committee thanks the Assistant Treasurer for this response.
Barney Cooney
Chairman
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