Bills Digest no. 7, 2006–07
Australia-Japan Foundation (Repeal and Transitional Provisions)
Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Financial Implications
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Australia-Japan
Foundation (Repeal and Transitional Provisions) Bill 2006
Date
introduced: 10 May 2006
House:
House of Representatives
Portfolio:
Foreign Affairs
Commencement:
The machinery provisions of the Bill commence
on Royal Assent. The substantive provisions commence on proclamation.
To repeal the Australia-Japan Foundation
Act 1976, abolishing the Australia-Japan Foundation(1)
as a statutory body and bringing it under the aegis of the Department
of Foreign Affairs and Trade.
The establishment of an Australia-Japan Foundation was
first mooted publicly by Prime Minister Gough Whitlam in a speech to a
parliamentary luncheon for the Japanese Prime Minister, Kakuei Tanaka,
on 1 November 1974:
For all that we share in common, it must be acknowledged
that we have profoundly contrasting traditions and cultures. For all
the growth in co-operation of the past generation, for all the growing
closeness in our relations in that time it must be said that all too
often we look at each other with a stare of mutual incomprehension and
mutual ignorance. It is therefore very important that we should create
a framework within which well motivated and competent Australians and
Japanese who wish to build understanding and goodwill between our two
countries can operate more effectively. With this in mind we are proposing
to establish a foundation as a vehicle to promote and foster a continuing
program to build and widen mutual contacts at all levels—Business, Academic,
Cultural, Scientific, Trade Unions. We all recognise our great community
of interest, equally we have to recognise that there are great barriers—language,
tradition, culture, distance—in the way of making that community even
closer and warmer. Let us begin to break these barriers down.(2)
An ad hoc committee was appointed in December 1974 to
consider how to proceed, and its February 1975 report, recommending the
establishment of a foundation as a statutory body, was accepted by Cabinet
on 24 July 1975.(3) The Australia-Japan Foundation Bill 1976
was introduced by Prime Minister Malcolm Fraser on 19 February 1976, and
received Royal Assent on 7 April 1976.
The functions of the Foundation
are set out in subsection 5(1) of the Act. They are:
to encourage a closer relationship between the peoples
of Australia and Japan and to further the mutual knowledge and understanding
of those peoples and, in particular, but without limiting the foregoing:
(a) to promote the study by the people of each of those
countries of the language, culture and traditions, the social and political
institutions, and the economic and industrial organization, of the people
of the other country;
(b) to promote the study by the people of each of those
countries of the physical features, climate and ecology of the other
country;
(c) to encourage people of each of those countries to
visit the other country …
The intended purpose of the Foundation in broadening
the relationship between the two countries beyond an economic one is clearly
evidenced in the debate of the (then) Bill.
The Foundation is governed by its members, of whom there
are currently six. The members are appointed by the Minister for Foreign
Affairs. The Minister may issue general directions to the Foundation regarding
the performance of its functions: sub-section 5(3).
As the second reading speech indicated, there are currently
eight bilateral bodies in the Department of Foreign Affairs and Trade
that undertake similar functions to the Australia-Japan Foundation. These
are:
1. Australia-China
Council, established by an Order-in-Council of the Governor-General
on 17 May 1978(4)
2. Australia-Indonesia
Institute, established by an Order-in-Council of the Governor-General
on 27 April 1989(5)
3. Australia-Korea
Foundation, established by an Order-in-Council of the Governor-General
on 7 May 1992,
replaced on 8 April 2004 (6)
4. Australia-India
Council, established by an Order-in-Council of the Governor-General
on 21 May 1992(7)
5. Council
on Australia Latin America Relations, established in March 2001(8)
6. Council
for Australian-Arab Relations, established in December 2002(9)
7. Australia-Malaysia
Institute, established on 29 June 2005, and formally launched on
28 March 2006, and(10)
8.
Australia-Thailand Institute,
established on 29 June 2005.(11)
There is also an Australia
International Cultural Council.(12) None of these nine
bodies is a statutory authority. However, the Australia-Japan Foundation’s
annual expenditure—$3,159,338 in 2004–05—also appears to be much larger
than that of the non-statutory bodies; for example:
Australia-China Council: $752,131
Australia-Indonesia Institute $1,033,817
Australia-Korea Foundation (2003-04) $743,229
Council on Australia Latin America Relations $399,973
Council for Australian-Arab Relations $492,030(13)
In the 2001 election campaign, the government undertook
to review the structures and governance practices of all its statutory
authorities.(14) The review was set up in November 2002 and
reported in July 2003: Review
of the Corporate Governance of Statutory Authorities and Office Holders
(‘Uhrig Report’).(15) The report was released in August 2004,
along with a government
response, in which the government further undertook to analyse around
160 statutory bodies against the two governance templates put forward
in the Uhrig Report.(16)
This Bill is one of a number of Bills that have resulted
from the review process.(17) In most of those cases, the outcome
has meant a change in the way in which a statutory body is managed
or governed. In the case of the Australia-Japan Foundation, the change
is more fundamental, from statutory body to non-statutory body. There
is no hard-and-fast rule as to whether a body should be statutory or not.
In 1987, the Hawke Government issued policy guidelines which stated:
1. Consistent with its policy of using Departments of
State where possible, the Government will make sparing use of the statutory
authority form of administration when new responsibilities relating
to the normal business of government are undertaken or existing functions
are upgraded.
2. Occasions may nevertheless arise where the desirable
and sensible course will be to establish a statutory authority. Those
proposals which do come forward will accordingly be rigorously examined
to guard against unnecessary fragmentation of the machinery of government,
to ensure consistency in structure and in relationships with Parliament
and the Government, to provide an appropriate degree of direction and
scrutiny, and to ensure there are avenues and opportunities for full
and effective accountability to the Parliament and the Government.
3. This approach will not preclude creation within the
departmental framework of distinct organisations for specialist purposes
and ready public identification. There is already widespread use of
this method, exemplified by the various research bureaux which combine
the advantages of distinctive organisational identity without derogation
from the principle of Ministerial responsibility for administration
or circumvention of the regular machinery for resource allocation, management
and administrative control.(18)
The question of whether a function should be carried
out by a statutory or non-statutory body was also considered very briefly
in the Uhrig Report:
The powers and functions of statutory authorities and
office holders are generally specified in significant detail in the
enabling legislation. While this is a feature of statutory authorities,
it also has the effect of limiting the flexibility in responding to
changing government and community priorities. Legislation may become
dated and can be difficult to change.
Consideration should be given to whether functions can
be accommodated successfully within a departmental structure or an executive
agency, reducing the need for the creation of a separate authority and
the associated costs and demands placed on the public sector.
As government remains accountable for the performance
of statutory authorities, careful thought needs to be given to any decision
to create bodies that will operate with a higher level of independence
than departments of state, as this will impact on ministerial ability
to supervise directly the performance of such bodies. The value of a
centrally located coordination function to assist government in this
regard is canvassed later in this chapter.(19)
In terms of the specific rationale for repealing the
Act, the Minister said in the second reading speech that:
It is anticipated that revoking the foundation’s statutory
status and bringing it into the Department of Foreign Affairs and Trade
will better align the foundation’s activities with the government’s
foreign and trade policy objectives in Japan, one of our most important
and productive bilateral relationships. It is also expected to improve
the foundation’s administrative efficiency. The foundation will continue
its important work in delivering programs in support of those objectives
while promoting contemporary Australia as a culturally diverse and technologically
sophisticated society.(20)
According to the Explanatory Memorandum, the objectives
and functions of the Foundation will be governed by Orders in Council.(21)
There has been no media nor political-party comment on
the proposed repeal. The Senate Selection of Bills Committee decided
on 13 June not to refer the Bill to a committee.
According to the Explanatory Memorandum, this Bill will
have no financial implications for the Commonwealth.(22)
Part 1 of Schedule 1 contains the repeal
of the Australia-Japan Foundation Act 1976.
Part 2 of Schedule 1 contains transitional
provisions. Items 3–8 vest the assets, liabilities, court proceedings
and records of the Foundation in the Commonwealth, effectively meaning
the Department of Foreign Affairs and Trade. Item 11 allows the
transfer of appropriated money from the Foundation to the Department of
Foreign Affairs and Trade (the 2006–07 Budget appropriated $2.373 million
to the Foundation, and this will not be fully spent before the commencement
of this Bill).(23) Item 12 requires a final annual
report to be provided for the Foundation by the Department of Foreign
Affairs and Trade.
Concluding comments
The Bill removes the status of the Australia-Japan Foundation
as a statutory body and enables it to be placed on the same standing as
several similar executive agencies under the umbrella of the Department
of Foreign Affairs and Trade.
-
http://www.ajf.australia.or.jp/english/aboutajf/
-
Hon. Gough Whitlam, Prime Minister, ‘Speech at parliamentary luncheon
for Mr Tanaka’, 1 November 1974, in National Archives of Australia:
Cabinet Office; A5915, Whitlam Ministries—Cabinet Submissions 1972–75;
1918, Australia-Japan Foundation—Decision 3851; Attachment—Report
of the Committee on the proposed Australia-Japan Foundation.
-
ibid., The Committee on the Proposed Australia-Japan Foundation was
comprised of Sir John Crawford, K. B. Myer, Professor E. S. Crawcour,
D. J. Munro (Dept. of Prime Minister and Cabinet) and J. R. Rowland
(Dept. of Foreign Affairs).
-
http://www.dfat.gov.au/acc/
-
http://www.dfat.gov.au/aii/
-
http://www.dfat.gov.au/akf/
-
http://www.dfat.gov.au/aic/
-
http://www.dfat.gov.au/coalar/
-
http://www.dfat.gov.au/caar/
-
http://www.dfat.gov.au/ami/
-
http://www.dfat.gov.au/ati/
-
http://www.dfat.gov.au/aicc/
-
Expenditure figures are taken from their Annual Reports 2004–05 (but
2003–04 for the Australia-Korea Foundation).
-
Liberal–National Coalition, Backing Australia's
industry for the future, election policy issued 1 November 2001,
http://pandora.nla.gov.au/pan/22107/20011109/www.liberal.org.au/policy/Industry
policy.pdf.
-
John A. Uhrig, Review of the corporate governance of statutory
authorities and office holders, Canberra, Commonwealth of Australia,
2003, http://www.finance.gov.au/GovernanceStructures/docs/The_Uhrig_Report_July_2003.pdf.
-
Senator the Hon. N. Minchin, Australian Government Response to
Uhrig Report, media release, Canberra, 12 August 2004, http://www.finance.gov.au/scripts/Media.asp?Table=MFA&Id=550.
-
The other Bills are: Human Services Legislation Amendment Bill 2005,
Superannuation Legislation Amendment (Trustee Board and Other Measures)
Bill 2006, Australian Trade Commission Legislation Amendment Bill
2006, National Health and Medical Research Council Amendment Bill
2006, Australian Research Council Amendment Bill 2006 and Defence
Housing Authority Amendment Bill 2006.
-
Department of Finance, Policy guidelines for Commonwealth statutory
authorities and government business enterprises: a policy information
paper, Canberra, AGPS, 1987, p. 7.
-
John A. Uhrig, op.
cit., p. 58.
-
Hon. A. Downer, Minister for Foreign Affairs, ‘Second
reading speech: Australia-Japan Foundation (Repeal and Transitional
Provisions) Bill 2006’, House of Representatives, Debates,
10 May 2006 , p. 1.
-
Explanatory
Memorandum, p. 2.
-
ibid.
-
Department of Foreign Affairs and Trade, Portfolio Budget Statements
2006–07, Canberra, 2006, p. 219, http://www.dfat.gov.au/dept/budget/2006_2007_pbs/pbs_2006_2007_ajf.pdf.
Patrick O'Neill
1 August 2006
Bills Digest Service
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2006
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