BILLS DIGEST NO. 177, 2011–12, 27 June 2012

Legislative Instruments Amendment (Sunsetting Measures) Bill 2012

Moira Coombs
Law and Bills Digest Section

Date introduced:  23 May 2012

House:  House of Representatives

Portfolio:  Attorney-General

Commencement:  The day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose

The purpose of the Legislative Instruments Amendment (Sunsetting Measures) Bill 2012 (the Bill) is to amend the Legislative Instruments Act 2003 to:

•       automatically repeal spent instruments and provisions

•       clarify the sunsetting dates of repeal for particular categories of instruments

•       enable thematic reviews of instruments by enabling the Attorney-General to align sunsetting dates of instruments and

•       specify the requirements for information  to be included in explanatory statements.

Background

The Legislative Instruments Act 2003 (the Legislative Instruments Act) was passed in 2003 and commenced on 1 January 2005. The objects clause of the Legislative Instruments Act states its purpose as follows:

The object of this Act is to provide a comprehensive regime for the management of Commonwealth legislative instruments by:

 (a)  establishing the Federal Register of Legislative Instruments as a repository of Commonwealth legislative instruments, explanatory statements and compilations; and

 (b)  encouraging rule‑makers to undertake appropriate consultation before making legislative instruments; and

(c)  encouraging high standards in the drafting of legislative instruments to promote their legal effectiveness, their clarity and their intelligibility to anticipated users; and

 (d)  improving public access to legislative instruments; and

  (e)  establishing improved mechanisms for Parliamentary scrutiny of legislative instruments; and

 (f)  establishing mechanisms to ensure that legislative instruments are periodically reviewed and, if they no longer have a continuing purpose, repealed.[1]

The Administrative Review Council[2] in 1992 recommended that ‘sunsetting’ provisions be included in the Legislative Instruments Act and that all instruments be sunsetted 10 years after the principal instrument was first made.[3] The rationale for the recommendation was that ‘even though the sponsoring agency may keep all rules under review on an ongoing basis, sunsetting provides a formal mechanism to ensure that rules do not become outdated.’ Sunsetting is an opportunity to clean up the statute books ‘concentrate the minds of rule-makers a lot more carefully and as a result, a lot of useless delegated legislation might be knocked off the statute books’.[4]

Basis of policy commitment

The Productivity Commission report Identifying and Evaluating Regulation Reforms was commissioned by the Australian Government to:

... provide its assessment of ‘frameworks and approaches’ for identifying areas for further regulation reform and methods for evaluating reform outcomes. This follows four rounds of the Annual Review of Regulatory Burdens on Business, covering all sectors of the economy, previously undertaken by the Commission.[5]

This report provides the basis for the amendments contained in this Bill. It raises concerns about the volume of instruments sunsetting in 2015 and an ‘increased risk that instruments will be remade without adequate review and without proper consultation with business and stakeholders’.[6]

Under the Legislative Instruments Act, subordinate legislation will start sunsetting from early 2015. The Legislative Instruments Act requires that 18 months before a sunsetting date occurs, a list of legislative instruments due to sunset is required to be tabled in Parliament.[7] Parliament then has six months in which to pass a resolution to continue nominated legislative instruments on the list in force. The first such list is due to be tabled in 2013.[8]

The report further notes:

Under the Australian Government sunsetting provisions the challenge of identifying regulations needing reform will be substantial, particularly in the first few years of the commencement of sunsetting. The current [Legislative Instruments Act] LIA arrangements for when pre-2005 instruments are scheduled to sunset mean that the number of sunsetting instruments will be both large and highly volatile.

Data provided by the Office of Legislative Drafting and Publishing show ‘twin peaks’ in the number of sunsetting instruments that will see an estimated 2000 principal instruments sunset in October 2016 and a further 1000 in April 2018, with this pattern likely to be repeated every 10 years...[9]

Around 6300 principal instruments are scheduled to sunset between 2015 and 2022. The bulk of these will sunset on or before 1 April 2018, the majority of which are regulations made prior to the commencement of the LIA in 2005...[10]

While the exact extent of the forthcoming review task facing departments and agencies is not known at this time, it is potentially large. Concerns have been expressed for some time about how the volume of reviews will be handled.

As early as 2004, rule-making agencies were advised to monitor their registered instruments and review them well before sunsetting. The LIA handbook warned that: agencies should not wait until the last 18 months before they review their instruments and decide whether some should be repealed, or remade in updated form and continued in force; agencies that propose to repeal existing instruments and remake them in updated form will need sufficient time to seek the necessary approvals and draft replacement instruments; and agencies that leave these matters until the last 18 months risk having their instruments sunset by default.[11]

Committee consideration

Senate Selection of Bills Committee

The Selection of Bills Committee resolved at its meeting on 18 June 2012 to recommend that the Bill not be referred to a Committee.[12]

Senate Standing Committee for the Scrutiny of Bills

The Standing Committee for the Scrutiny of Bills had no comment to make on this Bill in the Alert Digest for 20 June 2012.[13]

Financial implications

The Explanatory Memorandum states that the amendments in this Bill have no impact on Government revenue.[14]

Key provisions

Part 1—Repeal of spent instruments and provisions      

Section 45 of the Legislative Instruments Act deals with the effect of a legislative instrument ceasing to have effect. Subsection 45(1) (which is not affected by the Bill) provides that if a legislative instrument or a provision of a legislative instrument (the affected instrument or provision) ceases, at a particular time, to have effect because it was not tabled as required (subsection 38(3)) or was disallowed by Parliament (section 42), then it is as if the instrument or provision had been repealed at that time.  In addition, current subsection 45(2) provides that if the affected instrument or provision also repealed another provision, then, on the affected instrument or provision ceasing to have effect, the provision that it repealed is revived, but not if it has already ceased to have effect as it has sunsetted under current Part 6 of the Legislative Instruments Act  

Item 9 repeals and replaces subsection 45(2) to provide that if a legislative instrument or a provision of a legislative instrument (the repealing instrument or provision):

•       ceases to have effect, at a particular time, because it was not tabled (subsection 38(3)) or was disallowed (section 42) or

•       would have ceased to have effect then if it had not already been automatically repealed under proposed sections 48A or 48C (discussed below)

and that instrument or provision repealed another legislative instrument or law, then the repealed instrument or law revives from the time that the repealing instrument or provision ceases to have effect, as if the repealing instrument or repealing provision had not been made.

This means that a failure to table an instrument, or disallowance of an instrument by Parliament, will still have the effect of ‘reviving’ provisions that the instrument repealed, even if that instrument is repealed automatically by proposed section 48A or 48C. 

Item 10 inserts new Part 5A into the Legislative Instruments Act. Within that new Part, proposed section 48A deals with the automatic repeal of amending and repealing instruments.  Proposed subsection 48A(1) provides for the repeal of a legislative instrument that is made on, or after, the commencement of this section (that is, the day after Royal Assent) if its only legal effect is to amend or repeal one or more legislative instruments without any application, saving or transitional provisions.  The repeal of the instrument happens on the day after the later of: the commencement of the instrument, or its last provision; or the registration of the instrument on the Federal Register of Legislative Instruments (proposed subsection 48A(2)). The fact that an instrument is repealed does not affect an amendment or repeal made by the repealed instrument. This provision does not limit section 7 of the Acts Interpretation Act 1901 (AIA), which is concerned with the effect of repeal, or amendment, of an Act as it applies to the instrument (proposed subsection 48A(3)). Sections 38[15] and 42 of the Legislative Instruments Act[16] are not prevented from applying to the instrument after its repeal by this section (proposed subsection 48A(4)).

Proposed section 48B deals with the automatic repeal of commencement instruments in similar terms to those set out in proposed section 48A. Proposed subsection 48B(1) repeals those legislative instruments made on, or after, the commencement of the section that provide solely for the commencement of other legislative instruments, Acts, or  provisions of an Act or legislative instrument.

Proposed section 48C provides for the automatic repeal of amending and repealing provisions of legislative instruments that contain other matters. Proposed subsection 48C(1) provides that a provision of a legislation instrument is repealed if:

•       the instrument is made on or after the commencement of this section and is not an instrument described in subsection 48A(1) and

•       the only legal effect of the provision is to amend or repeal one or more other legislative instruments, or amend the instrument containing the provision.

Proposed section 48D provides for the automatic repeal of commencement provisions of legislative instruments containing other matters in terms similar to those set out in proposed section 48C. Proposed subsection 48D(1) provides for the repeal of a provision of a legislative instrument if:

•       the instrument is made on or after the commencement of  the section and is not an instrument described in subsection 48B(1) and

•       the provision is solely for the commencement of the instrument, another legislative instrument or an Act,  or a provision of the instrument, another legislative instrument or an Act.

Part 2—Date of Sunsetting

The Explanatory Memorandum states that Part 2 of Schedule 1 to the Bill will do the following:

•       reset the rules for calculating when instruments sunset to focus on the date of registration

•       allow a common sunsetting date to be established for related instruments, subject to disallowance by the Parliament, and

•       make a variety of technical changes to improve the clarity and consistency of language in the provisions of the Legislative Instruments Act that relate to sunsetting.[17]

Item 13 repeals and replaces section 50 of the Legislative Instruments Act, to specify when legislative instruments sunset. Proposed subsection 50(1) provides that a legislative instrument is repealed on the first 1 April or 1 October after the 10th anniversary of registration of the instrument, unless the instrument was registered on 1 January 2005.

Proposed subsection 50(2) sets out a table of the days of repeal for instruments that were registered on 1 January 2005.  This will stagger the repeal of the many instruments, from years prior to 2005, that were registered at the creation of the Federal Register of Legislative Instruments. 

Proposed subsection 50(3) explains that this section has effect subject to new Part 5A (that is, proposed sections 48A–48D as outlined above) and sections 51, 51A, 53 and 54.

Thematic reviews

Item 18 inserts proposed section 51A so that the Attorney-General may declare common sunsetting dates so that thematic reviews of instruments can be undertaken.

The purpose of the declaration by the Attorney-General is to facilitate the undertaking of a single review of related instruments and the implementation of the review’s findings (proposed paragraph 51A(1)(b)).

Proposed 51A(2) provides that the date specified in the sunset-altering instrument as the date of repeal of the group of instruments:

•       must be 1 April or 1 October

•       cannot be more than five years after the earliest date on which any of the legislative instruments would otherwise sunset and

•       may be the same date, or a different date, than the date on which any of the legislative instruments would otherwise sunset.

Item 21 repeals and replaces subsection 52(2) of the Legislative Instruments Act. This proposed subsection requires the Attorney-General to table a list of legislative instruments to be repealed by section 50, 51 or 51A on the first sitting day of a House of Parliament that occurs within 18 months before the date on which the legislative instrument will sunset. 

Item 23 repeals and replaces section 53, which relates to Parliamentary resolutions to continue in force an instrument that would otherwise sunset. Proposed subsection 53(1)  provides that a legislative instrument will continue in force if the instrument is mentioned in either a certificate tabled under section 51 or a list tabled under section 52; and the House indicates by resolution within six months after that tabling that the instrument should continue in force. Proposed subsection 53(2) provides that the legislative instrument will continue in force, still subject to sections 50, 51 and 51A after the passage of the resolution as if it were registered on the day on which it would have been repealed; and subject to any later instrument which amends or repeals it.

Explanatory Statements

Item 26 inserts proposed subsections 26(1A)—(1D) into the Legislative Instruments Act, to set out the requirements for an explanatory statement.[18]  Proposed subsection 26(1A) prescribes what each explanatory statement must contain.  In particular, proposed paragraph 26(1A)(b) requires the explanatory statement to explain the purpose and operation of the instrument.

Proposed subsection 26(1B) clarifies how the requirement in proposed paragraph 26(1A)(b) may be satisfied. Specifically, the requirement may be met by explaining that the instrument replaces an earlier instrument or a specified provision and is the same in substance as the specified instrument, or that a provision of an instrument replaces an earlier legislative instrument or provision of that instrument but is essentially the same. Proposed subsection 26(1D) provides that a single explanatory statement can apply to one or more instruments.

Part 4—Repeal of section 15

Item 27 repeals section 15 of the Legislative Instruments Act. Section 15 deals with the effect of repeal of legislative instruments. The Explanatory Memorandum states that repealing section 15 will ensure:

that the repeal of legislative instruments is covered by section 7 of the Acts Interpretation Act 1901. Thus, these interpretative rules [in section 7] will now automatically apply to Acts, legislative instruments and non-legislative instruments.[19]

Concluding comments

The current Bill will assist government agencies and stakeholders to cope with the requirements of the sunsetting provisions from 2015 onwards. It provides a more effective way to manage the increasing levels of growth in regulation in past years.

The review of the Legislative Instruments Act in 2008 expressed concerns as follows:

In the Committee’s view, agencies are not sufficiently active in this respect.

Many agencies indicated varying states of preparedness for the commencement of sunsetting in 2015 or its ongoing operation. A number admitted informally to the Committee that no action had yet been taken to review, or to plan for the review, of the legislative instruments they administer.

Given that many agencies make several hundred legislative instruments each year, the task of reviewing each one to determine if it has ongoing operation will be significant. The number of instruments to be reviewed in the lead-up to their sunsetting in 2016 or 2018 will be particularly high. The sunsetting date for instruments made in the five years before the LIA commenced is 1 October 2016. The sunsetting date for instruments made prior to that five-year period is 1 April 2018.

The review of legislative instruments will be ongoing after the initial sunsetting date and will need to be undertaken several years in advance of sunsetting dates. If agencies wait until the Attorney-General tables the list of instruments due to sunset (which occurs 18 months before the sunsetting date), they will have only six months to review the instruments before the Parliament must resolve which instruments should continue in force.[20]

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2442.

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ISSN 1328-8091

[1].               Section 3, Legislative Instrument Act 2003.

[2].               Administrative Review Council, ‘Rule making by Commonwealth Agencies’, Report No. 35, Canberra, 1992.

[3].               A ‘sunset’ provision is one which provides that a particular agency, benefit, or law will expire on a particular date, unless it is reauthorised by the legislature.

[4].               M Coombs, Legislative Instruments Bill 2003, Bills Digest, no. 26, 2003-04, Parliamentary Library, Canberra, 2003, viewed 26 June 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillsdgs%2FMZDV6%22

[5].               Productivity Commission, Identifying and Evaluating Regulation Reforms, Research report, 15 December 2012, p. 1, viewed 26 June 2012, http://www.pc.gov.au/projects/study/regulation-reforms/report

[6].               N Roxon (Attorney-General), ‘Second reading speech: Legislative Instruments Amendment (Sunsetting Measures) Bill 2012’, House of Representatives, Debates, 23 May 2012, p. 3.

[7].               Productivity Commission, op. cit., p. 3. Section 52, Legislative Instruments Act 2003.

[8].               Productivity Commission, op. cit., p. 3.

[9].               Productivity Commission, op. cit., p. 16.

[10].               Productivity Commission, op. cit., p. 27.

[11].               Productivity Commission, op. cit., p. 28.

[12].               Senate Selection of Bills Committee, Report no. 6 of 2012, 19 June 2012, viewed 25 June 2012, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=selectionbills_ctte/reports/2012.htm

[13].               Senate Standing Committee for the Scrutiny of Bills, Alert Digest, no. 6 of 2012, 20 June 2012, viewed 25 June 2012, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=scrutiny/alerts/2012/index.htm

[14].               Explanatory Memorandum, Legislative Instruments Amendment (Sunsetting Measures) Bill 2012, p. 2.

[15].               Section 38 outlines the requirement to table disallowable instruments in both Houses of the Parliament.

[16].               Section 42 sets out the process by which either House of the Parliament may disallow a legislative instrument.

[17].               Explanatory Memorandum, Legislative Instruments Amendment (Sunsetting Measures) Bill 2012, p. 8.

[18].               Item 24 repeals and replaces the definition of ‘explanatory statement’ in subsection 4(1) of the Legislative Instruments Act so that an ‘explanatory statement’ in relation to a legislative instrument, means the statement that relates to the instrument and meets the requirements in subsection 26(1A).

[19].               Explanatory Memorandum, Legislative Instruments Amendment (Sunsetting Measures) Bill 2012, p. 14.

[20].               J McMillan, A Blunn and I Govey, Review of the Legislative Instruments Act 2003, Canberra, 2008, viewed 27 June 2012, http://www.ag.gov.au/Documents/b_LIA%20review%20-%20report%20May2009.PDF