Bills Digest no. 17, 2017–18
PDF version [554KB]
Cathy Madden
Politics and Public Administration Section
14 August 2017
Contents
Purpose of the Bill
Structure of the Bill
Background
Committee consideration
Selection of Bill Committee
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Schedule 1—Listed entities
Schedule 2—Amendments relating to the
Public Governance, Performance and Accountability Act 2013
Section 29 of the PGPA
Act: disclosure of interests requirements
Section 46 of the PGPA
Act: Reporting requirements
Other provisions. 6
Schedule
3—Amendments consequential to the sale of Medibank Private
Schedule 4—Transitional and
application provisions
Date introduced: 22 June 2017
House: House of Representatives
Portfolio: Finance
Commencement: On 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 the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at August 2017.
Purpose of
the Bill
The purpose of the Public Governance and Resources
Legislation Amendment Bill (No.1) 2017 (the Bill) is to amend thirteen Acts to
harmonise relevant provisions with the Public Governance,
Performance and Accountability Act 2013 (PGPA Act). The Bill
also makes minor amendments to relevant legislation as a consequence of the
sale of Medibank Private.
Structure
of the Bill
This Bill has four Schedules:
- Schedule
1 makes amendments to consistently prescribe Commonwealth entities for the
purpose of the PGPA Act within the entities’ enabling legislation
- Schedule
2 repeals provisions in enabling Acts that cover issues provided for in the PGPA
Act; updates provisions changing references from the previous Financial
Management and Accountability Act 1997 (FMA Act) and the Commonwealth
Authorities and Companies Act 1997 (CAC Act) to the PGPA Act
- Schedule
3 makes amendments to three Acts resulting from the sale of Medibank Private
- Schedule
4 contains transitional and consequential provisions.
Background
On 1 July 2014, the PGPA Act implemented a new
financial management framework for the Commonwealth and Commonwealth entities
by replacing the FMA Act and the CAC Act. The PGPA Act takes
a 'principles-based' approach by establishing a core set of obligations that
apply to all officials within Commonwealth entities rather than prescribing
detailed requirements.
Since the introduction of the PGPA Act there has
been further legislation enacted (the Public Governance
Performance and Accountability (Consequential and Transitional Provisions) Act
2014 and the Public
Governance and Resources Legislation Amendment Act (No. 1) 2015[1])
for the purposes of making minor amendments and including transitional and
consequential provisions, and appropriation modifications.
The Bill is part of a broader Public Management Reform
Agenda and represents the next stage in the Government's approach towards transitional
arrangements and consequential amendments to other Commonwealth legislation streamlining
and simplifying resource management and governance arrangements across the
Commonwealth.[2]
The majority of the amendments that are
contained in the Bill are housekeeping items of a technical nature and are
uncontroversial. Some of the proposed changes relate to amendments that, for various
reasons, were unable to be made at the time that the PGPA Act took
effect on 1 July 2014. As a result of further consultation with the relevant
entities, these amendments are being made to the relevant legislation to ensure
that they interact properly with the new financial framework.[3]
Committee
consideration
Selection
of Bill Committee
On 9 August 2017, the Senate Standing Committee for the
Selection of Bills deferred its consideration of the Bill to its next meeting.[4]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills expressed
concern about the operation of item 4 in Schedule 4 to the Bill.
As set out above, Schedule 4 contains transitional and application provisions.
Item 4 of that Schedule provides:
that despite subsections 12(2) and (3) of the Legislation
Act 2003 (which restricts the retrospective application of legislative
instruments), legislative instruments that amend another legislative instrument
as a consequence of amendments or repeals made by the Bill may be expressed to
have taken effect from a date before the amending instrument is registered.[5]
The Committee reiterated its ‘long-standing scrutiny
concern about provisions which facilitate the retrospective application of the
law’ and accordingly sought the Minister’s advice:
as to why it is considered necessary to authorise the making
of retrospective legislative instruments in this instance, including examples
of circumstances where such a power may be used, whether any persons are likely
to be adversely affected and the extent to which their interests are likely to
be affected.[6]
At the time of writing this Digest, the Committee had not
published the Minister’s response. This issue is discussed further under Key
issues and provisions, below.
Policy
position of non-government parties/independents
At the time of writing this Bills Digest neither members
of non-government parties nor independents had commented on the Bill.
Position of
major interest groups
The Explanatory Memorandum states that the Bill was
prepared in consultation with affected Commonwealth entities and that many of
the amendments included in the Bill were identified in earlier consultation on
the Public Governance Performance and Accountability (Consequential and
Transitional Provisions) Act 2014.[7]
Financial
implications
According to the Explanatory Memorandum to the Bill, it
will have no financial impact. However, the Explanatory Memorandum notes that
the harmonisation of the regulatory requirements will contribute to
efficiencies in governance, transparency and accountability arrangements for
Commonwealth entities.[8]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[9]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights considers
that the Bill does not raise human rights concerns.[10]
Key issues
and provisions
Schedule 1—Listed
entities
Schedule 1 (items 1 to 3) prescribes two entities as
‘listed entities’ under the PGPA Act within their enabling legislation.
The provisions name each of those entities, specify who the
accountable authority and officials of the entity are, and set out what the
purposes of the entity include. Both entities are currently listed entities
under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) but this Bill will transfer the listing to primary
legislation.[11]
The Explanatory Memorandum states that this is ‘consistent with preferred
drafting conventions’.[12]
A body or agency that is defined as a
‘listed entity’ under the PGPA Act comes within the definition of
‘Commonwealth entity’ and is therefore subject to the requirements of that Act.
Each Commonwealth entity has an ‘accountable authority’ (such as the Secretary
of a department or the Chief Executive Officer (CEO) of a statutory agency). An
accountable authority has a number of duties and functions under the PGPA
Act, such as the duty to properly govern the entity and establish and
maintain appropriate risk management systems.[13]
Each Commonwealth entity also has ‘officials’. For listed entities, officials
are prescribed by an Act or in the PGPA Rules.[14]
There are general duties that apply to all officials under the PGPA Act,
including a duty to exercise their powers with due care and diligence; and to
act honestly, in good faith and for a proper purpose.[15]
Item 1 amends the Anti-Money
Laundering and Counter-Terrorism Act 2006 to make the Australian
Transaction Reports and Analysis Centre (AUSTRAC) a listed entity, its CEO an
accountable authority and specified persons officials of AUSTRAC for the
purposes of the PGPA Act. Likewise item 2 amends the Competition and
Consumer Act 2010 to make the National Competition Council a listed
entity, the President of the Council an accountable authority and certain
persons officials of the Council for the purposes of the PGPA Act.
Schedule 2 Part 1 (items 1 to 88) amends nine Acts,
including the Australian
Renewable Energy Agency Act 2011, the Building
and Construction Industry (Improving Productivity) Act 2016, Competition and Consumer Act and the Clean
Energy Finance Corporation Act 2012 to align
and harmonise the enabling legislation with the PGPA Act to ensure that
there is consistency with the new financial framework. These amendments do not
change any of the policies or statutory functions contained in the legislation
that is proposed to be amended.
A number of the changes are to delete references to
previous legislation, the FMA Act and the CAC Act, replace
references to the FMA Act and CAC Act with the equivalent
provisions in the PGPA Act and to change references from ‘Commonwealth
authority’ to ‘corporate Commonwealth entity’.
Schedule 2 simplifies enabling
legislation where provisions of the PGPA Act cover an issue previously
dealt with in enabling legislation, such as disclosure of interest arrangements
and reporting arrangements. Under
the PGPA Act disclosure
of interest arrangements are dealt with in section 29 and annual reporting
arrangements are covered under
section 46. For the reader’s convenience sections 29 and 46 of the PGPA Act
are set out below and the following paragraphs provide examples of how the Bill
proposes amendments to enabling legislation that harmonise with these
provisions.
29 Duty
to disclose interests
(1) An
official of a Commonwealth entity who has a material personal interest that
relates to the affairs of the entity must disclose details of the interest.
(2) The rules may
do the following:
(a) prescribe
circumstances in which subsection (1) does not apply;
(b) prescribe
how and when an interest must be disclosed;
(c) prescribe
the consequences of disclosing an interest (for example, that the official must
not participate at a meeting about a matter or vote on the matter).
Items 1, 2 and 3 respectively, would
repeal section 218 and amend paragraph 219(2)(d) and subsection 219(3) of the Anti-Money
Laundering and Counter-Terrorism Financing Act 2006
to align the provisions with section 29 of the PGPA
Act.
Item 7, 9, 10, 12 and 13 amend the Australian Renewable Energy Agency Act 2011: item
7 repeals section 36 and substitutes a new section
referencing the PGPA Act for Board members’ disclosure of interests
requirements; item 12 repeals and substitutes a
new section 57 referencing the PGPA Act for the CEO’s disclosure
requirements.
Items 20, 21 and 22 amend the Building
and Construction Industry (Consequential and Transitional Provisions) Act 2016 to change terminology to be consistent with the PGPA Act
such as item 20 substituting in subitem 3(1) of Schedule 2 of the Act the
words ‘report under’ with ‘report referred to in’.
Items 36 and 37 propose to repeal and substitute new section 26 and new paragraph
28(2)(d) respectively of the Building and Construction Industry (Improving
Productivity) Act to reference section 29 of the PGPA Act for
disclosure of interests by the Australian Building and Construction Commissioner
or a Deputy Commissioner.
Item 57 proposes
the repeal and substitution of a new section 39 of the Clean Energy Finance
Corporation Act to reference section 29 of the PGPA Act
for disclosure of interests by the CEO of the Corporation.
Items 70, 72, 73, 74, 75 and 79 amend the Competition and Consumer Act to align the provisions with section 29
of the PGPA Act.
46
Annual report for Commonwealth entities
(1) After
the end of each reporting period for a Commonwealth entity, the accountable
authority of the entity must prepare and give an annual report to the entity’s
responsible Minister, for presentation to the Parliament, on the entity’s
activities during the period.
Note:
A Commonwealth entity’s annual report must include the entity’s annual
performance statements and annual financial statements (see
paragraph 39(1)(b) and subsection 43(4)).
(2) The annual
report must be given to the responsible Minister by:
(a) the 15th
day of the fourth month after the end of the reporting period for the entity;
or
(b) the
end of any further period granted under subsection 34C(5) of the Acts Interpretation
Act 1901.
(3) The annual
report must comply with any requirements prescribed by the rules.
(4)
Before rules are made for the purposes of subsection (3), the rules
must be approved on behalf of the Parliament by the Joint Committee of Public
Accounts and Audit.
Item 4 proposes to repeal Division 5 of Part 16 of
the Anti-Money Laundering and Counter-Terrorism Financing
Act which relates to reports
and information such as annual reporting. The Division
is redundant as reporting requirements are set out in section 46 of the PGPA
Act.
Items 16, 17, 18 and 19 propose to amend section 70
of the Australian Renewable Energy Agency Act to reference section 46 of the PGPA Act and substitute the term ‘periods’ for ‘years’ for consistent terminology
with the PGPA Act.
Items 28 to 35 propose to amend the Building and
Construction Industry (Improving Productivity) Act (the Act) to align
reporting requirements and terminology with the PGPA Act. Item
28 clarifies that the Commissioner has to provide a quarterly report under
subsection 20(1A) of the Act. The quarterly reports are separate from the
annual report. Item 29 repeals subsection 20(1) of the Act relating to annual reporting
requirements and item 30 amends subsection 20(2) to provide for annual reports to be
prepared and provided under section 46 of the PGPA Act.
Items 64, 65 and 66 propose to amend section 74 of the Clean
Energy Finance Corporation Act to reference the annual report prepared under section 46 of the PGPA
Act and omit references to
‘financial year’ and substitute ‘period’ for consistency in terminology with
the PGPA Act.
Items 77, 78, 81 and 82 propose to amend the Competition and Consumer Act in regard
to reporting requirements. Item 77 repeals subsection 29O(1) of the Act
relating to annual reporting requirements of the National Competition Council and item
78 substitutes a proposed
subsection 29O(2) that provides for an annual report to be provided under
section 46 of the PGPA Act.
Item 83 proposes
to amend the Public
Service Act 1999 to separate the reporting
requirements for the State of the Service report from the annual reporting
requirements of the Australian Public Service (APS) Commissioner. Item
83 substitutes a new section 44 which relates to the
requirements for an annual state of the APS report. Section 46 of the PGPA
Act would provide for the annual
report of the APS Commissioner. Items 85 to 87 repeal provisions relating to the
requirements for annual reports from the Merit Protection Commissioner and
secretaries of executive departments. The reporting requirements at section 46
of the PGPA will apply instead.
Other provisions
Schedule 2
to the Bill also proposes amendments to a series of Acts, which are minor,
technical in nature and uncontroversial, such as amendments to align
terminology with the PGPA Act or remove obsolete references. For example
item 50 would amend the note to subsection 22CG(2) of the Classification
(Publications, Films and Computer Games) Act 1995 to omit the words ‘or a Commonwealth authority or agency’ and
substitute ‘or a Commonwealth entity’. Item 88 would amend paragraph
155A(a) of the Tertiary
Education Quality and Standards Agency Act 2011
to omit an obsolete reference to the FMA Act and substitute a reference to the PGPA Act.
Schedule 3—Amendments consequential to the sale of Medibank Private
Schedule 3 proposes amendments to three Acts
consequential to the sale of Medibank Private and its subsidiary Health
Services Australia (HSA) Ltd in 2014. Items 1 to 4 amend the Health Insurance
Commission (Reform and Separation of Functions) Act 1997 to omit
references to the redundant section 45. Section 45 had been repealed by the Medibank Private
Sale Act 2006.
Items 5 to 10 propose amendments to the Privacy Act 1988
to omit references to AGHS[16]
or the ‘nominated AGHS company’. As HSA Ltd had been declared the nominated
AGHS company under section 5 of the Hearing Services
and AGHS Reform Act 1997, but with the sale of Medibank Private it is
no longer appropriate for HSA to be prescribed as the nominated AGHS company.[17]
Item 11 would remove the reference to the Managing Director of HSA Ltd
from subsection 3(1) of the Remuneration
Tribunal Act 1973. With the sale of Medibank and its subsidiary HSA Ltd
the reference to the Managing Director is no longer appropriate.
Schedule 4—Transitional
and application provisions
Schedule 4 sets out transitional provisions for entities
and persons affected by the changes set out in the Bill.
Item 1 provides that the amendments in Schedule 2
that relate to annual reporting apply in relation to reporting periods that
commence on or after 1 July 2016.
Item 2 provides that a person who had already
disclosed interests under the requirements of an existing Act before the
changes set out in Schedule 2 come into force, is deemed to have made the
disclosure in accordance with section 29 of the PGPA Act.
Item 3 relates to instruments made under Acts
proposed to be amended by Schedule 2, providing that an instrument (whether or
not a legislative instrument) made under a provision that is amended, or
repealed and substituted, under Schedule 2 to the Bill, which is in force
immediately before the Bill commences will continue in force, provided that the
new provision still allows the making of such an instrument. Item 3 also
provides that an instrument made under a provision that is repealed and
substituted by Schedule 2 will, after the Bill commences, be taken to have been
made under the new provision.
Section 12 of the Legislation Act
2003 sets out when legislative instruments commence. Subsection 12(2)
provides that a provision of a legislative instrument does not apply to a
person (other than the Commonwealth or a Commonwealth authority) if the
provision commences before the day the instrument is registered on the Federal
Register of Legislation, to the extent that it would affect the person’s rights
so as to disadvantage them or impose liabilities on them. Subject to this
limitation, subsection 12(3) provides that a legislative instrument can provide
that a provision commences prior to its registration. Item 4 of Schedule
4 provides that subsections 12(2) and (3) of the Legislation Act do
not prevent a legislative instrument that amends another legislative instrument
made under the same Act, where the amendment is consequential on the Bill, from
taking effect prior to the amending instrument’s registration. That is, the
instrument will have retrospective effect on a person whether or not it
disadvantages or imposes liability on them. As discussed above, the Senate
Standing Committee for the Scrutiny of Bills has expressed concern with this
provision and sought further details from the Minister.[18]
Item 5 provides for the making of rules required or
permitted by the Bill.
[1]. For
further detail about the passage of this legislation, see: Parliament of
Australia, ‘Public Governance, Performance and Accountability (Consequential and
Transitional Provisions) Bill 2014 homepage’,
Australian Parliament website; and Parliament of Australia, ‘Public Governance and Resources Legislation Amendment Bill (No.
1) 2015 homepage’, Australian Parliament website.
[2]. See
Department of Finance (DoF), ‘Public Management
Reform Agenda (PMRA)’, DoF website.
[3]. Explanatory
Memorandum, Public Governance and Resources Legislation Amendment Bill (No.
1) 2017, pp. 5–6.
[4]. Senate
Standing Committee for the Selection of Bills, Report,
8, 2017, The Senate, Canberra, 9 August 2017.
[5]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, The Senate, Canberra, 9 August 2017, p. 18. See also: Legislation Act
2003.
[6]. Ibid.,
pp. 18–19.
[7]. Explanatory
Memorandum, op. cit., pp. 5–6.
[8]. Ibid.,
p. 7.
[9]. The
Statement of Compatibility with Human Rights can be found at page 21 of the
Explanatory Memorandum to the Bill.
[10]. Parliamentary
Joint Committee on Human Rights, Report,
7, 2017, The Senate, Canberra, 8 August 2017, p. 36.
[11]. Public Governance,
Performance and Accountability Rule 2014, Schedule 1, item 3 and item 14.
Upon passage of the Bill, the Rule would be amended to remove the listing of
the two entities.
[12]. Explanatory
Memorandum, op. cit., p. 9.
[13]. Public Governance,
Performance and Accountability Act 2013 (PGPA Act), Part 2-2.
[14]. PGPA
Act, subsection 13(5).
[15]. PGPA
Act, sections 25 to 29.
[16]. AGHS
stands for the Australian Government Health Service.
[17]. Explanatory
Memorandum, op. cit., p. 18.
[18]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 8, 2017, op. cit., pp. 18–19.
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