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Financial Framework Legislation Amendment Bill (No. 2) 2013

Introduced into the House of Representatives on 13 March 2013
Portfolio: Finance and Deregulation

Summary of committee view

1.1        The committee requires further information on the purpose and effect of the amendments relating to recoverable payments and the exclusion of the right of review in relation to social security payments before it can form a view on the compatibility of the bill with the right to social security.

Overview

1.2        This bill seeks to amend a number of Acts as follows:

• amends the Financial Management and Accountability Act 1997 (FMA Act) to allow the Commonwealth to form or participate in the formation of companies, and contains transitional provisions in relation to existing Commonwealth companies and to validate the Commonwealth's role in forming or acquiring shares in existing Commonwealth companies. This follows from the High Court's decision in Williams v Commonwealth [2012] HCA 23 which considered the limits of the Commonwealth's executive government. The explanatory memorandum states that the proposed amendments 'are designed to put beyond any argument the capacity of the Executive Government to form or participate in the formation of companies';[1]
• amends the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) to include decisions made under the proposed amendment to the FMA Act in the relevant schedule of decisions not subject to review under that Act given the policy nature of such decisions; and
• amends the Social Security Act 1991 (in relation to payments made under the Australian Government Disaster Recovery Payments scheme), the Judges’ Pensions Act 1968 and the Remuneration Tribunal Act 1973 to establish a 'recoverable payments' framework for dealing with administrative overpayments, and to address instances where the relevant agency makes payments that are not, in practice, consistent with the requirements or pre-conditions imposed by legislation.
• transfers realised capital losses from the Military Superannuation and Benefits Fund (MSBF) to the ARIA Investments Trust, following the transfer of assets that occurred in May 2012. This is to ensure that losses do not remain with the MSBF when they cannot be used to offset future capital gains of the Fund as all of the Fund's assets have been transferred to the ARIA Investments Trust.

Compatibility with human rights

1.3        The bill is accompanied by a statement of compatibility that forms part of the explanatory memorandum that states that the proposed amendments 'do not limit any human rights, nor propose any offences or penalties' and the bill is therefore compatible with human rights.

1.4        The explanatory memorandum gives some more explanation of the provisions that exclude review rights under the ADJR Act. It explains that exempt from review are decisions made by the Commonwealth how to form or participate in forming companies. These 'would be policy decisions regarding how the Commonwealth organises its bodies and governance arrangements'. As such, these decisions would be 'administrative in nature and would not impact upon the interests of an individual'.[2] In light of this explanation in the explanatory memorandum the committee makes no comment on the provisions that exempt review under the ADJR Act.

Right to social security

1.5        A number of amendments in the bill provide that where a benefit was mistakenly paid or paid to someone who had died prior to the payment being made, those benefits become a debt due to the Commonwealth that may be recovered in a court of competent jurisdiction. These amendments may engage article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) which recognises the right to social security.

1.6        In particular, benefits paid under the Social Security Act 1991 would appear to fall within the term 'social security' under article 9 of the ICESCR. The UN Committee on Economic, Social and Cultural Rights has stated that this term covers the risks involved in the loss of a means of subsistence for reasons beyond a person's control and encompasses the right to access and maintain benefits, whether in cash or in kind in order to secure protection from (a) lack of work-related income, (b) unaffordable healthcare, or (c) insufficient family support.[3]

1.7        The bill provides that in relation to decisions made under the amendments relating to recoverable payments, these decisions are not reviewable under Part 4 of the Social Security (Administration) Act 1999.[4] Part 4 of that Act provides for internal review and review by the Social Security Appeals Tribunal or the Administrative Appeals Tribunal. No explanation is given as to why it is necessary to remove this right of review.

1.8        The UN Committee on Economic, Social and Cultural Rights has noted that remedies should be made available for alleged violations of economic, social or cultural rights. While these may be judicial or administrative,[5] as a matter of principle, effective remedies of an appropriate sort must be provided:

The Covenant contains no direct counterpart to article 2.3(b) of the International Covenant on Civil and Political Rights which obligates States parties to, inter alia, ‘develop the possibilities of judicial remedy’. Nevertheless, a State party seeking to justify its failure to provide any domestic legal remedies for violations of economic, social and cultural rights would need to show either that such remedies are not ‘appropriate means’ within the terms of article 2.1 of the Covenant or that, in view of the other means used, they are unnecessary. It will be difficult to show this and the Committee considers that, in many cases, the other “means” used could be rendered ineffective if they are not reinforced or complemented by judicial remedies.[6]

1.9        Removing the right to review under the Social Security (Administration) Act 1999 in relation to these new provisions also engages the right to a fair hearing under article 14(1) of the International Covenant on Civil and Political Rights (ICCPR). Decisions about social security benefits have been found to come within the definition of 'rights and obligations' under article 14(1) of the ICCPR and therefore any restriction on the right to review should be justified. The restriction may also be inconsistent with the right of a person to an appropriate administrative or judicial remedy in relation to alleged violations of economic rights such as the right to social security guaranteed by article 9 of the ICESCR.

1.10             The committee requires further information on the purpose and effect of the amendments relating to recoverable payments and the exclusion of the right of review in relation to social security payments before it can form a view on the compatibility of the bill with the right to social security. The committee intends to write to the Minister for Finance and Deregulation to ask for clarification.             

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