Parliamentary scrutiny of the Regional Broadband Scheme and overall
This final chapter comments on certain issues related to the delegation
of legislative power and parliamentary scrutiny of decisions that could be made
as part of the proposed Regional Broadband Scheme (RBS). The committee's
overall conclusions on the bills can be found at the end of the chapter.
Delegation of legislative powers and adequacy of processes for facilitating
As noted in Chapter 1, the Senate Standing Committee for the Scrutiny of
Bills (Scrutiny Committee) commented on the bills in its Scrutiny Digest No.
8 of 2017. Following publication of its Scrutiny Digest, that committee sought
and received advice from the Minister regarding various aspects of schedule 4
to the CC Bill and the RBS Bill. Specifically, the Scrutiny Committee
strict liability offences for failure to lodge certain reports to
the Australian Communications and Media Authority (ACMA) and the Australian
Competition and Consumer Commission (ACCC);
the ability for the Minister to make determinations amending the
default rate of the RBS charge and affecting the meaning of certain terms;
modified disallowance procedures relating to the determinations
referred to above; and
proposed sections 102Z and 102ZA of the Telecommunications
(Consumer Protection and Service Standards) Act 1999 (TCPSS Act),
which would enable the ACCC and the ACMA to declare, by notifiable instrument,
that a specified Commonwealth, state and territory department or authority is a
'authorised government agency', for the purposes of disclosing certain information
collected as part of the RBS regime.
The committee's comments in this chapter are limited to the issues
related to whether the bills would inappropriately delegate legislative powers
or insufficiently subject the exercise of legislative power to parliamentary
scrutiny. Regarding the remaining matter highlighted by the Scrutiny Committee about
the strict liability offences, the committee notes that the Scrutiny Committee
has sought and received advice from the Minister about the proposed imposition
of strict liability for these particular offences. The committee will leave
further consideration of this matter to the usual Scrutiny Committee process.
Overview of the proposed ministerial
powers regarding the RBS charge and modified disallowance procedures
3.4 As noted in Chapter 1, although specific base component and
administrative cost amounts for the RBS charge are set in the bill (totalling
$7.10 for the first year) and indexed, the bill proposes that the Minister
would have the power, by legislative instrument, to change the base component
and the administrative cost amount following receipt of advice from the ACCC. This
discretion is limited by clause 17A of the RBS Bill, which provides that the
sum of the base component and administrative cost amount cannot exceed $10
(for the first financial year, and indexed to the consumer price index
thereafter). Essentially, this would enable the Minister, rather than the Parliament,
to set the rate of the RBS charge up to a capped amount.
3.5 It is also proposed in the CC Bill that the Minister may, by legislative
instrument, determine that one or more classes of carriage service is to be
excluded from the definition of designated broadband service under paragraph
The explanatory memorandum (EM) states that this power is 'intended to give the
Minister flexibility to alter the definition to ensure it continues to apply
only to broadband services as technological changes arise'.
3.6 Proposed section 79A further provides that the Minister may, by
legislative instrument, determine that a location is taken, or not taken, to be
'premises', for the purpose of the RBS.
In the following paragraphs, the determinations outlined in paragraphs 3.4
to and 3.6 are referred to collectively as the 'RBS determinations'.
The ordinary procedure for the Senate or House of Representatives to
disallow a legislative instrument is contained in section 42 of the Legislation
Act 2003. However, the bills seek to exempt the RBS determinations from the
provisions of section 42 of the Legislation Act and to establish a modified disallowance
Under the procedure for disallowance established in the Legislation Act,
either the Senate or the House of Representatives may disallow a legislative
instrument if, within 15 sitting days after the instrument is tabled, a senator
or member of the House of Representatives gives notice of a motion to disallow
the instrument (in whole or in part) and, within 15 sitting days
after the giving of that notice:
the motion is agreed to by the Senate or House of
the notice of motion to disallow the instrument has not been
resolved or withdrawn (in which case the instrument is deemed to have been
The proposed modified disallowance procedure reflects the Legislation
Act procedure in relation to the period permitted for a notice of motion to be
given to disallow the legislative instrument and the period by which the House
must pass a resolution to disallow the instrument.
However, the proposed disallowance procedure differs from the Legislation
Act procedure in the following two ways:
Ordinarily, legislative instruments commence at the start of the
day after the day the instrument is registered or, if the instrument provides
otherwise, that day.
The instrument would cease to have effect if it is disallowed in accordance
with section 42 of the Legislation Act. The procedure outlined in the bills
differs in that the Minister's RBS determinations would not come into effect
until the day after the period by which either House could have disallowed the
The bills do not provide for an RBS determination to have been
disallowed if a notice of motion to disallow the instrument has been given but
has not been resolved or withdrawn. Therefore, under the procedure proposed in
the bills, disallowance of an RBS determination could only occur if the Senate
or the House of Representatives pass a resolution disallowing the determination
within the 15 sitting day disallowance period.
The proposed amendments discussed above present two key issues. The
first is whether it is appropriate to delegate the Parliament's function to set
the rate of the RBS charge. The second related issue is whether the proposed
disallowance process for determinations made by the Minister is adequate to
enable effective parliamentary scrutiny.
In commenting on the proposed power for the Minister to amend the RBS
charge, the Scrutiny Committee emphasised that the levying of taxation is 'one
of the most fundamental functions of the Parliament'. The Scrutiny Committee
added that the 'committee's consistent scrutiny view is that it is for the
Parliament, rather than makers of delegated legislation, to set a rate of tax'.
Although the Scrutiny Committee welcomed that the Minister's ability to
alter the rate of the charge is subject to the $10 cap, that committee
nevertheless described the proposed arrangement as 'a significant delegation of
the Parliament's legislative powers'. To address its concerns, the Scrutiny
Committee concluded that 'it may be appropriate for the bill to be amended to
further increase parliamentary oversight by requiring the positive approval of
each House of the Parliament before a new determination...comes into effect'.
That is, rather than relying on a disallowance process, each House of the
Parliament would have to approve any determination before it could take effect.
The Scrutiny Committee referred to section 10B of the Health Insurance Act
1973 as an example of such a requirement.
The Scrutiny Committee also commented on the proposed disallowance
process contained in the bills that would apply to RBS determinations.
The Scrutiny Committee welcomed the proposal that, unlike other
legislative instruments, the determinations would not come into effect until 15
sitting days after the disallowance period has expired. The Scrutiny Committee
observed that this aspect 'improves parliamentary oversight of these
However, the Scrutiny Committee expressed concern that, unlike the usual
disallowance procedure, the bill would provide that disallowance could only
occur following a positive determination by a House to disallow the
instrument. That is, unlike legislative instruments subject to the disallowance
process outlined in the Legislation Act, if a notice of motion to disallow an
RBS determination has been given which has not been withdrawn, and the motion
either has not been called on or has been called on and moved but not disposed
of, the RBS determination would come into effect.
The Scrutiny Committee provided the following observations about the
benefits for parliamentary scrutiny associated with the ordinary process:
Normally, subsection 42(2) of the Legislation Act 2003
provides that where a motion to disallow an instrument is unresolved at the end
of the disallowance period, the instrument (or relevant provision(s) of the
instrument) are taken to have been disallowed and therefore cease to have
effect at that time. Odgers' Australian Senate Practice notes that the purpose
of this provision is to ensure that 'once notice of a disallowance motion has
been given, it must be dealt with in some way, and the instrument under
challenge cannot be allowed to continue in force simply because a motion has
not been resolved.' Odgers' further notes that this provision 'greatly
strengthens the Senate in its oversight of delegated legislation'.
The Scrutiny Committee outlined its concerns about the absence of this
provision for the RBS determinations as follows:
In practice, as the executive has considerable control over
the conduct of business in the Senate, there may be occasions where no time is
made available to consider the disallowance motion within 15 sitting days after
the motion is lodged and therefore the instrument would be able to take effect
regardless of the attempt to disallow it. As a result, the proposed procedure
would undermine the Senate's oversight of delegated legislation in cases where
time is not made available to consider the motion within the 15 sitting days.
The explanatory memorandum provides no justification for this proposed reversal
of the usual disallowance procedures in subsection 42(2) of the Legislation
The Scrutiny Committee described the divergence from the usual
disallowance process as having a 'significant practical impact' on
parliamentary scrutiny of the RBS determinations. Accordingly, the Scrutiny
Committee requested that the Minister provide detailed justification for the
modified disallowance procedure.
In his response to the Scrutiny Committee, the Minister emphasised that,
under the modified disallowance procedure proposed in the bills, an RBS
determination would only commence and take effect 'once the disallowance period
has passed and the Parliament has had sufficient time to scrutinise the
determination'. Accordingly, the Minister argued that the modified disallowance
procedure proposed in the bills 'provides greater Parliamentary scrutiny over
any such Ministerial determination than would be available under the usual
The Minister's response commented on the Scrutiny Committee's suggestion
for positive approval of each House of Parliament to be required before any
proposed change to the RBS charge could would take effect. However, the
Minister's response did not directly address the Scrutiny Committee's
underlying concern regarding the absence of a procedure for disallowance when a
motion to disallow an instrument is unresolved at the end of the disallowance
The delegation of power to the executive to make legislative instruments
to support primary legislation is a standard feature of bills examined by this
committee. It is often desirable for practical reasons that various matters,
particularly the details of a legislative regime, are left to legislative
instruments. The committee, however, will not support inappropriate delegations
of legislative power. The committee will also seek to ensure that powers to
make legislative instruments are subject to appropriate scrutiny by the Senate.
In relation to the proposed ability for the Minister to amend the RBS
charge, the committee notes that, importantly, the Minister's ability to do
this is constrained by a cap. The RBS Bill proposes that the RBS would total
$7.10 in the first year of operation and, although the Minister could amend
this, the substitute amount specified by the Minister cannot exceed $10
(indexed annually). The Minister's determination would also be subject to
disallowance by the Parliament before coming into effect.
As a general principle, the committee considers that primary legislation
should determine rates of taxation. Given the RBS charge applies to a complex
and rapidly changing industry, however, there is merit in providing the
Minister with the ability to adjust the charge. Due to the safeguards provided
by the combined component cap and the requirement for the Minister to have
regard to advice from the ACCC, the committee is not concerned by the concept
of delegating to the Minister a limited power to adjust the RBS as is proposed
in the RBS Bill. The committee's conclusion, however, relies on the
establishment of a suitable disallowance process for determinations made by the
Minister. While flexibility to respond to rapid change is important, this must
not outweigh appropriate parliamentary scrutiny of ministers' decision-making.
The committee has carefully considered the proposed disallowance process
outlined in the bills. The bills propose that the Minister's determinations in
relation to changes to the components of the RBS charge and to exclude classes
of carriage services from the definition of designated broadband service would
not take effect until after the period allocated for disallowance has expired.
The committee welcomes this approach. As the government is proposing that the
Parliament delegate to the executive aspects of its function to levy taxation,
it is appropriate that enhanced arrangements for parliamentary scrutiny of the
Minister's determination apply.
However, the committee is concerned about the proposal to exempt the
determinations from the usual disallowance procedure established by subsection
42(2) of the Legislation Act. Subsection 42(2) provides that, where a motion to
disallow an instrument is not resolved by the end of the disallowance period,
the instrument is taken to have been disallowed. The committee sees no reason
to diverge from this practice. Indeed, the committee views this practice as an
important safeguard for ensuring parliamentary scrutiny of delegated legislation.
The committee supports the comments made by the Scrutiny Committee
and recommends that the bills be amended to provide that the RBS determinations
will not come into effect if a motion to disallow is unresolved at the end of
the disallowance period.
The committee recommends that the proposed disallowance procedure in
clause 19 of the Telecommunications (Regional Broadband Scheme) Charge Bill
2017 and proposed section 102ZFB of the Telecommunications (Consumer
Protection and Service Standards) Act 1999 be amended to provide that a
determination is deemed to have been disallowed if:
notice of a motion to disallow the determination is given in a
House of the Parliament within 15 sitting days of that House after the copy of
the determination was tabled in the House under section 38 of the Legislation
Act 2003; and
at the end of 15 sitting days of that House after the giving of
that notice of motion:
the notice has not been withdrawn and the motion has not been
called on, or
the motion has been called on, moved and (where relevant)
seconded and has not been withdrawn or otherwise disposed of.
Use of notifiable instruments to specify
an 'authorised government agency'
Proposed new section 102Z of the TCPSS Act
would provide the ACMA with the power to disclose certain information obtained
in relation to the RBS to several specified departments and agencies.
The entities specified in the CC Bill are the Department of Communications and
the Arts, the ACCC, the Regional Telecommunications Independent Review
Committee, the Department of Finance, the Treasury and any 'authorised
government agency'. Proposed new section 102ZA mirrors new section 102Z, but
would apply to the ACCC instead of the ACMA.
Whether an agency is an 'authorised government agency' would be
determined by the ACMA (or ACCC, as applicable). That is, proposed new sections
102Z and 102ZA would enable the ACMA and ACCC to declare, by notifiable
instrument, that any specified department or authority of the Commonwealth, a
state or a territory is an authorised government agency.
Notifiable instruments are a relatively new category of instruments.
They were introduced in March 2016 following the commencement of the Acts
and Instruments (Framework Reform) Act 2015. The EM for the Framework
Reform Act provides the following explanation of notifiable instruments:
Notifiable instruments will not be legislative in character,
and as such they will not be made subject to parliamentary scrutiny or
The new category of notifiable instruments is designed to
cover instruments that are not appropriate to register as legislative
instruments, but for which public accessibility and centralised management is
desirable. Instruments may become notifiable instruments by being registered,
by being prescribed by regulation under the Legislation Act, or by being
declared as notifiable instruments in the enabling legislation. Registration
will satisfy any existing publication requirements for the instrument (for
The Scrutiny Committee commented on the proposal for the ACCC and the
ACMA to use notifiable instruments to add departments and agencies to the list
of bodies to which the ACCC and the ACMA may disclose information. The Scrutiny
Committee made the following observations:
Given that these declarations will allow the ACMA and ACCC to
disclose information to further bodies not specified on the face of the primary
legislation, it is not clear to the committee why these declarations are to be
notifiable instruments (which are not subject to parliamentary disallowance),
rather than legislative instruments.
The Scrutiny Committee sought advice from the Minister as to why the
declarations are to be notifiable, rather than legislative, instruments.
In his response, the Minister emphasised that the proposed power would
be constrained in two ways:
first, by the requirement that the information must have been
obtained under, or for the purposes of proposed division 8 or as part of the
reporting obligations in proposed section 100; and
secondly, by the requirement that the ACCC/ACMA be satisfied that
the information will enable or assist the entity to which disclosure is
proposed to be made to perform or exercise any of that entity's functions or
The Minister added that the class of persons to whom the ACCC or the
ACMA may specify may receive information is constrained to government
departments and agencies, which the Minister considers 'provides further
protection and justification for the notifiable instrument form'. Furthermore,
the Minister expects that declarations would only be made in 'exceptional cases'.
The committee notes the Scrutiny Committee's comments in its Scrutiny
Digest No. 8 of 2017 regarding the proposal that declarations by the ACCC
and the ACMA of an 'authorised government agency' for the purposes of proposed
new sections 102Z and 102ZA of the TCPSS Act are to be notifiable instruments.
Following the response from the Minister, the Scrutiny Committee's preliminary comments
included a request that the key information provided by the Minister be
included in the explanatory memorandum. The Scrutiny Committee noted the
importance of the explanatory memorandum as part of access to understanding the
law and if needed as intrinsic material to assist with interpretation.
The committee supports the request of the Scrutiny Committee to include
information in the explanatory memorandum.
This report has focused on the evidence received from industry
stakeholders, as these stakeholders provided detailed comments on the specific
provisions of the bills. However, the committee considers it is important to highlight
that the bills received strong support from organisations representing consumers.
It is clear from the evidence provided by these organisations that the proposed
measures would be of significant benefit to consumers overall. The committee
was mindful of these benefits when examining the details of the bills and the
evidence received from industry.
The committee considers that the bills contain three important and
related measures that will improve the broadband regulatory framework. Although
the committee has made a recommendation intended to enhance the processes for
ensuring decisions made as part of the RBS will be subject to adequate
parliamentary scrutiny, the committee supports the bills and commends the
government for continuing to pursue major reforms of communications regulation.
After due consideration of recommendation 1, the committee recommends
that the bills be passed.
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