CHAPTER 3

Other government compensation mechanisms

3.1        In addition to consideration of state schemes relating to children in care, the terms of reference required the committee to consider the administration and effectiveness of other mechanisms that enable governments to make discretionary payments or to waive the payment of debts, including:

(a)         act of grace and ex gratia payments;

(b)        waiver of debt schemes; and

(c)         the Commonwealth Scheme for Compensation for Detriment caused by Defective Administration.

3.2        This chapter will examine those other compensation mechanisms.

Act of grace and ex gratia payments

Act of grace payments

3.3        At the Commonwealth level, act of grace payments are made pursuant to subsection 33(1) of the Financial Management and Accountability Act 1997 (FMA Act). Under subsection 33(1) of the FMA Act, the Finance Minister (or his delegate) may authorise a payment if he considers it appropriate to do so because of special circumstances, even though the payment would not otherwise be authorised by law or required to meet a legal liability.[1]

3.4        The FMA Act does not define what constitutes 'special circumstances'. However, the Department of Finance and Deregulation has advised that an act of grace payment may be appropriate in relation to special circumstances that have occurred as a direct result of:

(a)         the involvement of a government agency, where that involvement caused an unintended and inequitable outcome for the applicant; or

(b)        the application of legislation or policy, which has resulted in an unintended, inequitable or anomalous effect on the applicant's particular circumstances.[2]

3.5        An act of grace payment may also be appropriate where a matter is not yet covered by legislation or a specific policy, but the Australian Government intends to introduce such legislation or policy, and it is considered desirable in a particular case to apply the benefits of the relevant policy prospectively.[3]

3.6        There is no time limit within which an application for an act of grace payment must be lodged and there is no financial ceiling on the amount of such payments.[4] However, if a proposed payment is likely to involve more than $250,000, the Finance Minister must request a report from an advisory committee consisting of the chief executives of the Department of Finance and Deregulation, the Australian Customs and Border Protection Service and the agency responsible for the matter to which the payment relates. In these circumstances, the Finance Minister cannot authorise an act of grace payment without considering the report of the advisory committee.[5]

3.7        In its submission to this inquiry, the Department of Finance and Deregulation (Department) noted that, in 2008‑09, act of grace payments totalling $3.2 million were approved.[6] In 2009‑10, payments totalling just under $1 million were approved.[7] The variability of the payments in each year is evident in information the Department tabled at the Canberra public hearing:

Table 1. Act of grace payments[8]

3.8        The submission from the Department provided the following example of an act of grace payment made under the FMA Act:

A Disability Support Pensioner (Blind) enrolled in a university course which required the student to undertake a full year of study overseas.

People who are permanently blind do not have to satisfy the work test applied to most Centrelink benefits for people of workforce age. They are still subject, however, to the pension portability provisions, and lose the pension if they leave Australia for longer than 13 weeks, except for an emergency. Being absent from Australia for study, rather than due to an emergency, the student lost Centrelink benefits and was forced to incur travel costs for trips back to Australia, and requested reimbursement amounting to over $5,000.

It was considered that the failure to provide for extended portability of Disability Support Pension where the person is required to study overseas as part of an approved study course was not consistent with the Government's purpose of encouraging people with disabilities to study and participate in the workforce to the best of their ability. An act of grace payment was approved on this basis, and the apparent anomaly was brought to the attention of the Minister for Families, Housing, Community Services and Indigenous Affairs, for possible legislative change.[9]

3.9        In addition to the general provisions in the FMA Act, there is specific Commonwealth legislation which enabled one‑off compensation payments of $25,000 to be made to veterans and civilians who were interned by Japanese armed forces during World War II.[10]

Ex gratia payments

3.10      In addition to the statutory power to make act of grace payments, the Commonwealth has an executive power to make ex gratia payments.[11] In 2004, the Australian National Audit Office (ANAO) reported on a cross‑agency audit regarding compensation payments and debt relief in special circumstances (the ANAO report).[12] The ANAO report explained the difference between ex gratia payments and act of grace payments by the Commonwealth:

Ex gratia payments are discretionary payments by the Commonwealth to a group of people who may have suffered a financial, or non-financial, loss. This contrasts with act of grace payments that tend to be based on an individual claim and paid to an individual. Ex gratia payments are based on the inherent Constitutional power of the Government to redress the effects of particular negative circumstances. Ex gratia programs are approved by the Prime Minister and/or Cabinet and administered by relevant agencies.[13]

3.11      The ANAO report further explained:

Ex gratia payments are made, usually, to restore equity to a group of persons, irrespective of whether the Commonwealth has any direct moral responsibility for the losses the group has sustained. (The provision of relief for the effects of flood and drought are examples of this type of assistance.) On the other hand, act of grace payments are made, usually, to effectively compensate individuals, in special circumstances, where the decision‑maker determines that the Commonwealth has a direct moral responsibility to provide recompense.[14]

3.12      The payments made to persons affected by the Bali bombing in October 2002 are an example of ex gratia payments made by the Commonwealth.[15] As an officer from the Department of Finance and Deregulation explained to the committee at the Canberra public hearing:

Ex gratia and act of grace are different mechanisms. Ex gratia is rooted in the Constitution in the executive power section 61. It is a decision that can be taken by the Prime Minister and/or cabinet in relation to events which are urgent or unforeseen. For example, after the Bali bombings the government immediately undertook decisions in relation to an ex-gratia scheme so that families with either dead or injured members could travel to Bali to be with them to deal with that situation...The responsibility for the policy for that mechanism rests with [the] Department of the Prime Minister and Cabinet...

As to the decision-making processes, when that occurs, the relevant portfolio minister advises the Prime Minister and informs the finance minister, because financial matters are involved, and a decision is taken on that basis...Centrelink is responsible for administering those arrangements and how those payments are made.[16]

3.13      The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) gave further examples of circumstances in which the Commonwealth has made ex gratia payments:

In recent years, FaHCSIA has provided assistance through the ex gratia mechanism in response to a number of disasters including the Victorian Bushfires, Samoan Tsunami, Sumatran Earthquake, Mumbai Terrorist Attacks and North Queensland Floods. Assistance has included $5,000 Funeral Memorial Assistance, the Newstart‑style Income Recovery Subsidy and other tailored assistance measures.[17]

3.14      Some states, along with the territories, have specific legislation providing for act of grace or ex gratia payments,[18] while other states simply rely on the inherent executive power to make such discretionary payments.[19]

Settlement of claims for compensation

3.15      It is important to note the difference between act of grace or ex gratia payments and payments made to settle legal claims for compensation. The Legal Service Directions 2005 apply where a legal claim for monetary compensation is made against the Commonwealth.[20] The Legal Service Directions 2005 require that such claims may only be settled where there is at least a meaningful prospect of liability being established.[21] This contrasts with ex gratia and act of grace payments which are made despite there being no legal liability to make the payment.

3.16      Examples of payments made by the Commonwealth to settle claims for compensation include:

(a)         the payment of $2.6 million to Ms Cornelia Rau in relation to her unlawful detention; and

(b)         the reported payment of $4.5 million to Ms Vivian Solon with respect to her unlawful deportation.[22]

Waiver of debt schemes

3.17      Under subsection 34(1) of the FMA Act, the Finance Minister (or his delegate) has various powers in relation to amounts owing to the Commonwealth including the power to waive the Commonwealth's right to payment.[23]

3.18      Once a debt is waived it is no longer recoverable at law.[24] The Department of Finance and Deregulation (Department) has advised that it may be appropriate to exercise the power to waive payment of a debt where the debt arises as a direct result of:

(a)         the involvement of a government agency (in cases where the debt should not have arisen); or

(b)         the application of legislation in cases where repayment would be inequitable in the circumstances, or cause severe ongoing financial hardship.[25]

3.19      There is no time limit within which an application for waiver of a debt under the FMA Act must be lodged and there is no financial ceiling on the amount which may be waived.[26] As is the case with act of grace payments, if a proposed waiver is likely to involve more than $250,000, the Finance Minister must request and consider a report from an advisory committee before he can authorise waiver of the debt.[27]

3.20      The Department advised the committee that, in both 2008‑09 and 2009‑10, debts totalling approximately $3 million were waived under the FMA Act.[28] Debts waived between 2000 and 2010 are set out in the table below:

Table 2. Waiver of debt payments[29]

3.21      The Department also outlined that a number of agencies have limited waiver powers 'which relate to specific and easily definable circumstances of limited complexity and predominantly involving routine administration, under specific legislation'. These include:

-    the Income Tax Assessment Act 1936 gives the Commissioner of Taxation limited powers to remit personal income tax debts, certain other associated debts and General Interest Charges;

-    the Social Security Act 1991 gives a limited power to waive a debt if the money had been received in good faith, if the money was paid because of an administrative error, if the debt had existed for a period longer than six weeks and if the person is in financial hardship; and

-    the Child Support (Registration and Collection) Act 1988 gives the CSA a limited power to remit late payment penalties.[30]

3.22      In its submission, the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) advised that the administration of debts incurred under social security law and family assistance law is undertaken by Centrelink on behalf of the secretaries of FaHCSIA and the Department of Education, Employment and Workplace Relations. These may include situations where:

• debts may be written-off temporarily for periods of time to allow for customer circumstance to improve prior to debt recovery, or where it is not cost effective for the Commonwealth to recover the debt;
• debts may be waived where they are attributable solely to an administrative error made by the Commonwealth and the debtor received the payment(s) in good faith; and
• debts may be waived under special circumstances.[31]

3.23      The Australian Capital Territory and the Northern Territory have equivalent statutory provisions to subsection 34(1) of the FMA Act which enable the treasurer to waive the repayment of debts.[32] The statutory provisions in Queensland, Victoria, Tasmania and Western Australia refer only to the power to write off debts or losses and not the power to waive repayment.[33] In New South Wales and South Australia, the treasurer has issued instructions in relation to the exercise of the executive power to waive a debt.[34]

Criticism of debt waiver schemes

3.24      The committee received evidence during the course of its inquiry that raised concerns about debt waiver schemes. For example, the Welfare Rights Centre viewed the current debt waiver provisions in social security legislation as 'unbalanced and unfair' and, in some cases, leading to 'perverse and unintended onerous outcomes'. It suggested that there had been a tightening of social security legislative provisions, noting that while in the past 'not all overpayments were actually recoverable debts, now regardless of the cause almost all are recoverable debts'.[35] It also highlighted a number of specific waiver of debt provisions which related to situations where Centrelink was the sole or primary cause of a debt or where a person owes a debt 'but they are in that position due to domestic violence or acting under duress, usually from an ex-partner'.[36]

3.25      The Welfare Rights Centre proposed a number of legislative amendments to the Social Security Act 1991 (SSA) and the Family Assistance (Administration) Act 1999 to improve the position of welfare recipients in relation to debt waiver. These amendments included removing the word 'solely' from section 1237A of the SSA, which currently requires a person to prove that their debt was 'solely' caused by administrative error in order to have it waived. The Welfare Rights Centre argued that this provision means that Centrelink can be 99 per cent responsible for a debt but it will not be waived because of a one per cent contributory error of the relevant individual. Similarly, the Welfare Rights Centre proposed an amendment to section 1237AAD of the SSA to make allowance for situations where women have been pressured by an abusive partner to claim a social security payment as a single person or not to declare the correct amounts of their earnings.[37]

3.26      The Welfare Rights Centre also suggested that such an 'unbalanced' position between Centrelink and its clients could encourage poor public administration. Ms Jackie Finlay stated at the public hearing in Sydney:

It seems to us that the risks in receiving payments are borne totally by social security recipients and there is very little risk to Centrelink. Due to the way the legislative provisions are drafted and have been tightened over the years, there is essentially little incentive for Centrelink officers or Centrelink in general to get a decision right and to prevent debts, because ultimately, if someone owes Centrelink money, most of the time they are going to have to pay it back...[38]

3.27      Connecting Home also raised the issue of the visibility of existing debt waiver schemes:

...a cursory desktop review of some government websites revealed a lack of information [on] debt waiving schemes. Some members of the Aboriginal community, for a range of reasons, experience falling into debt with some government departments such as Centrelink and the ATO for example. Often people will attempt to avoid addressing debt, which only exacerbates their situation. This is largely because there is little information about the way government departments can negotiate with the debtor in relation to the amount outstanding.[39]

3.28      FaHCSIA was of the view 'that the current debt waiver provisions provide an appropriate balance between recovering amounts that exceed a person's entitlement and avoiding onerous outcomes for customers'.[40] It advised:

At the beginning of the financial year 2009-10, there were approximately 485,000 debts relating to customers in receipt of FaHCSIA payments. Approximately 975,000 new debts were raised and the balance, at the end of the year, had dropped to approximately 439,000. Of these debts, approximately 40 per cent overall were for amounts of less than $50 and were automatically waived.[41]

3.29      However, FaHCSIA also noted that the National Welfare Rights Network (which includes the Welfare Rights Centre as a member) had provided the Hon. Jenny Macklin MP, the Minister for Families, Housing, Community Services and Indigenous Affairs, with a report entitled Redressing the Balance of Risk and Responsibility Through Active Debt Prevention Strategies. Further, FaHCSIA intends to provide the Minister with advice on 'waiver of debt' provisions. In relation to the specific amendments proposed by the Welfare Rights Centre, FaHCSIA provided short responses outlining the purpose of each section, noting some of these provisions are 'of long standing'.[42]

Compensation for Detriment caused by Defective Administration

3.30      The Scheme for Compensation for Detriment caused by Defective Administration (the CDDA scheme) is a Commonwealth administrative scheme which was introduced in 1995. Under the scheme, each Minister (or officers authorised by a Minister) has a discretionary authority to compensate individuals or other bodies who have suffered detriment due to the 'defective' actions or inactions by an agency within the relevant Minister's portfolio.[43]

3.31      'Defective administration' refers to actions by an agency official such as:

(a)         a specific and unreasonable lapse in complying with existing administrative procedures;

(b)         an unreasonable failure to institute appropriate administrative procedures;

(c)         an unreasonable failure to give proper advice within an official's power and knowledge to give; or

(d)         the provision of advice that was, in all the circumstances, incorrect or ambiguous.[44]

3.32      The 'detriment' to the applicant can relate to a personal injury, an economic loss or damage to property that results from the defective administration.[45] In general terms, the principles applied in assessing the loss to the applicant are equivalent to those which would be applied in assessing damages for the tort of negligence. For example, the loss must have been directly caused by the defective administration and it must have been a reasonably foreseeable consequence of the defective administration.[46] The Department of Finance and Deregulation has advised that offers of compensation under the CDDA scheme:

...should be calculated on the basis of what is fair and reasonable in the circumstances and in consideration of the fact that the Commonwealth should not take advantage of its relative position of strength in an effort to minimise payment.

The overarching principle to be used in determining the level of compensation is to restore the applicant to the position he or she would have been in had defective administration not occurred.[47]

3.33      The CDDA scheme applies where the claimant has no legal or statutory right to compensation but there is a moral obligation to provide compensation.[48] The power to make payments under the CDDA scheme arises from the Commonwealth's executive power under section 61 of the Constitution.[49] There is no time limit within which an application under the scheme must be lodged and no financial ceiling on the amount of compensation which may be paid under the scheme. The scheme only applies to FMA Act agencies, and not to Commonwealth Authorities and Corporations Act 1997 (CAC Act) agencies such as Comcare.[50] A list of agencies and organisations which operate under the FMA Act and the CAC Act is provided at Appendix 2 to this report.

3.34      The Commonwealth Ombudsman's factsheet on the CDDA scheme states that common examples of circumstances in which CDDA payments are made include where:

(a)         a person incurs expenses or loses eligibility for a benefit because of incorrect agency advice;

(b)        a penalty or debt is wrongly imposed;

(c)         personal property is damaged or documents are lost by an agency; or

(d)        a computer error results in a delayed payment or unreasonable delay in approving an application.[51]

3.35      For example, FaHCSIA outlined that, for social security matters, a CDDA claim would normally originate from Centrelink customers, but that Centrelink is also able to instigate own motion payments. Centrelink receives direct funding appropriations for paying compensation claims.[52] In 2008–09, Centrelink made 738 payments totalling $3.15 million under the CDDA scheme. In comparison, the Australian Taxation Office made 250 payments totalling $550,000.[53]

Role of the Commonwealth Ombudsman

3.36      An applicant for compensation under the CDDA scheme may complain to the Commonwealth Ombudsman if the application is refused, or if the applicant rejects an offer as insufficient or subject to unreasonable conditions. The Ombudsman may investigate and, if the Ombudsman considers it appropriate to do so, may propose that the decision of the agency be changed. The Ombudsman does not have the power to overturn or vary the agency's original decision.[54]

3.37      It is also possible for an applicant who is refused an act of grace payment or waiver of a debt to complain to the Ombudsman.[55] However, in the case of decisions under the CDDA scheme, because it is an executive scheme rather than a statutory one, a complaint to the Ombudsman is effectively the only recourse the public has for external review of a decision under the scheme.[56]

3.38      The Ombudsman's office deals with about 200 complaints annually that specifically raise CDDA issues.[57] In 2009, the Ombudsman conducted an own motion investigation of the CDDA scheme. The findings of that investigation are set out in the Putting Things Right report. Those findings included that there was a need for:

(a)         greater visibility of the scheme;

(b)         better assistance to claimants in accessing the scheme and making a claim; and

(c)         less defensive and legalistic approaches to CDDA decision‑making by agencies.[58]

3.39      In evidence to the current inquiry, the Department of Finance and Deregulation noted a number of actions that have been undertaken in response to the Putting things right report recommendations.[59] These include:

The Finance circular entitled Discretionary compensation and waiver of debt mechanisms was reissued in November 2009 to bring greater focus to the requirements of administrative law and to align the commentary on CDDA with lessons learnt from departments and agencies.

Finance established an interagency forum on discretionary compensation mechanisms to share information on best practice in order to encourage a consistent whole-of-government approach to approaching and managing claims...

[A]pplication forms for discretionary assistance are available on the finance website, along with information about the discretionary mechanisms themselves. Australian government agencies can link to [the] finance website for those forms if they wish...

[F]inance has encouraged departments and agencies to provide claimants with a copy of the papers which will be taken into account in making a decision...

In terms of increased visibility of the CDDA scheme, the...ombudsman has published an information sheet that supplements the finance circular and the Attorney-General's Department's administrative justice framework refers to the discretionary compensation mechanisms.[60]

Issues with the CDDA scheme

3.40      Several submissions raised specific issues about the CDDA scheme. In particular, the Acting Commonwealth Ombudsman suggested that two limitations on the CDDA scheme require further consideration and reform. The first limitation is that the CDDA applies only to agencies that come under the FMA Act, and not to CAC Act agencies such as Comcare. The Acting Ombudsman noted that:

The office has investigated a number of complaints where a person claims they have suffered a financial loss due to defective administration by a Commonwealth entity [subject to the CAC Act], but is unable to have their claim considered because the entity does not fall under the FMA Act.[61]

3.41      Furthermore, the Commonwealth Ombudsman noted:

From the point of view of individuals who suffer loss or damage, it seems to us to be largely irrelevant about the nature of the legal instrument by which the agency was established. If the nature of the loss or damage is quantifiable then, under that moral principle, people should be equally entitled to recover.[62]

3.42      A representative from the Department of Finance and Deregulation told the committee that some Commonwealth company bodies have arrangements for dealing with claims, while others do not, depending on their particular governance arrangements.[63] Another representative from the Department noted that, while it is relatively easy to apply a consistent approach to Commonwealth agencies covered by the FMA Act, those covered by the CAC Act can have specific legislation that govern the way they operate, making it more difficult to apply a consistent approach.[64] Bodies under the CAC Act can make arrangements for compensation to the extent their enabling legislation allows.[65] In the specific case of Comcare:

The Department of Education, Employment and Workplace Relations (DEEWR) and Comcare are currently developing a scheme similar to the Scheme for Compensation for Detriment caused by Defective Administration within the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) to enable payment of compensation when the administration of bodies under the SRC Act have been defective.[66]

3.43      The second limitation raised by the Acting Ombudsman relates to the application of the scheme where a government agency contracts out the provision of services. Compensation under the CDDA scheme is not available where the defective administration relates to actions or omissions of a non-agency person such as a contracted service provider.[67] The Acting Ombudsman pointed out that this may mean that:

...the Australian Government agency has effectively contracted out of its accountability for matters that it would otherwise be responsible to deliver. It also creates an inequitable situation as clients of those service providers currently do not have any obvious means of having their claims of defective administration addressed in a consistent manner.[68]

3.44      The Acting Ombudsman also reiterated the findings of the Putting things right report in relation to the need to increase the visibility of the CDDA scheme, provide better assistance to CDDA claimants, and for agencies to adopt a less defensive and legalistic approach to CDDA decision-making.[69] An organisation which has improved its response to claims for compensation is the Child Support Agency:

That response included some reforms around a specific hotline in relation to compensation—not just CDDA but other forms of compensation—having a dedicated team and actually putting more resources into their staffing of compensation. They put a whole lot of information online, making sure that people had greater access to claim forms as well as information about the schemes. They took into account the issues that we had around procedural fairness deficiencies and actually put procedural fairness into their instructions and their team processes. They took into account the concerns we had about administrative drift, and they acknowledge each claim within 48 hours and have put in a 90-day ceiling...Importantly, too, they are trying to utilise the CDDA or compensation claims to improve their systems, so part of the process has a feedback loop back into business improvement.[70]

3.45      The submission from Connecting Home supported the view that there is a need to raise the profile of the CDDA scheme:

[I]t is not unreasonable to assume that information on this kind of redress is not commonly known throughout the Australian community, let alone in communities that experience poor literacy levels. It can be safely assumed that there is scant awareness of the CDDA scheme in the community.[71]

3.46      The Women's Legal Service NSW raised several concerns about the CDDA scheme. These concerns were based on an unsuccessful application for compensation under the scheme, lodged on behalf of a client with the Australian Federal Police and the Child Support Agency. The concerns include:

(a)         that 'detriment' is defined too narrowly under the scheme and that the threshold for demonstrating economic loss is very high;

(b)        the difficulties applicants face where the defective administration involves more than one agency, as each agency may assume the other is responsible; and

(c)         the time taken to process an application under the scheme.[72]

3.47      Echoing the Acting Ombudsman's concerns about agencies adopting an overly defensive and legalistic approach to CDDA decision-making, the Women's Legal Service NSW noted that:

We suspect that the costs of 'defending' our client's claim were probably disproportionate to any possible compensation award as both agencies hired leading commercial law firms to represent them. This is not in the spirit of the 'moral' as opposed to 'legal' obligation that is central to CDDA.[73]

3.48      A specific recommendation from the Commonwealth Ombudsman's report Putting things right, was that the Australian Government consider the merits of establishing an interdepartmental advisory or review panel to deal with disputed or exceptional CDDA claims. The committee notes that this recommendation has not been implemented, however the Department of Finance and Deregulation indicated that a review panel was under consideration by the interagency forum on discretionary compensation mechanisms.[74]

3.49      The Department also identified a number of advantages and disadvantages in the establishment of an interdepartmental review panel for the CDDA scheme. The advantages include that the proposed panel: would supplement the Commonwealth Ombudsman's oversight of the CDDA scheme; provide a right of review; and provide an opportunity for a second opinion. The disadvantages identified include that the proposed panel: would be a duplication of the Commonwealth Ombudsman's role; does not reflect that the CDDA is permissive and operates to remedy situations where there is no legal obligation; and would require increased funding for secretariat functions and associated administrative costs.[75]

3.50      Finally, the Department suggested that consideration be given to requiring that claims of $250,000 or more under the CDDA scheme be referred to an advisory committee. That committee would be similar to the advisory committee required (under the FMA Act) to report on applications for act of grace payments or waiver of debts of $250,000 or more.[76]

Committee view

Waiver of debt schemes

3.51      The committee acknowledges the concerns raised during the inquiry regarding the operation of 'waiver of debt' provisions within current social security legislation. The committee considers that it is important that persons who receive welfare payments obtain appropriate amounts and that overpayments are recoverable as debts. However, the recovery of debts from persons who receive welfare payments where Commonwealth agencies are predominantly at fault, or where debts have been caused by the duress of another person, can clearly create unfair and unjust outcomes.

Recommendation 6

3.52      The committee recommends that the Australian Government review 'waiver of debt' provisions contained in social security legislation and consider amendments to that legislation where current provisions could cause unfair and unjust outcomes for welfare recipients.

Compensation for Detriment caused by Defective Administration scheme

3.53      The committee acknowledges the actions of the Department of Finance and Deregulation in responding to many of the recommendations of the Commonwealth Ombudsman's report into the CDDA scheme, Putting things right. The committee considers that the CDDA scheme provides a useful mechanism for addressing harm caused by defective administration; however, from the evidence received, it appears that the CDDA scheme has not 'kept pace' with changes in Commonwealth public administration.[77] In particular, the application of the CDDA scheme to FMA Act agencies only appears to create anomalous outcomes. If a person suffers loss or damage due to defective administration they should be entitled to appropriate restitution, regardless of whether the loss or damage was caused by a FMA Act agency, a CAC Act body or a third party contracted to provide a Commonwealth service.

Recommendation 7

3.54      The committee recommends that the Department of Finance and Deregulation investigate the extension, in appropriate circumstances, of the Compensation for Detriment caused by Defective Administration scheme to Commonwealth Authorities and Corporations Act 1997 agencies and to third party providers performing functions or providing services on behalf of the Commonwealth.

Senator Guy Barnett

Chair

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