CHAPTER 5

INAPPROPRIATE DELEGATION OF LEGISLATIVE POWER

Application of criterion set out in Standing Order 24(1)(a)(iv)

5.1       The criterion in Standing Order 24(1)(a)(iv) requires the Committee to draw the Senate’s attention to legislation where Parliament’s power to make laws may have been delegated inappropriately.

5.2       In considering this criterion, a threshold question sometimes arises: is the power proposed to be delegated legislative in nature? At times it is difficult to determine whether the instruments that Parliament empowers another body or person to make are legislative in character. Such instruments might be ministerial guidelines, codes of practice, codes of conduct, or practice statements. They are often described as made under a power to direct, determine, notify, order, instruct, declare, issue or publish.

5.3       Examples of provisions that may inappropriately delegate legislative power include those which:

• enable subordinate legislation to amend an Act of Parliament (often called a ‘Henry VIII’ clause);

• provide that matters which should be regulated by Parliament are to be dealt with by subordinate legislation;

• provide that a levy or a charge be set by regulation; or

• give to the Executive unfettered control over whether or when an Act passed by the Parliament should come into force.

‘Henry VIII’ clauses

5.4       An express provision that authorises the amendment of either the empowering legislation, or any other legislation, by means of delegated legislation is called a ‘Henry VIII’ clause. The Macquarie Dictionary of Modern Law defines a ‘Henry VIII’ clause as ‘a clause in an enabling Act providing that the delegated legislation under it overrides earlier Acts or the enabling Act itself; so named because of its autocratic flavour’[1]. Since its establishment, the Committee has consistently drawn attention to such clauses.

Example: Private Health Insurance Bill 2006

5.5       In Alert Digest No. 1 of 2007, the Committee commented on several ‘Henry VIII’ clauses in this bill. Firstly, subclause 78-1(6) provided that the Private Health Insurance (Complying Product) Rules (a legislative instrument to be made by the Minister) could modify the portability requirements set out in the other provisions of clause 78-1 in relation to all or particular kinds of private health insurers, benefits or insured persons. The Committee noted that the explanatory memorandum sought to justify this ‘Henry VIII’ clause on the basis that it would ‘give the Government flexibility in adapting the portability regime to emerging patterns of care to ensure a fair balance between the interests of insurers and insured persons and persons transferring between insurers.’ The Committee considered that this was a clear case of delegation of legislative power, but left for the Senate as a whole the question of whether this delegation was appropriate or not. The Committee did, however, seek advice from the Minister as to whether the flexibility to modify the portability requirements could be achieved in some other way.

5.6       The Minister responded that:

It has proved necessary in the past to make subordinate legislation (under section 73B of the National Health Act 1953) to deal expeditiously with practices introduced by some insurers which would have unfairly limited transfer rights [of individuals to move between private health insurers].

Subclause 78-1(6) of the Bill providing that the Private Health Insurance (Complying Product) Rules may modify the requirements in clause 78-1 in relation to any or all private health insurers, benefits or insured persons continues the ability under the current Act to address unfair practices introduced by insurers without amending the primary legislation.

I consider that the most practical and appropriate way of retaining the power to move swiftly to address emerging circumstances is to include the provision that subordinate legislation may modify the portability provisions as appropriately required, subject to a Parliamentary scrutiny and disallowance regime.[2]

5.7       The Committee thanked the Minister for this response and did not comment further, except to note that it would have been helpful if this explanation had been included in the explanatory memorandum.

5.8       The Committee also commented on subparagraph 217-5(1)(b)(ii) of the Private Health Insurance Bill 2006, which permitted the Private Health Insurance (Health Benefit Fund Enforcement) Rules (also a legislative instrument to be made by the Minister) to modify various provisions of the Corporations Act 2001 in regulating the external management of a health benefits fund. In addition, subclause 217-5(4) provided that the Private Health Insurance (Health Benefit Fund Enforcement) Rules could provide for different modifications according to the nature of the health benefits fund that was being administered. The Committee considered that these provisions clearly delegated legislative power but had no means of ascertaining whether or not the delegation was appropriate because the explanatory memorandum provided no information regarding the extent to which it was intended to modify the provisions of the Corporations Act 2001, nor the purpose intended to be achieved by such modifications. The Committee sought the Minister’s advice as to the reason for this delegation of legislative power.

5.9       The Minister’s response to the Committee noted that the relevant provisions replicated provisions in the existing regulatory regime under the National Health Act 1953 and that the inclusion of these provisions in the bill allowed for ‘the continuation of the current rules for the administration of health benefits funds.’[3] The Minister also advised the Committee that the intended scope of the application of the provisions to the Corporations Act 2001 remained unchanged. 

5.10         The Committee thanked the Minister for this response and made no further comment except to note that it would have been helpful if this information had been included in the explanatory memorandum.

Example: Food Standards Australia New Zealand Amendment Bill 2007

5.11         In Alert Digest No. 5 of 2007, the Committee commented on proposed new subsection 112(6) of the Food Standards Australia New Zealand Act 1991, to be inserted by item 76 of Schedule 1 of this bill, which enabled regulations to modify all, or specified provisions of, part 3 of the Act. The Committee noted that the explanatory memorandum sought to justify this provision on the grounds that proposed
section 112 merely retained the status quo, ‘by replacing the current section 36A’ of the Food Standards Australia New Zealand Act 1991. While acknowledging that this may have been the case, the Committee pointed out that this was not an explanation for why a ‘Henry VIII’ clause was considered necessary.  The Committee sought the Minister’s advice in respect of this issue.

5.12         The Parliamentary Secretary to the Minister for Health and Ageing responded to the Committee in a letter dated 30 May 2007.  The Parliamentary Secretary advised the Committee that subsection 112(6) ‘retained an existing capacity provided in section 36A from the Food Standards Australia New Zealand Act 1991’, but that, following consultation with Food Standards Australia New Zealand ‘it appears that the provision has never been utilised and there are no existing regulations to this effect.’[4] The Parliamentary Secretary indicated that ‘as the provision is somewhat antiquated and in light of the concerns highlighted by the Committee I intend to remove section 112(6) from the Bill.’

5.13         The Committee thanked the Parliamentary Secretary for this response and for the commitment to amend the bill to address the Committee’s concern. On
14 June 2007, the Senate agreed to three amendments to the bill, one of which implemented the Parliamentary Secretary’s commitment to remove section 112(6) from the bill.[5]

Example: Superannuation Bill 2005

5.14         In Alert Digest No. 5 of 2005, the Committee commented on clause 22 of this bill for several reasons. Firstly, subclause 22(2) was a ‘Henry VIII’ clause in that it would permit the amendment of subclause 22(1) by regulation. The Committee noted that any such regulation would be subject to the usual tabling and disallowance regime under the Legislative Instruments Act 2003 and subject to scrutiny by the Regulations and Ordinances Committee, which would often meet the Committee’s concerns.  However, the Committee noted that the effect of such a regulation would be to expose the Board of the Public Sector Superannuation Accumulation Plan (PSSAP), and the Fund itself, to some form of taxation, from which subclause 22(1) provided exemption. In effect, in addition to being a ‘Henry VIII’ clause, subclause 22(2) allowed for the imposition of taxation by regulation.

5.15         One concern that the Committee has regularly raised in relation to the imposition of any form of taxation or levy by regulation is that the regulation takes effect as soon as it is made, but may not be disallowed for a considerable period of time after that date. For example, in this instance, the Committee noted that if a regulation under subclause 22(2) was made soon after the Parliament rose for the usual winter recess, the relevant tax could have effect for a number of months before a disallowance motion was considered by the Senate. In the meantime, the tax would have been validly levied, and could not be refunded without further parliamentary intervention.  

5.16         While the Committee noted that similar provisions existed in relation to other superannuation schemes, for instance section 26 of the Superannuation Act 1990, the Committee, nevertheless, sought the Minister’s advice as to whether it was appropriate to provide for the imposition of taxation through delegated legislation in this manner.

5.17         The Minister for Finance and Administration responded that, as noted by the Committee, subclause 22(2) replicated similar provisions in the Superannuation Act 1990 and would ‘ensure that the taxation arrangements applying to the PSS Board, in respect of the PSSAP, and the PSSAP Fund are the same as would have applied had the PSSAP otherwise commenced as a sub plan of the PSS.’[6] The Minister further advised that the equivalent power in the 1990 Act had only been used on one occasion, ‘in a circumstance where it was not possible for the Act to be amended in time to ensure that the Goods and Services Tax would apply to the Board and Fund on the same basis as it was to apply to other superannuation trustees and funds’.[7]

5.18         The Minister noted the Committee’s concerns that regulations could alter the taxation arrangements of the Fund before the Parliament had time to consider the instrument. In response, the Minister proposed that any regulations made under subsection 22(2) of the bill would have a commencement date no earlier than the end of the period for which the instrument was subject to disallowance.  The Committee thanked the Minister for the response, noting that the approach proposed by the Minister would add ‘a measure of certainty’ and met the Committee’s concerns.[8] 

Example: National Offshore Petroleum Bill 2005

5.19         This same issue also arose in respect of a provision in the National Offshore Petroleum Bill 2005, which would exempt the National Offshore Petroleum Safety Authority from any liability to taxation under the laws of the Commonwealth, States and Territories, but would permit that exemption to be removed, in relation to a specified law, by regulation. The Committee raised the same concerns as it had in respect of the Superannuation Bill 2005, ie. that the provision would permit the imposition of taxation by delegated legislation and the tax could be imposed for some period of time before the instrument could be disallowed by the Parliament. The Committee sought the Minister’s advice on the reason for this ‘Henry VIII’ clause.[9]

5.20         The Parliamentary Secretary to the Minister for Industry, Tourism and Resources responded that:

• technically the bill did not allow taxation by regulation. The effect of subclause 399(2) of the bill would merely be to remove the tax exemption provided by subclause 399(1). The tax itself would be imposed by the relevant Commonwealth, State or Territory Act;

• it is always the case when a regulation is disallowed that it will have a period of operation prior to disallowance;

• this was not a case of a private citizen or commercial entity being made subject to a tax as a result of the making of a regulation, as the ‘tax-payer’ in question would be a Commonwealth statutory corporation; and

• there were precedents for clauses of this nature in other Acts.[10]

5.21         The Committee thanked the Parliamentary Secretary for this response. The Committee accepted that in a legal sense any tax would be imposed by primary legislation, but remained concerned that in a practical sense it would be the regulations that would allow the tax to be imposed. The Committee also accepted that there were precedents for these sorts of clauses but expressed the view that, as a matter of principle, the Parliament should specifically consider, on a case-by-case basis, whether it is appropriate to enact clauses of this nature.[11]

5.22         The Committee also noted the Parliamentary Secretary’s contention that ‘it is always the case when a regulation is disallowed that it will have a period of operation prior to disallowance’, but noted that there are options to prevent this from occurring. These included, specifying that regulations would not commence until after the disallowance period had expired (as the Minister for Finance and Administration agreed to do in respect of the Superannuation Bill 2005) or including a similar provision in the primary legislation itself. The Committee suggested that these options might be considered in the policy review of the legislation that was foreshadowed in the explanatory memorandum to the bill.[12]

5.23         Finally, the Committee noted the advice from the Parliamentary Secretary that the taxation arrangements that would be affected by this clause exist between Government agencies, rather than members of the public or other entities. The Committee indicated that this reduced its concerns with this particular clause. In the circumstances, the Committee made no further comments on this provision.[13]  

Determination of important matters by regulation

5.24         The Committee also draws attention to provisions that inappropriately delegate legislative power of a kind which ought to be exercised by Parliament alone. One example of such a provision (from a previous Parliament) was a clause that conferred power on the Executive to define a word or phrase in an Act. The definition determined the way in which the Act was to operate.[14] In such circumstances, the Committee will argue that the defining of the word or phrase is too crucial a matter to be left to subordinate legislation and should be undertaken by the Parliament.

Example: Social Security and Other Legislation Amendment (Welfare Payment Reform) Bill 2007

5.25         The Social Security and Other Legislation Amendment (Welfare Payment Reform) Bill 2007 sought to establish a national income management regime that requires parents on income support to ensure that their children are enrolled at, and regularly attend, school. In Alert Digest No. 9 of 2007, the Committee commented on proposed new subsection 123UK(1) of the Social Security (Administration) Act 1999, to be inserted by item 17 of Schedule 1 of this bill, which provided that the question of whether an unsatisfactory school attendance situation existed in relation to a child was to be ascertained in accordance with a legislative instrument made by the Minister. 

5.26         The Committee noted from the explanatory memorandum that ‘a person can be subject to the income management framework only when an unsatisfactory school attendance situation exists. The Committee concluded, therefore, that ‘the definition of an unsatisfactory school attendance situation was fundamental to the application of the income management framework to welfare recipients’ and that, as such, the definition was a matter more appropriately dealt with in primary legislation.  

5.27         The Committee drew the provision to the attention of Senators on the basis that it inappropriately delegated legislative powers, but left it for the Senate as a whole to decide whether it did so unduly. The Senate passed the bill on 17 August 2007. The bill was not amended to address the Committee’s concerns.[15]

Example: Aviation Legislation Amendment (2007 Measures No. 1) Bill 2007

5.28         In Alert Digest No. 8 of 2007, the Committee commented on proposed new section 38B of the Aviation Transport Security Act 2004, to be inserted by item 14 of Schedule 1 of this bill, which provided for regulations to ‘prescribe offences in relation to the disruption or interference with the activities of an airport operator or a security controlled airport, or the activities of an aircraft operator at a security controlled airport’ in certain circumstances.

5.29         The Committee noted from the explanatory memorandum to the bill that:

new section 38B is needed because the existing regulation making powers in the Act are not well adapted to creating offences that effectively deter disruptive activities [within airports]... Similarly, the existing regulation making powers do not permit the regulation of disruptive conduct outside the boundaries of an airport even if the conduct has the direct effect of severely disrupting the activities of the airport operator or of an aircraft operator. Examples of conduct outside an airport that might disrupt airport operations include directing light emitting devices (such as laser devices) into the airport through or over the top of the airport’s perimeter fence. Although some such incidents may not pose a direct threat to aviation, all incidents inevitably invite a serious security response because the activity has to be investigated quickly to determine whether there is a serious risk...the existence of a set of appropriately crafted offences in the Regulations is expected to provide a sensible deterrent for deliberate and repeat offenders.’[16]

5.30         The Committee further noted that sub-section 38B(2) provided that the offences prescribed by the regulations ‘may relate to conduct that occurs outside the boundaries of a security controlled airport’, which could effectively mean anywhere, including, presumably, conduct that occurred on residential properties abutting airports. Given the apparent wide scope of these provisions and the not insignificant financial penalty that could be imposed (up to 50 penalty units = $5500), the Committee questioned whether these offence-making powers might be more appropriately exercised by the Parliament.

5.31         The Committee, noting that the explanatory memorandum provided no explanation as to why these ‘appropriately crafted offences’ could not be included in primary legislation, sought the Minister’s advice as to why it was considered necessary for these offences to be able to be created by regulation rather than by primary legislation.

5.32         The Minister for Transport and Regional Services responded to the Committee, advising that the approach followed in this bill ‘is used in Bills where it is not possible at the time of drafting to anticipate all forms of offensive conduct that will need to be prohibited or regulated and where a relatively low penalty will apply.’[17] The Minister also emphasised the importance of the proposed new regulation-making power ‘as a first line of regulatory response in dealing with new problems as they are identified’, citing the use of laser lights as an example:    

One application of new section 38B will be to prescribe a new offence to prohibit a person from shining a laser light from a place outside a security controlled airport into the airport. Laser technology is changing rapidly, so that more powerful laser devices are becoming more readily available to the general public for a wide range of lawful purposes. In such circumstances, where it is not possible to predict all of the circumstances in which a laser device might be used to disrupt airport operations or against an aircraft on the ground, the most flexible and responsive strategy is to prescribe offences by regulation so that the regulations can be amended quickly as soon as a new type of threat emerges.[18]

5.33         The Minister also assured the Committee that every regulation that created a new offence would be subject to Parliamentary scrutiny and disallowance.[19] The Committee thanked the Minister for this response and made no further comment on the provisions.[20] 

Setting the rate of a ‘levy’ by regulation

5.34         The Committee has consistently drawn attention to legislation that provides for the rate of a ‘levy’ to be set by regulation. This creates a risk that the levy may, in fact, become a tax. It is for the Parliament, rather than the makers of subordinate legislation, to set a rate of tax.

Providing a statutory maximum rate or a rate-setting formula

5.35         Where the rate of a levy needs to be changed frequently and expeditiously, this may be better done through amending regulations rather than the enabling statute. If a compelling case can be made for the rate to be set by subordinate legislation, the Committee seeks to impose some limit on the exercise of this power. For example, the Committee will seek to have the enabling Act prescribe either a maximum figure above which the relevant regulations cannot fix the levy, or, alternatively, a formula by which such an amount can be calculated. The vice to be avoided is delegating an unfettered power to impose fees.

Example: Offshore Petroleum (Annual Fees) Bill 2005

5.36         In Alert Digest No. 8 of 2005, the Committee examined the Offshore Petroleum (Annual Fees) Bill 2005, the purpose of which was to impose annual fees for various aspects of drilling for, and recovering petroleum in, offshore areas. The Committee commented on subclause 4(3) of this bill, which would allow the amount of each of these fees to be fixed by regulation, with no upper limit set in the primary legislation.

5.37         The Committee noted that the Minister’s second reading speech advised that ‘the holders of permits, leases and licences must pay a fee to help recover the costs of administration’, suggesting that the fees would be set at no more than cost recovery, but this was not clear from either the bill or the explanatory memorandum. The Committee was of the view that if the amount of the various fees was limited to cost recovery, then they could not properly be regarded as taxes and the setting of their amount by regulation would not be regarded as an inappropriate delegation of legislative power. The Committee sought the Minister’s advice about whether the amount of the fees would be limited to cost recovery and, if so, whether the bill might contain a clause prescribing an appropriate limit.[21]

5.38         The Parliamentary Secretary to the Minister for Industry, Tourism and Resources responded on 18 August 2005, assuring the Committee that the amount of the fees had always been, and would continue to be, set with a view to cost recovery.[22] The Committee thanked the Parliamentary Secretary for this response, indicating that this assurance met the Committee’s concerns. The Committee suggested, however, that in the policy review of the legislation foreshadowed by the Parliamentary Secretary, the Parliamentary Secretary might give consideration to whether a clause giving legislative force to this assurance might be included in future legislation.[23]

Example: Offshore Petroleum (Registration Fees) Bill 2005

5.39         In Alert Digest No. 8 of 2005, the Committee commented on a number of provisions that provided for the amount of a tax to be set by regulation. These were:

• items 2, 3 and 4 in the table to subclause 5(2), which provided for the amount of the fees referred to in those items to be set by regulation, with no upper limit specified in the primary legislation. Subclause 5(4) of the bill stated that the ‘fee imposed by this section is imposed as a tax’; and

• items 5 and 6 in the table to subclause 6(2), which provided for the amount of the fees referred to in those items to be set by regulation, with no upper limit specified in the primary legislation. Subclause 6(6) of the bill also stated that the fee is ‘imposed as a tax’.

5.40         The Committee noted that the explanatory memorandum specified the amount of these fees at the time that the legislation was introduced into the Parliament, but sought the Minister’s advice whether it would be possible for the primary legislation to specify a maximum amount for each of these fees.[24]

5.41         The Parliamentary Secretary to the Minister for Industry, Tourism and Resources responded that these provisions ‘replicate without change the provisions of the Petroleum (Submerged Lands)( Registration Fees) Act 1967’ and that the rationale for providing for the prescribing of the fees by regulation in that Act was to:

enable the timely adjustment of fees so that they more closely reflect actual administrative costs and so that the Government is not in a situation of trying to retrospectively catch up with incurred costs. In the case of this legislation, the costs are, of course, administrative costs incurred by the States and Northern Territory.[25]

5.42         The Parliamentary Secretary went on to state that:

There is evidence to suggest that the Parliament of the day saw the abovementioned amounts, if not all amounts, imposed under the Petroleum (Submerged Lands) (Registration Fees) Act as essentially about cost recovery, not as a tax. Whether advice had then been received that this Act is a taxing Act is unclear, but later legal advice has definitively affirmed that finding.

Despite the tax status of the moneys paid under this Act, I do not see these prescribed amounts as a significant element of the tax base. Rather, I see them representing a minimal contribution covering the administrative costs of the registration procedure in the specified situations where application of the ad valorem calculation would be inappropriate. During the term of the current Government, the level of the amounts prescribed in regulations under the Petroleum (Submerged Lands) (Registration Fees) Act has been increased by no more than the consumer price index, and this will continue to be the policy pursued.[26]

5.43         The Parliamentary Secretary indicated that he had requested the Department,  as part of a forthcoming policy review of the legislation, to consider the question of whether an upper limit should be set in the Act, noting that the review could also consider the alternative of merely inserting a new provision stating that these amounts cannot be increased by more than the consumer price index.[27]

5.44         The Committee thanked the Parliamentary Secretary for this response, noting that the assurances provided met the Committee’s concerns. The Committee also thanked the Parliamentary Secretary for including this matter in the foreshadowed policy review of the legislation.[28]  

Commencement by Proclamation: Office of Parliamentary Counsel Drafting Direction No. 1.3 (May 2007)

5.45         The Committee is wary of provisions that enable legislation to commence on a date ‘to be proclaimed’ rather than on a determinable date. Where a bill, or part of a bill, is expressed to commence on Proclamation, the date proclaimed should be no later than six months after the Parliament passes the relevant measure.

5.46         The Committee takes the view that Parliament, as the elected holder of Federal legislative power, is responsible for determining when the laws it makes are to come into force. In taking this view, the Committee is conscious of Drafting Direction No. 1.3 (May 2007) issued by the Office of Parliamentary Counsel. This provides, in part:

18.     As a general rule, a restriction should be placed on the period within which an Act, or a provision of an Act, may be proclaimed. The commencement clause should specify either a period, or a date, after Royal Assent after which:

• the Act commences, if it has not already commenced by Proclamation; or

• the Act is taken to be repealed, if a Proclamation has not been made by that time.

19.     If the specified period option is chosen, the period should generally not be longer than 6 months. A longer period should be explained in the Explanatory Memorandum.

20.     If the specified date option is chosen, there is no restriction on how long commencement may be deferred. However, any substantial deferrals should be explained in the Explanatory Memorandum, and it may in fact be sensible to explain the significance of the specified date whenever this option is used.

21.     Note that if the “repeal” option is chosen, there is no limit on the time from Royal Assent to commencement, as long as the Proclamation is made before the end of the specified period or before the specified date.

22.     Clauses providing for commencement by Proclamation, but without the restrictions mentioned above, should be used only in unusual circumstances, where the commencement depends on an event whose timing is uncertain and generally not within the Government’s control (eg. enactment of complementary State legislation). Commencement provisions of this kind should be explained in the Explanatory Memorandum.

5.47         Where the rules set out in the Drafting Direction are not followed, the Committee prefers to see the reason for this departure set out in the explanatory memorandum. For example, where a six month period is said to be impractical, the Committee likes to see another period – such as a period of 12 months – specified and a justification provided in the explanatory memorandum, rather than no period at all.

5.48         In Alert Digest No. 8 of 2005, the Committee drew Senators’ attention to
item 2 in the table to subclause 2(1) of the Offshore Petroleum Bill 2005, which provided that almost all of the bill’s provisions would commence on Proclamation but failed to specify a limit within which the provisions must commence in any event. The Committee noted from the explanatory memorandum that the commencement of the measure was dependent upon the enactment of complementary legislation by the States and Territories. The Committee acknowledged that it would generally accept this justification for delayed commencement, but that it was not justification for an open-ended period of commencement, as provided for in this bill. As such, the Committee sought the Minister’s advice as to whether the commencement clause might be subject to the provision that, if the necessary Proclamation had not been issued by some fixed date in the future, the Act would be automatically treated as having been repealed at that date.

5.49         The Parliamentary Secretary to the Minister for Industry, Tourism and Resources responded that the Commonwealth-State-Northern Territory inter-jurisdictional issues in this package of legislation ‘have unusual characteristics’ that made the open-ended commencement clause appropriate.  These included that:

• the Commonwealth legislation recognised the State or Northern Territory Minister as having functions and powers under the Commonwealth Act itself and these functions and powers were tied to what was to appear in the mirror State and Territory Acts; and

• there was at least one State Act unrelated to petroleum that referred to adjacent areas under the Commonwealth Petroleum (Submerged Land) Act and that State Act (and possibly others), might require pre-emptive amendments before the new Commonwealth legislation was proclaimed.

5.50         In light of these complexities, the Minister considered it would be ‘ill-advised to merely list the names of the mirror State and Territory Acts in the Offshore Petroleum Bill and state that the proposed Act would need to be proclaimed within a certain number of months of the last of these Acts being amended.’ Similarly, the Minister considered that there would have been an ‘unfavourable reaction’ from stakeholders, such as the petroleum industry and the State and Northern Territory Governments, if a provision was included ‘raising the possibility of repeal of the enactment before it even came into force.’[29]

5.51          The Committee thanked the Parliamentary Secretary, noting the many factors that made it difficult to more accurately set a likely commencement date for the legislation.  The Committee also noted that this bill was a ‘rewrite’ of the existing law, making only modest policy changes. Given that the consequences of delayed commencement would be the continuation of the existing scheme, the Committee accepted the approach taken to commencement in this bill.[30]

5.52         A number of other bills considered by the Committee during the
41^st Parliament provided for commencement on Proclamation because their application depended on uncertain events – either the passing of complementary legislation by other jurisdictions (for example the Murray-Darling Basin Amendment Bill 2006) or on the entering into force of an international Convention or agreement (for example the Food Standards Australia New Zealand Amendment Bill 2007). These provisions were of a kind contemplated by the relevant Drafting Direction and, as long as a clear explanation was provided in the accompanying explanatory memorandum, the Committee noted them without further comment.

5.53         Where no explanation for commencement on Proclamation that exceeded six months was provided in the explanatory memorandum, the Committee continued to comment. For example, in Alert Digest No. 9 of 2004, the Committee commented on provisions in the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004,[31] which provided for a large number of the proposed amendments in the bills to commence on the later date of 1 January 2005 or on the day on which the Australia-United States Free Trade Agreement came into force.

5.54         The Committee noted that while the bills provided that if the Free Trade Agreement did not come into force then the relevant items did not commence at all, they established no timeframe in which this needed to occur. As such, the Committee concluded that the commencement of these amendments remained uncertain and noted that the explanatory memoranda to the bills failed to explain why this uncertainty was considered necessary. The Committee sought the Minister’s advice whether the relevant items might include a provision that if the Free Trade Agreement had not entered into force for Australia by some fixed date, then the Act would be automatically treated as having been repealed on that date.

5.55         The Minister for Justice and Customs responded that the commencement clauses had been formulated with the advice of the Office of Parliamentary Counsel and that similar formulations had been used in other bills in the past. The Minister further advised that the ‘Government has endeavoured to provide additional clarity by including our target date for entry into force of the Agreement (1 January 2005) and by including a requirement for the Minister for Trade...to announce by notice in the Gazette the day on which the Agreement comes into force for Australia.’[32]

5.56         The Committee thanked the Minister for this response but reiterated its concern that the commencement provision in these bills had ‘all the hallmarks of open-ended proclamation provisions’ as they provided for commencement on the date of an uncertain event without providing the means to conclusively determine whether that event had not occurred or would not occur.  The Committee noted that the choice of the date of commencement was, therefore, delegated by the Parliament to the Executive, without limitation.[33]

5.57         The Committee reiterated its view that:

• legislation implementing international treaty obligations should not be treated any differently than other legislation susceptible to delay; and

• all such legislation should include a date (or period) after which the legislation must commence or be taken to be repealed and, where a particular date (or period) represents a significant delay in commencement, an explanation should be provided in the explanatory memorandum accompanying the bill.[34]

5.58         These bills were passed by both Houses of the Parliament prior to the Committee reporting on the response from the Minister. The bills were not amended to address the Committee’s concerns.

5.59         The Committee continued to raise this issue throughout the 41^st Parliament, with mixed success. For example, in Alert Digest No. 5 of 2005, the Committee commented on item 3 in the table to subclause 2(1) of the Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Bill 2005, which provided that the amendments in Schedule 2 of the bill would commence on the day on which the Optional Protocol to the Convention on the Rights of the Child, on the Involvement of Children in Armed Conflict, entered into force. The Committee noted that the item did not provide any fixed date by which it could be finally determined that the Optional Protocol would not come into force and sought the Minister’s advice as to whether the item might provide for a means of determining when (if ever) the Optional Protocol was to be regarded as not coming into force.  

5.60         The Minister for Justice and Customs responded to the Committee in a letter dated 25 July 2005, agreeing that the bill should be amended to provide certainty of commencement of the Optional Protocol. The Minister proposed to introduce a Government amendment to the bill to provide that Schedule 2 would not commence at all if the Optional Protocol did not come into force in Australia within 6 months of the Act receiving the Royal Accent.[35]

5.61         The Committee thanked the Minister for this response and for undertaking to amend the bill. Unfortunately, the bill was never amended to address the concerns of the Committee.

5.62         The Committee also noted more generally that the 2005 revision of the Drafting Directions issued by the Office of Parliamentary Counsel, highlighted the Committee’s concerns regarding the commencement of bills implementing international agreements without a time limit.[36]

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