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13542 Cat. No. 97 2787 6 ISBN 0644
518308
1998
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
COMMONWEALTH
REHABILITATION SERVICE REFORM BILL 1998
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Family Services, the Hon. Warwick Smith,
MP)
COMMONWEALTH REHABILITATION
SERVICE REFORM BILL
1998
OUTLINE
This Bill provides for a number of transitional
provisions to facilitate restructuring of the Commonwealth Rehabilitation
Service (CRS) as a Commonwealth company.
CRS, which currently operates as a
Division of the Department of Health and Family Services, is to be replaced by a
Commonwealth owned company limited by shares, established under the Corporations
Law. The Bill provides for the transfer of CRS assets (which includes records),
contracts and liabilities to the new company. The transfer of CRS staff will be
handled separately under the provisions of section 81C of the Public Service
Act 1922.
Part 3 - Amendments
proposes the repeal of part III of the Disability Services Act
1986 to reflect changes to the structure of
CRS. Some other Acts refer to Part III of the Disability Services Act
1986. These Acts are altered in the schedules to reflect this structural
change. Eligibility for programs will remain
unchanged for clients but operate under an administrative scheme in the form of
a contract with CRS in the first year. In subsequent years, other providers
will be able to enter into contracts with the Department for the provision of
these services. For clients on existing programs, Part III of the Disability
Services Act 1986 will remain in force as a saving measure.
FINANCIAL
IMPACT
Establishment of CRS as a company limited by
shares should have no direct impact on the Budget balance.
COMMONWEALTH REHABILITATION
SERVICE REFORM BILL 1998
NOTES ON
CLAUSES
Part 1 -
Preliminary
Clause 1 - Short
Title and Clause 2 -
Commencement
The first two clauses
deal with the short title of the Bill and for commencement dates of the
legislation. Parts 1 and 2 of the Act will come into effect on the day on which
it receives Royal Assent. Part 3 commences on a day to be fixed by proclamation
or, at the latest,
6 months after the Act
receives Royal Assent.
Part 2 - Transitional Provisions
Relating to the Corporatisation of
the
Commonwealth Rehabilitation
Service (CRS)
Division 1 -
Introduction
Clause 3 - Simplified
outline
This clause provides a
simplified outline for Part 2 of the
Bill.
Clause 4 -
Definitions
This clause provides
definitions for various terms used in the
Bill.
Clause 5 - Nominated
company
This clause provides for the
Minister to declare by writing that a specified company is the “nominated
company” referred to throughout the Bill (subclause 1). The company must
be incorporated under Corporations Law and have a share capital (subclause 2).
A copy of the Minister’s declaration must be published in the Gazette
within 21 days (subclause 4).
Clause
6 - Commonwealth-owned company
This
clause defines a “Commonwealth-owned” company for the purpose of
Part 2 of the Bill as one in which all of its shares are beneficially owned by
the Commonwealth.
Clause 7 - Crown to
be bound
This clause binds the Crown
in relation to this Part.
Clause 8 -
External Territories
This clause extends
the operation of this Part of the Bill to the External
Territories.
Clause 9 - Extra-territorial
operation
This clause provides for
the operation of this Part of the Bill outside Australia.
Division 2 - Transfers from the Commonwealth to the nominated company
This Division deals with the transfer to the
nominated company of Commonwealth assets, contracts and liabilities relating to
CRS. It also deals with associated matters such as pending proceedings in any
court or tribunal and registration of transfers of land.
Clause 10 - Transfer of
assets
This clause provides a
mechanism to transfer to the nominated company Commonwealth assets (including
intellectual property and records) used or proposed to be used by CRS (subclause
1). It provides for the Minister to make written declarations specifying that
particular assets vest in the company, without any conveyance, transfer or
assignment, and that specified instruments relating to those assets continue to
have effect after their transfer as if a reference to the Commonwealth were a
reference to the company. It also provides for the Minister to declare in
writing that the company becomes the Commonwealth’s successor in law in
relation to those assets (subclauses 2 and 3). Any declarations must be
published in the Gazette within 21 days (subclause 4). Assets can only
be transferred to the company if it is wholly Commonwealth owned (subclause 5).
This clause does not prevent the Commonwealth from transferring assets to the
company by other means (subclause 6).
Clause 11 - Transfer of contractual
rights and obligations
This clause
provides a mechanism to substitute the nominated company for the Commonwealth in
contracts (other than contracts of employment) relating to CRS (subclause 1).
The Minister may declare in writing that the Commonwealth’s rights and
obligations under a contract cease and become the rights and obligations of the
company (subclause 2). The Minister may also declare in writing that a
contract, and instrument relating to that contract, continue to have effect as
if a reference to the Commonwealth were a reference to the company (subclauses 3
and 4). Further, the Minister may declare in writing that the company becomes
the Commonwealth’s successor in law in relation to the rights and
obligations under the contract (subclause 5). Any declarations must be
published in the Gazette within 21 days (subclause 7). Declarations
under subclauses 2 and 3 can only be made at a time when the company is wholly
Commonwealth owned (subclause 8). This clause does not limit the operation of
clause 10 (subclause 9).
Clause 12 -
Transfer of liabilities
This clause provides a mechanism to transfer
Commonwealth liabilities, relating to CRS, to the nominated company (subclause
1). It provides for the Minister to make written declarations specifying that
particular liabilities cease to be Commonwealth liabilities and become
liabilities of the company, and that specified instruments relating to those
liabilities continue to have affect after their transfer as if a reference to
the Commonwealth were a reference to the company. It also provides for
the Minister to declare that the company becomes the Commonwealth’s
successor in law in relation to those liabilities (subclauses 2 and 3). Any
declarations must by published in the Gazette within 21 days (subclause
4). Commonwealth liabilities can only be vested in the company if it is wholly
Commonwealth owned (subclause
5).
Clause 13 - Transfers of land may
be registered
This clause deals with
the registration of any right, title or interest in land transferred to the
nominated company under the provisions of clause 10. It provides for the
lodgement of an appropriate certificate signed by the Minister (subclause 1) and
for a land registration official to register that transfer in accordance with
the certificate (subclause 2).
Clause 14 - This Division does not
modify registers kept by land registration
officials
This clause makes clear
that the Bill does not itself modify any register kept by a land registration
official under a law of a State or Territory.
Division 3 -
Miscellaneous
Clause 15 - Exemption of nominated company from State and Territory taxes
This clause provides for the nominated company to
be exempt from taxation under a law of a State or Territory as long as the
company is wholly Commonwealth owned and carries on activities within the
legislative powers of the Parliament (subclause 1). It also allows for
regulations to provide that the exemption will not apply in relation to taxation
under a specified law (subclause 2). This means that States and Territories
cannot require taxes and charges to be paid by the new company without the
Commonwealth approving amendments to the exemptions through relevant regulation.
Clause 16 - Nominated company not to be an agency of the
Commonwealth etc.
This clause includes
provisions to clarify the application of Commonwealth, State or Territory laws
to the nominated company. These are standard provisions intended to remove the
company from the many administrative and other obligations that apply to
Commonwealth entities which are inappropriate for an entity intended to operate
on a competitive basis in the market place.
For the purposes of a law the company is not to be
treated as a “Commonwealth authority”, or as “established for
a public purpose or for a purpose of the Commonwealth” or as “a
public authority or an agency or instrumentality of the Crown” within the
ordinary meaning of those terms (subclause 1). This means that any law which
uses these expressions in a different way, for example with a broader definition
which includes reference to Commonwealth controlled companies, will apply to the
new CRS company. A future law could also expressly apply to the nominated
company.
Subclauses 2 and 3 provide
that the nominated company will fall within the definition of
“Commonwealth authority” of the Public Service Act 1922, if
paragraph 7(1)(c) or (d) of that Act applies. This puts beyond doubt that
section 81C of that Act can be used to transfer CRS staff, who are currently
employed under the Public Service Act 1922, to the employ of the company.
The term “law” as used in
this clause is defined to mean Commonwealth, State and Territory Acts,
regulations or other instruments subordinate to those Acts (subclause 4).
Clause 17 - Compensation -
constitutional safety-net
This
clause is a standard provision included in legislation providing for the
transfer of assets. It applies in the unlikely event that the operation of Part
2 of the Bill results in the “acquisition of property” of a third
party otherwise than on just terms. This clause provides protection to that
third party and is intended to prevent the acquisition from being invalid as a
breach of paragraph 51(xxxi) of the Constitution by making provision for
reasonable compensation to be paid by the Commonwealth to the affected party.
Affected parties can institute proceedings in the Federal Court if they can not
reach agreement with the Commonwealth on the amount of compensation (subclause
2).
Clause 18 - Application of
Legislative Instruments Act
1998
To avoid doubt, it is
proposed that an instrument made under this Part (other than a regulation under
section 20) is not to be taken to be a legislative instrument for the purposes
of the Legislative Instruments Act 1998. This means that an instrument
made under this Part is not required to be tabled in
Parliament.
Clause 19 -
Regulations
The Governor-General may
make regulations in relation to Part 2.
Part 3 - Amendments
Clause 20 -
Schedule(s)
This clause provides for
each Act referred to in a Schedule to the Bill to be amended in the manner
indicated.
Schedule 1 - Defence Re-establishment
Act 1965
Item 1 - repeals
Parts V and VA.
This item repeals
references in this Act that refer to eligibility for services and to allowances
obtainable under the Disability Services Act
1986.
Item 2 -
Saving
(1) This item protects the
entitlements of any people currently receiving programs under Parts V and VA
before the repeal of Part III of the Disability Services Act
1986.
(2) This item protects the
existing programs of people, after the repeal of Part III of the Disability
Services Act 1986, by ensuring the continuation of approved rehabilitation
programs that were in force at that
time.
Schedule 2 - Amendment of the
Disability Services Act
1986
Item 1 - amends
Part 3
This item repeals Part 3 of the
Act.
Item 2 - amends section
31(1)(cb), ending it at 14F, recognising that section 24 (item d) is to be
repealed.
Item 3 - paragraph
31(1)(d) is repealed. This refers to section 24 determinations which are to be
repealed.
Item 4 - paragraph
33(1)(d) is repealed. This refers to section 24 determinations which are to be
repealed.
Item 5 - saving. This
item protects existing clients on current programs by continuing to apply
repealed portions of this act to such clients in respect of approved
rehabilitation programs that are in force immediately prior to repeal of the
parts.
Schedule 3 - Freedom
of Information Act 1982
Item
1 - removes reference to certain subsections of the Disability Services
Act 1986 that have the effect of requiring CRS to conform to secrecy
provisions which deal with the disclosure of exempt
documents.
Schedule 4 - Hearing Services
Administration Act 1997
Item
1 - repeals paragraph 5(2)(g) and replaces it with two clauses. Clause (g)
which protects existing clients on current programs by continuing to apply
repealed portions of this Act to such clients in respect of approved
rehabilitation programs that are in force immediately prior to repeal of the
parts as described under item 5 of Schedule 2. Clause (h) recognises that
rehabilitation will still exist, (identified in the Social Security Act
1991 amendments - Item 2, Schedule 7), funded under contract by the
Commonwealth. Eligibility does not extend to services purchased under Part II
of the Disability Services Act
1986.
Schedule 5 - Income Tax
Assessment Act 1997
Item
1 - replaces rehabilitation payment with rehabilitation program which has
the same meaning as that in the Social Security Act 1991
amendments, (Item 2, Schedule 7), funded under contract by the
Commonwealth. Eligibility does not extend to services purchased under Part II
of the Disability Services Act
1986.
Schedule 6 -
Re-establishment and Employment Act
1945
Item 1 - repeals
Division 3 of Part XI. An administrative scheme being established by the
Government removes the need for these
provisions.
Item 2 Saving -
protects existing clients on current programs by continuing to apply repealed
portions of this Act to such clients in respect of approved rehabilitation
programs that are in force immediately prior to repeal of the
parts.
Schedule 7 - Social
Security Act 1991
Item 1
- repeals the current wording of paragraph 8(8)(f) and replaces it with 'a
payment made under, or the value of, any rehabilitation
program.
Item 2 - repeals
subsection 23(1) paragraph (a) and replaces it with a definition of
rehabilitation program which firstly protects the entitlements of people with
existing programs in place immediately prior to the passage of the
Commonwealth Rehabilitation Service Reform Act 1998. Secondly, it
identifies that eligibility does not extend to services provided under Part II
of the Disability Services Act 1986, but only to those services that were
provided under Part III of the Disability Services Act 1986, and which
are now provided under a contract between the provider and the
Commonwealth.
Item 3 - repeals
section 31 and replaces it with a provision that the Secretary has a discretion
to determine that a follow up program is a follow up program for the purposes of
this Act.
Item 4 - saving. This item ensures
protection of the entitlements of people with existing follow up programs in
place immediately prior to the commencement of Item
3.
Item 5 - repeals sub
paragraph 1035(b)(ii) and substitutes it with a requirement that the person is
undertaking vocational training (other than training provided as part of a
rehabilitation program).
Schedule 8 -
Veterans' Entitlements Act
1986
Item 1 - repeals
paragraph 5H(8)(m) and replaces it with a clause which identifies a payment made
under, or the value of, any rehabilitation program within the meaning of the
Social Security Act 1991.