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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FINANCIAL FRAMEWORK
LEGISLATION AMENDMENT BILL (NO. 1) 2011
EXPLANATORY MEMORANDUM
(Circulated with the authority of the
Minister for Finance and Deregulation,
Senator the Hon Penny Wong)
TABLE OF CONTENTS
Table of abbreviations and common terms .......................................................... iii
I. GENERAL OUTLINE .......................................................................................... 1
Main features of the FFLA Bill 2011 ................................................................... 1
Financial Impact Statement................................................................................... 2
II. NOTES ON CLAUSES ....................................................................................... 3
Clause 1: Short title............................................................................................... 3
Clause 2: Commencement .................................................................................... 3
Clause 3: Schedules .............................................................................................. 4
III. OVERVIEW OF AMENDMENTS IN SCHEDULES .................................... 5
Schedule 1 - Amending the Commonwealth Authorities and Companies
Act 1997.. .............................................................................................................. 5
Schedule 2 - Amending the Financial Management and Accountability
Act 1997.... ............................................................................................................ 5
Schedule 3 - Amending the Legislative Instruments Act 2003............................. 5
Schedule 4 - Amending the Primary Industries (Excise) Levies Act 1999 .......... 5
Schedule 5 - Amending the Renewable Energy (Electricity) Act 2000................ 6
Schedule 6 - Amending the Science and Industry Research Act 1949................. 6
Schedule 7 - Amending the Wheat Export Marketing Act 2008 .......................... 6
Schedule 8 - Amending the Wine Australia Corporation Act 1980 ..................... 6
IV. NOTES ON SCHEDULE 1 - Amending the Commonwealth Authorities
and Companies Act 1997 ........................................................................................... 7
Corporate plan of a Commonwealth authority that is a Government Business
Enterprise (GBE) .................................................................................................. 7
Corporate plan of a Commonwealth company that is a GBE ............................... 7
Application............................................................................................................ 8
V. NOTES ON SCHEDULE 2 - Amending the Financial Management and
Accountability Act 1997 ............................................................................................. 9
Sunsetting and disallowance of Special Account determinations ......................... 9
Auditor-General is the external auditor of an FMA Act agency ......................... 10
Chief Executive's instructions are legislative instruments ................................. 10
Guidelines authorised by regulations are legislative instruments ....................... 10
VI. NOTES ON SCHEDULE 3 - Amending the Legislative Instruments
Act 2003.. .................................................................................................................. 12
Legislative instruments not subject to the disallowance process under the
Legislative Instruments Act ................................................................................ 12
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) i
Legislative instruments not subject to the sunsetting process under the
Legislative Instruments Act ................................................................................ 13
VII. NOTES ON SCHEDULE 4 - Amending the Primary Industries
(Excise) Levies Act 1999 .......................................................................................... 15
Repeal of a redundant definition ......................................................................... 15
VIII. NOTES ON SCHEDULE 5 - Amending the Renewable Energy
(Electricity) Act 2000 ............................................................................................... 16
Update of an organisational name....................................................................... 16
Application.......................................................................................................... 16
IX. NOTES ON SCHEDULE 6 - Amending the Science and Industry
Research Act 1949.................................................................................................... 17
Technical amendments (removing a subsection reference and correcting the
structure of a paragraph) ..................................................................................... 17
Repeal of a redundant paragraph ........................................................................ 17
Application.......................................................................................................... 18
X. NOTES ON SCHEDULE 7 - Amending the Wheat Export Marketing
Act 2008.. .................................................................................................................. 19
Credits to the Wheat Exports Australia Special Account ................................... 19
Application.......................................................................................................... 19
XI. NOTES ON SCHEDULE 8 - Amending the Wine Australia Corporation
Act 1980 .................................................................................................................... 20
Provision of annual operational plans to the Minister ........................................ 20
Term of office for Geographical Indications Committee members .................... 20
Application.......................................................................................................... 21
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) ii
Table of abbreviations and common terms
Abbreviation or Full term or description
common term
ABARE The former Australian Bureau of Agriculture and Resource
Economics
ABARES Australian Bureau of Agricultural and Resource Economics
and Sciences, which encompasses the former ABARE and the
`Bureau of Rural Sciences'
CAC Act Commonwealth Authorities and Companies Act 1997
CAC Regulations Commonwealth Authorities and Companies Regulations 1997
Chief Executive Chief Executive, for a prescribed Financial Management and
Accountability Act 1997 (FMA Act) Agency under the
Financial Management and Accountability Regulations 1997,
means the person identified by the regulations as the Chief
Executive of the Agency, or, for any other FMA Act Agency,
means the person who is the Secretary of the Agency for the
purposes of the Public Service Act 1999 or the Parliamentary
Service Act 1999
Commonwealth authority Body corporate that is established by Commonwealth
legislation for a public purpose, and which holds money on its
own account (as defined in the CAC Act)
Commonwealth company Company registered under the Corporations Act 2001 that the
Commonwealth controls (as defined in the CAC Act)
CSIRO Commonwealth Scientific and Industrial Research
Organisation
CSIRO Act Science and Industry Research Act 1949
Electricity Act Renewable Energy (Electricity) Act 2000
Excise Levies Act Primary Industries (Excise) Levies Act 1999
FFLA Bill Financial Framework Legislation Amendment Bill
Finance Minister The Minister who administers the Financial Management and
Accountability Act 1997
FMA Act Financial Management and Accountability Act 1997
FMA Regulations Financial Management and Accountability Regulations 1997
GBE Government Business Enterprise
Item An item of a Schedule of the FFLA Bill
Legislative Instruments Act Legislative Instruments Act 2003
Wheat Act Wheat Export Marketing Act 2008
Wheat Special Account Wheat Exports Australia Special Account
Wine Act Wine Australia Corporation Act 1980
Wine Australia Wine Australia Corporation
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) iii
Financial Framework Legislation
Amendment Bill (No. 1) 2011
I. GENERAL OUTLINE
Main features of the FFLA Bill 2011
1. The Financial Framework Legislation Amendment Bill (No. 1) 2011
(FFLA Bill 2011) would, if enacted, amend 8 Acts across 5 portfolios to clarify the
Commonwealth's financial framework and amend the governance and financial
arrangements of existing government bodies, among other related measures.
2. Specifically, the FFLA Bill 2011 would:
· Improve the readability of the Commonwealth Authorities and Companies
Act 1997 (CAC Act) by moving the detail for the corporate plans of a
Government Business Enterprise (GBE) into the Commonwealth Authorities
and Companies Regulations 1997;
· Improve the readability of the Financial Management and Accountability
Act 1997 (FMA Act) by clarifying its interaction with the Legislative
Instruments Act 2003 (Legislative Instruments Act), and clarifying a
reference to the `external auditors' of FMA Act agencies as meaning a reference
to the Auditor-General; and
· Amend six other Acts to update and clarify specific provisions relating to the
Commonwealth's financial framework and governance arrangements, which
would:
o Make consequential amendments to the Legislative Instruments Act
following on from the changes to the FMA Act;
o Update the Wheat Export Marketing Act 2008 (Wheat Act) so that the
Wheat Exports Australia Special Account (Wheat Special Account)
can be credited for amounts that are consistent with the range of purposes
that allows for debiting the Wheat Special Account;
o Amend the Wine Australia Corporation Act 1980 (Wine Act) to update
the circumstances in which the Wine Australia Corporation
(Wine Australia) must provide their annual operational plan to the
responsible Minister, and clarify the term in office of a member of the
Geographical Indications Committee;
o Update a reference in the Renewable Energy (Electricity) Act 2000
(Electricity Act) to the `Australian Bureau of Agricultural and Resource
Economics and Sciences' and remove a redundant reference to this
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 1
organisation's former name in the Primary Industries (Excise) Levies Act
1999 (Excise Levies Act); and
o Repeal a redundant paragraph and make technical amendments to the
Science and Industry Research Act 1949 (CSIRO Act).
3. The FFLA Bill 2011 is the eighth Financial Framework Legislation
Amendment Bill (FFLA Bill) since 2004, and forms part of the Government's
ongoing program to address financial framework issues as they arise, and assist in
ensuring that specific provisions in existing legislation remain clear and up-to-date.
These changes have been developed in collaboration with the relevant Ministers and
their Departments.
4. Five out of eight FFLA Bills have become law, with the first and the sixth
FFLA Bills lapsing upon the prorogation of the Australian Parliament for the 2004
and 2010 federal elections. The first FFLA Bill focussed primarily on amending
legislation to reflect the creation of Special Accounts in the Financial Management
Legislation Amendment Act 1999. Later FFLA Bills, including this one, cover a
range of matters including financial management provisions, governance structures
and legislative anomalies.
Financial Impact Statement
5. The proposed amendments have no financial impact. The amendments are
aimed at improving governance arrangements for a number of FMA Act agencies and
CAC Act bodies, and may lead to productivity gains.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 2
II. NOTES ON CLAUSES
6. The structure of the Financial Framework Legislation Amendment Bill
(No. 1) 2011 (FFLA Bill 2011) comprises three clauses that then refer to
eight Schedules containing the substantive amendments to other Acts. These notes
describe the three clauses and their effect.
Clause 1: Short title
7. This clause provides that, should the FFLA Bill 2011 be enacted, it may then be
cited as the Financial Framework Legislation Amendment Act (No. 1) 2011.
Clause 2: Commencement
8. This clause provides that if the FFLA Bill 2011 is passed:
· clauses 1 to 3 will commence on the day that the FFLA Bill 2011 receives the
Royal Assent.
· items in Schedule 1 (the Commonwealth Authorities and Companies Act 1997
(CAC Act)) will commence on a single day fixed by Proclamation within
12 months from the date of Royal Assent, otherwise they will commence
12 months after the date of Royal Assent. This would allow for sufficient time
for the development of regulations under the CAC Act, and for detailed
consultations to occur with CAC Act bodies;
· items in Schedule 2 (the Financial Management and Accountability Act 1997
(FMA Act)) will commence on a day or days fixed by Proclamation within
12 months from the date of Royal Assent, otherwise they will commence
12 months after the date of Royal Assent. This would allow for sufficient time
to provide information to the Chief Executives of FMA Act agencies, and other
relevant stakeholders, of the change in authority for Special Account
determinations, Chief Executive's instructions, and guidelines, to be exempted
from sunsetting and disallowance requirements in the Legislative Instruments
Act 2003 (Legislative Instruments Act).
· items in Schedule 3 (the Legislative Instruments Act) will commence
immediately after the commencement of item 1 of Schedule 2 in the FFLA Bill
2011. This would ensure that the sunsetting and disallowance exclusions in the
Legislative Instruments Act would cease immediately after the exclusions from
sunsetting and disallowance apply, with the commencement of item 1 of
Schedule 2 in the FFLA Bill 2011 placing these arrangements in the FMA Act.
· items in Schedule 4 (Primary Industries (Excise) Levies Act 1999), and
Schedule 5 (Renewable Energy (Electricity) Act 2000) will commence on the
day that the FFLA Bill 2011 receives the Royal Assent.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 3
· items in Schedule 6 (Science and Industry Research Act 1949), Schedule 7
(Wheat Export Marketing Act 2008), and Schedule 8 (Wine Australia
Corporation Act 1980) will commence on the day after the FFLA Bill 2011
receives the Royal Assent.
Clause 3: Schedules
9. This clause provides that each Act, as specified in one of the eight Schedules to
the FFLA Bill 2011, is to be amended or repealed as set out in the applicable items in
that Schedule of the FFLA Bill 2011. It also provides that any other item in a
Schedule has effect according to its terms, which relates to provisions such as
application provisions.
10. Briefly, the Schedules in the FFLA Bill 2011, in consecutive order, would
amend the following Acts:
· Schedule 1 would amend the CAC Act;
· Schedule 2 would amend the FMA Act;
· Schedule 3 would amend the Legislative Instruments Act;
· Schedule 4 would amend the Primary Industries (Excise) Levies Act 1999
(Excise Levies Act);
· Schedule 5 would amend the Renewable Energy (Electricity) Act 2000
(Electricity Act);
· Schedule 6 would amend the Science and Industry Research Act 1949
(CSIRO Act);
· Schedule 7 would amend the Wheat Export Marketing Act 2008
(Wheat Act); and
· Schedule 8 would amend the Wine Australia Corporation Act 1980
(Wine Act).
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 4
III. OVERVIEW OF AMENDMENTS IN SCHEDULES
11. The following overview of amendments proposed in Schedules 1 - 8 of the
Bill is provided in general terms, rather than by item number. Parts IV - X of this
Explanatory Memorandum contain a description of the Schedules of the Bill,
organised by item number.
Schedule 1 - Amending the Commonwealth Authorities and Companies
Act 1997
12. Schedule 1 amends the Commonwealth Authorities and Companies Act 1997
(CAC Act) to provide that the content requirements of a Government Business
Enterprise's corporate plan are to be specified in regulations, rather than in the
CAC Act.
Schedule 2 - Amending the Financial Management and Accountability
Act 1997....
13. Schedule 2 amends the Financial Management and Accountability Act 1997
(FMA Act) to move various matters from the Legislative Instruments Act 2003
(Legislative Instruments Act) into the FMA Act regarding the sunsetting and
disallowance arrangements of various legislative instruments (such as determinations,
instructions, and guidelines issued under the FMA Act or under its regulations).
Schedule 2 also includes an amendment to the FMA Act to clarify that the external
auditor of an FMA Act agency is the Auditor-General.
Schedule 3 - Amending the Legislative Instruments Act 2003
14. Schedule 3 amends the Legislative Instruments Act to remove existing
exemptions to the sunsetting and disallowance provisions within the Legislative
Instruments Act that will be made redundant by the proposed amendments to move
those arrangements into the FMA Act, as contained in Schedule 2 of the
FFLA Bill 2011.
Schedule 4 - Amending the Primary Industries (Excise) Levies Act 1999
15. Schedule 4 amends the Primary Industries (Excise) Levies Act 1999
(Excise Levies Act) to repeal a redundant definition within Schedule 6 of the
Excise Levies Act to the `Australian Bureau of Agriculture and Resource Economics'
(ABARE).
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 5
Schedule 5 - Amending the Renewable Energy (Electricity) Act 2000
16. Schedule 5 amends the Renewable Energy (Electricity) Act 2000
(Electricity Act), to remove the reference to ABARE in the Electricity Act, and
makes reference, instead, to the current name, which is `Australian Bureau of
Agricultural and Resource Economics and Sciences' (ABARES).
Schedule 6 - Amending the Science and Industry Research Act 1949
17. Schedule 6 amends the Science and Industry Research Act 1949 (CSIRO Act)
to repeal a redundant paragraph in the CSIRO Act requiring the annual report of the
Commonwealth Scientific and Industrial Research Organisation (CSIRO) to include
any policies notified by the Minister under section 28 of the CAC Act.
This paragraph is now redundant due to laws that already require any policies notified
by the Minister to be included in CSIRO's annual report. Schedule 6 also seeks to
make technical amendments to section 51 of the CSIRO Act, to improve the ease in
which the provision can be read and understood.
Schedule 7 - Amending the Wheat Export Marketing Act 2008
18. Schedule 7 amends the Wheat Export Marketing Act 2008 so that the
Wheat Exports Australia Special Account (Wheat Special Account) can be credited
for amounts that are consistent with the range of purposes that allows for debiting the
Wheat Special Account.
Schedule 8 - Amending the Wine Australia Corporation Act 1980
19. Schedule 8 amends the Wine Australia Corporation Act 1980 to update the
circumstances in which the Wine Australia Corporation (Wine Australia) must
provide the responsible Minister with a copy of the Wine Australia's annual
operational plan. Schedule 8 also makes the appointment of any member of the
Geographical Indications Committee for a fixed period not exceeding 3 years.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 6
IV. NOTES ON SCHEDULE 1 - Amending the
Commonwealth Authorities and Companies
Act 1997
20. This Schedule seeks to improve the readability of the Commonwealth
Authorities and Companies Act 1997 (CAC Act) by moving particular operational
provisions into the Commonwealth Authorities and Companies Regulations 1997
(CAC Regulations).
21. An explanation of the amendments proposed in Schedule 1 is provided in
sequential order.
Corporate plan of a Commonwealth authority that is a Government
Business Enterprise (GBE)
22. Item 1 amends subsection 17(4) of the CAC Act to provide that, if a
Commonwealth authority GBE has subsidiaries, the corporate plan of that authority
must include details for each subsidiary of the matters specified by the
CAC Regulations, where applicable, rather than specified under subsection 17(6).
23. Item 2 replaces subsection 17(6) of the CAC Act, which sets out the matters
that must be detailed in the corporate plan for a Commonwealth authority GBE.
This item inserts a new subsection that enables the matters that the corporate plan for
a Commonwealth authority GBE must include (where those matters apply) to be
specified in the CAC Regulations. Transferring the content requirements of a
Commonwealth authority GBE's corporate plan from the CAC Act to the
CAC Regulations allows the content requirements to be consolidated in one place,
and enables the CAC Act to be read more easily.
24. As a result of the amendment to subsection 17(6) of the CAC Act by item 2,
item 3 makes a consequential amendment to subsection 17(7) of the CAC Act to
provide that the corporate plan of a Commonwealth authority GBE must also cover
other matters required by the responsible Minister, which may include further details
about the matters specified in the CAC Regulations (rather than specified under
subsection 17(6) of the CAC Act).
Corporate plan of a Commonwealth company that is a GBE
25. Item 4 amends subsection 42(4) of the CAC Act to provide that, if a
Commonwealth company GBE has subsidiaries, the corporate plan of that company
must include details for each subsidiary of the matters specified by the
CAC Regulations, where applicable, rather than specified under subsection 42(6).
26. Item 5 replaces subsection 42(6) of the CAC Act, which sets out the matters
that must be detailed in the corporate plan for a Commonwealth company GBE.
This item inserts a new subsection that enables the matters that the corporate plan for
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 7
a Commonwealth company GBE must include (where those matters apply) to be
specified in the CAC Regulations. Transferring the content requirements of a
Commonwealth company GBE's corporate plan from the CAC Act to the
CAC Regulations allows the content requirements to be consolidated in one place,
and enables the CAC Act to be read more easily.
27. As a result of the amendment to subsection 42(6) of the CAC Act by item 5,
item 6 makes a consequential amendment to subsection 42(7) of the CAC Act to
provide that the corporate plan of a Commonwealth company GBE must also cover
other matters required by the responsible Minister, which may include further details
about the matters specified in the CAC Regulations (rather than specified under
subsection 42(6) of the CAC Act).
Application
28. Item 7 provides that the amendments made by items 1 to 6 apply to corporate
plans prepared on or after the commencement of item 7. As noted in paragraph 8 of
this Explanatory Memorandum, item 7 will commence on the same day that
items 1 to 6 commence.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 8
V. NOTES ON SCHEDULE 2 - Amending the
Financial Management and Accountability
Act 1997
29. This Schedule seeks to improve the readability of the Financial Management
and Accountability Act 1997 (FMA Act) by clarifying its interaction with the
Legislative Instruments Act 2003 (Legislative Instruments Act), and clarifying a
reference to the `external auditors' of FMA Act agencies.
30. An explanation of the amendments proposed in Schedule 2 is provided in
sequential order.
Sunsetting and disallowance of Special Account determinations
31. Item 1 adds two additional subsections to section 20 of the FMA Act.
This would move the rules on the sunsetting and disallowance of Special Account
determinations into section 20 of the FMA Act. Currently, those rules appear in the
Legislative Instruments Act. The amendments in Schedule 3 of the Financial
Framework Legislation Amendment Bill (No. 1) 2011 will amend the Legislative
Instruments Act. The amendments in Schedules 2 and 3 allow for sunsetting and
disallowance of Special Account determination to be addressed in one place
(the FMA Act), rather than across 2 Acts.
32. The new subsection 20(6) provides that a determination to establish, revoke or
vary a Special Account under subsection 20(1) or (2) of the FMA Act is a legislative
instrument. The sunsetting requirements in Part 6 of the Legislative Instruments Act
do not apply to these determinations.
33. The note to new subsection 20(6) explains that a determination under
subsection 20(1) or (2) can be disallowed under section 22 of the FMA Act rather
than under Part 5 of the Legislative Instruments Act. Section 57 of the Legislative
Instruments Act, together with regulation 10 and Schedule 4 of the Legislative
Instruments Regulations 2004, preserve the disallowance provisions in section 22
of the FMA Act.
34. Section 22 of the FMA Act provides that a determination made by the Finance
Minister under subsection 20(1) or (2) of the FMA Act must be tabled in each House
of the Parliament, and, following a motion upon notice, either House may pass a
resolution disallowing that determination within 5 sitting days of tabling of the
determination. If neither House passes such a resolution, the determination would
take effect after those 5 sitting days have lapsed.
35. In relation to Special Account determinations under subsection 20(1) or (2)
of the FMA Act, section 22 is more protective of the review rights of the Parliament
than the regular disallowance provisions within the Legislative Instruments Act.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 9
36. The new subsection 20(7) provides that a determination to abolish a Special
Account under subsection 20(3) of the FMA Act is a legislative instrument, but is
not subject to the disallowance and sunsetting provisions in the Legislative
Instruments Act. Such an instrument is currently exempted from the disallowance
and sunsetting provisions by table item 19 of subsection 44(2) and table item 17 of
subsection 54(2) of the Legislative Instruments Act, respectively.
37. For further reference, Special Accounts are discussed further in the
Joint Committee of Public Accounts and Audit Inquiry into the Draft Financial
Framework Legislation Amendment Bill, which was tabled in the Parliament on
20 August 2003.
Auditor-General is the external auditor of an FMA Act agency
38. Item 2 amends section 46 of the FMA Act to provide that a Chief Executive
of an FMA Act agency must establish and maintain an audit committee providing a
forum for communication between the Chief Executive, the senior managers of the
agency, the internal auditors of the agency and the Auditor-General.
This amendment simply recognises that the `external auditors' of all FMA Act
agencies is the `Auditor-General', which includes any persons authorised to represent
the Auditor-General.
Chief Executive's instructions are legislative instruments
39. Item 3 would add a new subsection to the end of section 52 of the FMA Act.
New subsection 52(3) provides that a Chief Executive's instructions, issued in
accordance with the Financial Management and Accountability Regulations 1997,
are legislative instruments, but are not subject to disallowance and sunsetting under
the Legislative Instruments Act. The Chief Executive's instructions are currently
exempted from the disallowance and sunsetting provisions by table item 19 of
subsection 44(2) and table item 17 of subsection 54(2) of the Legislative
Instruments Act. Items 1 and 2 of Schedule 3 remove those exemptions from the
Legislative Instruments Act. This exemption applies because these instructions are
an internal management tool for Government (see the Explanatory Memorandum to
the Legislative Instruments Bill 2003).
Guidelines authorised by regulations are legislative instruments
40. Item 4 amends subsection 64(3) of the FMA Act to provide that a guideline
issued by a Minister on matters within the Minister's responsibility (for example, the
Commonwealth Procurement Guidelines issued by Finance Minister) is a legislative
instrument that is not subject to the disallowance or sunsetting provisions in the
Legislative Instruments Act.
41. A guideline issued under section 64 of the FMA Act is currently exempted from
the disallowance and sunsetting provisions through table item 21 of subsection 44(2)
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 10
and table item 19 of subsection 54(2) of the Legislative Instruments Act.
This exemption applies because these guidelines are an internal management tool for
Government (see the Explanatory Memorandum to the Legislative Instruments
Bill 2003). Item 4 inserts the relevant exemption from disallowance and sunsetting
in the Legislative Instruments Act into section 64 of the FMA Act. Items 1 and 2 of
Schedule 3 remove the exemptions from the Legislative Instruments Act. Such an
amendment will aid the readability of the FMA Act.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 11
VI. NOTES ON SCHEDULE 3 - Amending the
Legislative Instruments Act 2003
42. This Schedule seeks to update the Legislative Instruments Act 2003
(Legislative Instruments Act) in two ways. Firstly, it seeks to make consequential
amendments to the Legislative Instruments Act following the amendments to the
Financial Management and Accountability Act 1997 (FMA Act) contained in
Schedule 2. Secondly, Schedule 3 seeks to remove references, in two places in the
Legislative Instruments Act, to an instrument made under the FMA Act that is now
redundant.
43. An explanation of the amendments proposed in Schedule 3 is provided in
sequential order.
Legislative instruments not subject to the disallowance process under
the Legislative Instruments Act
44. Item 1 amends the table in subsection 44(2) of the Legislative Instruments Act
to repeal items 19, 20 and 21, which list legislative instruments made under the
FMA Act that are not subject to the disallowance process in the Legislative
Instruments Act.
45. The amendments in Schedule 2 to the FMA Act will establish the disallowance
exemptions for the instruments described in items 19 and 21 of the table in
subsection 44(2) in the Legislative Instruments Act. It is therefore no longer
necessary to include items 19 and 21 in the table in subsection 44(2) of the
Legislative Instruments Act. Further, item 20 of the table in subsection 44(2) refers
to an instrument that no longer exists and will also be removed.
46. Item 19 of the table in subsection 44(2) of the Legislative Instruments Act
concerns two types of instruments made under the FMA Act, which are:
· Determinations under subsection 20(3) of the FMA Act, which enable the
Finance Minister to abolish a Special Account; and
· Chief Executive's instructions made under section 52 of the FMA Act, which
enable a Chief Executive to provide instructions to officials in that Chief
Executive's agency on any matter on which regulations may be made under the
FMA Act (although, such instructions cannot create offences or impose
penalties).
47. Special Account determinations made under subsection 20(3) of the FMA Act
are not subject to the disallowance process under the Legislative Instruments Act,
as Executive control is intended to be exercised in these determinations that simply
revoke the abolition of a Special Account. As noted in the Explanatory
Memorandum for the Legislative Instruments Bill 2003, instruments made where
Executive control is intended may be exempted from disallowance.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 12
48. The Explanatory Memorandum for the Legislative Instruments Bill 2003 also
notes that instruments that operate as internal management tools for Government may
be exempted from disallowance arrangements. Chief Executive's instructions made
under section 52 of the FMA Act are an example of such internal management tools
for Government and, accordingly, are not subject to disallowance.
49. Item 20 of the table in subsection 44(2) of the Legislative Instruments Act
provides that determinations made under Order 6.2.1 of the Financial Management
and Accountability Orders 1997 (Orders) (made under section 63 of the FMA Act)
are exempt from disallowance under the Legislative Instruments Act.
These determinations formerly specified the business operations of an FMA Act
agency. However, this item is no longer required as the business operations of an
agency are no longer set out in the Orders and have instead been moved to
regulation 5A of the FMA Regulations. Written determinations under regulation 5A
are not a legislative instrument but are required to be published on the Department of
Finance and Deregulation's website as soon as practicable under
sub-regulation 5A(2).
50. Item 21 of the table in subsection 44(2) of the Legislative Instruments Act
concerns guidelines issued by Ministers under regulations. These guidelines are
made pursuant to section 64 of the FMA Act, which enables a Minister to issue
guidelines to officials for matters that can be addressed through the Financial
Management and Accountability Regulations 1997 (FMA Regulations) and which are
within the Minister's responsibility (although, such guidelines cannot create offences
or impose penalties). Instruments made where Executive control is intended may be
exempted from disallowance arrangements. Guidelines made by Ministers under
section 64 of the FMA Act another existing example of instruments where Executive
control is intended, and, consequently, are not subject to the disallowance process
outlined in the Legislative Instruments Act.
Legislative instruments not subject to the sunsetting process under the
Legislative Instruments Act
51. Item 2 amends the table in subsection 54(2) of the Legislative Instruments Act
to repeal items 17, 18, and 19, which list legislative instruments made under the
FMA Act that are not subject to the sunsetting process in the Legislative
Instruments Act.
52. The amendments in Schedule 2 to the FMA Act will establish the sunsetting
exemptions for the instruments described in items 17 and 19 of the table in
subsection 54(2) in the FMA Act. It is therefore no longer necessary to include
items 17 and 19 in the table in subsection 54(2) of the Legislative Instruments Act.
Further, item 18 of the table in subsection 54(2) refers to an instrument that no longer
exists and will also be removed.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 13
53. Item 17 of the table in subsection 54(2) of the Legislative Instruments Act
concerns exemptions from sunsetting for 2 types of instruments made under the
FMA Act, as follows:
· Special Account determinations made under subsection 20(1), (2) or (3) of the
FMA Act. These Special Account determinations are:
o Special Account determinations made under subsection 20(1), which the
Finance Minister would make to establish, allow amounts to be credited
to, and specify the purposes for debiting amounts from, a Special
Account;
o Special Account determinations made under subsection 20(2), which the
Finance Minister would make to revoke or vary a determination under
subsection 20(1); and
o Special Account determinations made under subsection 20(3), which, as
noted above, the Finance Minister would make to abolish a Special
Account established under subsection 20(1); and
· Chief Executive's instructions made under section 52 of the FMA Act, which
enable a Chief Executive to provide instructions to officials in that Chief
Executive's agency on any matter on which regulations may be made under
the FMA Act (although, such instructions cannot create offences or impose
penalties).
54. These instruments are exempt from the sunsetting process under the Legislative
Instruments Act, as they are expected to be enduring in nature (see clause 55 of the
Explanatory Memorandum for the Legislative Instruments Bill 2003).
55. Item 18 of the table in subsection 54(2) of the Legislative Instruments Act
provides that determinations made under Order 6.2.1 of the Orders are exempt from
sunsetting under the Legislative Instruments Act. The Orders formerly specified the
business operations of an FMA Act agency. However, this item is now redundant as
the business operations of an agency are no longer defined under the Orders and are
now described by regulation 5A of the FMA Regulations. As noted above, written
determinations under regulation 5A are not a legislative instrument but are required
to be published on the Department of Finance and Deregulation's website as soon as
practicable, in accordance with sub-regulation 5A(2).
56. Item 19 of the table in subsection 54(2) of the Legislative Instruments Act
concerns guidelines issued by Ministers under regulations. These guidelines are
made pursuant to section 64 of the FMA Act, which enables a Minister to provide
guidance to officials for matters that can be addressed through the Financial
Management and Accountability Regulations 1997 (FMA Regulations) and which are
within the Minister's responsibility (although, such guidelines cannot create offences
or impose penalties). These instruments are exempt from the sunsetting process
under the Legislative Instruments Act, as they are expected to be enduring in nature
(see clause 55 of the Explanatory Memorandum for the Legislative Instruments
Bill 2003).
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 14
VII. NOTES ON SCHEDULE 4 - Amending the
Primary Industries (Excise) Levies Act 1999
57. This Schedule seeks to remove a redundant reference to a former organisation's
name in the Primary Industries (Excise) Levies Act 1999 (Excise Levies Act).
58. An explanation of the amendment proposed in Schedule 4 is provided below.
Repeal of a redundant definition
59. Item 1 repeals the definition of the `Australian Bureau of Agricultural and
Resource Economics' (ABARE) at clause 1 of Schedule 6 of the Excise Levies Act.
60. ABARE is no longer in existence. In 2010, the Department of Agriculture,
Fisheries and Forestry merged two Bureaus within the Department, ABARE and the
`Bureau of Rural Sciences', to establish the `Australian Bureau of Agricultural and
Resource Economics and Sciences' (ABARES).
61. Furthermore, ABARE is not referred to elsewhere in Schedule 6 of the Excise
Levies Act, so this definition is redundant. Because of this, ABARES does not need
to be added to the definitions in Schedule 6 of the Excise Levies Act.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 15
VIII. NOTES ON SCHEDULE 5 - Amending the
Renewable Energy (Electricity) Act 2000
62. This Schedule seeks to update a reference to the `Australian Bureau of
Agricultural and Resource Economics and Sciences' (ABARES) in the Renewable
Energy (Electricity) Act 2000 (Electricity Act).
63. An explanation of the amendments proposed in Schedule 5 is provided in
sequential order.
Update of an organisational name
64. Item 1 updates paragraph 132(1)(c) of the Electricity Act to replace the
reference to the `Australian Bureau of Agriculture and Resource Economics'
(ABARE) and instead refer to the organisation that combined ABARE with the
`Bureau of Rural Sciences' in 2010; that is, ABARES.
Application
65. Item 2 clarifies that despite the amendment of paragraph 132(1)(c) of the
Electricity Act by Item 1, paragraph 132(1)(c) of the Electricity Act continues to
apply, in relation to a divulgence or communication before the commencement of
Item 1, as if the amendment at Item 1 had not been made.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 16
IX. NOTES ON SCHEDULE 6 - Amending the
Science and Industry Research Act 1949
66. This Schedule seeks to repeal a redundant paragraph and make technical
amendments to the Science and Industry Research Act 1949 (CSIRO Act).
67. An explanation of the amendments proposed in this Schedule is provided in
sequential order.
Technical amendments (removing a subsection reference and
correcting the structure of a paragraph)
68. Item 1 amends section 51 of the CSIRO Act to remove the redundant reference
number (2) that appears before the substantive text in section 51.
69. Section 51 of the CSIRO Act has not been divided into subsections since the
CSIRO Act was amended by the Audit (Transitional and Miscellaneous) Amendment
Act 1997. It appears that the continued used of this subsection number was
overlooked in that amendment.
70. Item 2 would add the word `and' to the end of each paragraph within section 51
of the CSIRO Act. This clarifies that in each annual report of the Commonwealth
Scientific and Industrial Research Organisation (CSIRO), as made under section 9
of the Commonwealth Authorities and Companies Act 1997 (CAC Act), the members
of the CSIRO Board who issue the annual report must set out all of the requirements
stated in each paragraph of section 51 of the CSIRO Act.
71. Item 3 replaces `year; and' with `year.' in paragraph 51(2)(d) of the
CSIRO Act. Item 3 is a necessary consequence of the amendment made by item 4
to repeal of paragraph 51(2)(e) of the CSIRO Act.
Repeal of a redundant paragraph
72. Item 4 repeals paragraph 51(2)(e) of the CSIRO Act, which requires that the
CSIRO's annual report must set out any policies notified by the Minister under
section 28 of the CAC Act.
73. Section 28 has been amended and policies are now applied through General
Policy Orders, rather than through being notified by the responsible Minister.
Also, other legislation already requires any policies applying to CSIRO to be
mentioned in CSIRO's annual report, specifically the CAC Act and the
Commonwealth Authorities and Companies (Report of Operations) Orders 2008.
As these rules achieve similar effects as paragraph 51(2)(e), this paragraph is
redundant.
74. Further, removing this paragraph would enable consistency with other CAC Act
bodies, as the enabling Acts of other CAC Act bodies do not specify that the annual
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 17
report of that body should include policies of the Commonwealth, given that this is
covered through the CAC Act.
Application
75. Item 5 clarifies that removal of the requirement in paragraph 51(2)(e) of the
CSIRO Act applies to CSIRO annual reports for financial years starting on or after
1 July 2011.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 18
X. NOTES ON SCHEDULE 7 - Amending the
Wheat Export Marketing Act 2008
76. This Schedule seeks to broaden the circumstances in which amounts can be
credited to the Wheat Exports Australia Special Account (Wheat Special Account)
under the Wheat Export Marketing Act 2008 (Wheat Act).
77. An explanation of the amendments proposed in Schedule 7 is provided in
sequential order.
Credits to the Wheat Exports Australia Special Account
78. Item 1 updates section 59 of the Wheat Act to require amounts equal to any
other amounts received for any purpose of the Wheat Special Account to be credited
to the Wheat Special Account. This amendment broadens the crediting clause of the
Wheat Special Account in section 59 to include amounts incidental to the operations
of Wheat Exports Australia, that is, amounts received in the course of Wheat Exports
Australia performing its ordinary functions.
79. Item 1 broadens the crediting clause of the Wheat Special Account to reflect
the purpose clause in the Wheat Special Account and to enable Wheat Exports
Australia to credit amounts to the Wheat Special Account for similar amounts that
other agencies would collect under section 31 of the FMA Act and regulation 15 of
the FMA Regulations.
80. Section 31 of the Financial Management and Accountability Act 1997
(FMA Act) enables an FMA Act agency to retain certain amounts received, by
increasing the agency's most recent departmental item in an Appropriation Act by an
amount equal to the amount received by that agency. Regulation 15 of the Financial
Management and Accountability Regulations 1997 (FMA Regulations) prescribes the
types of amounts that an FMA Act agency may credit to their most recent
departmental item.
81. Wheat Exports Australia does not receive a departmental appropriation in
annual Appropriation Acts, as this FMA Act agency is financed through levies and
amounts collected from industry, rather than a departmental appropriation. Unlike
other FMA Act agencies, Wheat Exports Australia does not have a departmental item
that may be increased to reflect amounts collected under section 31 of the FMA Act
and regulation 15 of the FMA Regulations.
Application
82. Item 2 provides that the amendment made by item 1 applies to amounts
received on or after the commencement of item 1.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 19
XI. NOTES ON SCHEDULE 8 - Amending the
Wine Australia Corporation Act 1980
83. This Schedule seeks to update the circumstances in which the Wine Australia
Corporation (Wine Australia) must provide an annual operational plan to the
responsible Minister, and to clarify the term of office of a member of the
Geographical Indications Committee in the Wine Australia Corporation
Act 1980 (Wine Act).
84. An explanation of the amendments proposed in Schedule 8 is provided in
sequential order.
Provision of annual operational plans to the Minister
85. Item 1 amends subsection 31G(1) of the Wine Act to update the circumstances
in which Wine Australia must provide the responsible Minister with a copy of Wine
Australia's annual operational plan, as prepared in accordance with section 31F of the
Wine Act.
86. The item removes the requirement regarding the provision of Wine Australia's
first annual operational plan on or before 1 October 1986, as this information is now
redundant.
87. Item 1 retains, essentially, the requirement that an annual operational plan must
be provided at least 2 months before the start of the period to which that plan relates.
88. The item also permits the responsible Minister, in exceptional circumstances, to
set another time by which Wine Australia must provide the annual operational plan
(irrespective of whether the period to which the annual operation plan relates has
commenced or not).
Term of office for Geographical Indications Committee members
89. Item 2 repeals and replaces clause 5 of the Schedule to the Wine Act to provide
that a member of Wine Australia (which includes the Chairperson) holds office for a
fixed period, as specified in their instrument of appointment. However, this period
must not exceed 3 years.
90. Currently, the Presiding Member of the Geographical Indications Committee
has a fixed term of not more than 3 years, while a member appointed by an
organisation holds office until that organisation nominates another person in place of
that member. That is, an ordinary member has no constraint on their term of office.
Item 2 ensures all Wine Australia members would not surpass 3 years in office.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 20
Application
91. Item 3 clarifies that the amendment made by item 2 applies in relation to the
appointment of a member made after the commencement of item 2.
Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011 (Winter Sittings) 21