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2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
FINANCIAL FRAMEWORK
LEGISLATION AMENDMENT BILL 2010
REVISED
EXPLANATORY MEMORANDUM
(Circulated with the authority of the
Minister for Finance and Deregulation,
Senator the Hon Penny Wong)
THIS EXPLANATORY MEMORANDUM TAKES ACCOUNT OF AMENDMENTS MADE BY
THE HOUSE OF REPRESENTATIVES TO THE BILL AS INTRODUCED
TABLE OF CONTENTS
Table of Abbreviations and Common Terms ................................................................................... v
I. GENERAL OUTLINE ................................................................................................................. 1
Main features of the FFLA Bill 2010 .......................................................................................... 1
Thematic overview ...................................................................................................................... 2
a) Repealing redundant special appropriations - provisions and Acts ......................................... 2
b) Removing redundant appropriation-related provisions ............................................................ 2
c) More expressly allowing for "interjurisdictional" agencies and authorities ............................ 2
d) Moving governmental bodies from the CAC Act to the FMA Act .......................................... 2
e) Consolidating government bodies ............................................................................................ 3
f) Clarifying the status of bodies corporate that are encompassed in FMA Act agencies ........... 3
g) Partially applied CAC Act status moved to full status as a "Commonwealth authority" ........ 4
h) Updating references to provisions of the CAC Act.................................................................. 4
i) Updating the name of a CAC Act body ................................................................................... 4
j) Providing for formal delegations under the CAC Act.............................................................. 4
k) Improved emphasis on reports to Parliament about the use of companies .............................. 4
l) Amendment to definition of "proper use" in the FMA Act ..................................................... 4
Financial Impact Statement ........................................................................................................ 5
II. NOTES ON CLAUSES............................................................................................................... 6
Part 1 - Preliminary ................................................................................................................... 6
Clause 1: Short Title ......................................................................................................................... 6
Clause 2: Commencement ................................................................................................................ 6
Clause 3: Schedules .......................................................................................................................... 6
III. OVERVIEW OF AMENDMENTS IN SCHEDULES ........................................................... 8
Schedule 1 - Amending the Australian Human Rights Commission Act 1986 ........................... 8
Schedule 2 - Amending the Australian Law Reform Commission Act 1996............................... 8
Schedule 3 - Amending the Australian Postal Corporation Act 1989 ........................................ 9
Schedule 4 - Amending the Australian Wine and Brandy Corporation Act 1980 ...................... 9
Schedule 5 - Amending the Commonwealth Authorities and Companies Act 1997 ................... 9
Schedule 6 - Amending the Competition and Consumer Act 2010 ............................................. 9
Schedule 7 - Amending the Criminology Research Act 1971 ................................................... 10
Schedule 8 - Amending the Financial Management and Accountability Act 1997 .................. 11
Schedule 9 - Amending the National Transport Commission Act 2003 ................................... 11
Schedule 10 - Amending the Parliamentary Service Act 1999 ................................................. 11
Schedule 11 - Repeals ............................................................................................................... 11
IV. NOTES ON SCHEDULE 1 - Amending the Australian Human
Rights Commission Act 1986 .......................................................................................................... 12
Part 1--Amendments ................................................................................................................ 12
Clarifying body corporate status of the Australian Human Rights Commission ........................... 12
Part 2 - Transitional provisions ............................................................................................... 12
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) i
Property held by the Commission ................................................................................................... 12
V. NOTES ON SCHEDULE 2 - Amending the Australian Law
Reform Commission Act 1996 ........................................................................................................ 13
Part 1--Amendments ................................................................................................................ 13
Definitions ...................................................................................................................................... 13
Establishment and constitution of the Law Reform Commission .................................................. 14
Appointment of members ............................................................................................................... 14
Acting appointments ....................................................................................................................... 15
Remuneration and allowances ........................................................................................................ 15
Termination of appointments and resignation ................................................................................ 15
Leave of absence for full-time members ........................................................................................ 16
How the Law Reform Commission is to perform its functions ...................................................... 16
Law Reform Commission to comply with certain requirements and directions ............................ 16
Management structure..................................................................................................................... 17
Meetings of the Law Reform Commission ..................................................................................... 17
Members must disclose certain interests ........................................................................................ 18
Divisions of the ALRC ................................................................................................................... 18
Staff and consultants ....................................................................................................................... 18
Finance ............................................................................................................................................ 19
Protection from civil actions ........................................................................................................... 19
Part 2--Transitional Provisions ............................................................................................... 19
Application of subsection 9(1) amendment .................................................................................... 19
Law Reform Commission and Board ............................................................................................. 19
Employees ....................................................................................................................................... 19
Vesting of property, money and financial liabilities....................................................................... 20
Instruments relating to transferred assets and liabilities ................................................................. 20
Exemptions from stamp duty and other State or Territory taxes .................................................... 20
Proceedings ..................................................................................................................................... 20
Contracts ......................................................................................................................................... 20
Appropriations ................................................................................................................................ 20
Reports ............................................................................................................................................ 20
Regulations ..................................................................................................................................... 20
VI. NOTES ON SCHEDULE 3 - Amending the Australian Postal Corporation Act 1989 ...... 21
Government obligations of Australia Post ...................................................................................... 21
Corporate plans ............................................................................................................................... 21
Annual reports................................................................................................................................. 21
Costs of complying with General Policy Orders ............................................................................ 21
Government directions .................................................................................................................... 21
VII. NOTES ON SCHEDULE 4 - Amending the Australian Wine and Brandy Corporation
Act 1980 ........................................................................................................................................... 22
Part 1 - Amending the Australian Wine and Brandy Corporation Act 1980 ........................... 22
Amending the name of the Australian Wine and Brandy Corporation........................................... 22
Part 2 - Consequential Amendments ........................................................................................ 22
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) ii
VIII. NOTES ON SCHEDULE 5 - Amending the Commonwealth Authorities and Companies
Act 1997 ........................................................................................................................................... 23
Definition of "general law"............................................................................................................. 23
Annual reports of Commonwealth authorities ................................................................................ 23
Commonwealth authority to notify the responsible Minister of significant events ........................ 23
Finance Minister's delegation power .............................................................................................. 23
References to common law and equity ........................................................................................... 23
Interjurisdictional authorities .......................................................................................................... 24
Wholly-owned Commonwealth company to notify the responsible Minister of significant events24
Minister to notify Parliament where the Commonwealth's involvement with a company changes25
Compliance with government procurement requirements .............................................................. 25
General Policy Orders ..................................................................................................................... 25
Delegation by Ministers of specific functions to Departmental Secretaries ................................... 26
XIII. NOTES ON SCHEDULE 6 - Amending the Competition and Consumer Act 2010........ 27
Part 1 - Amendments ................................................................................................................ 27
Clarifying the body corporate status of the Australian Competition and Consumer Commission. 27
Part 2 - Transitional Provisions ............................................................................................... 27
IX. NOTES ON SCHEDULE 7 - Amending the Criminology Research Act 1971 ................... 28
Part 1 - Amendments ................................................................................................................ 28
Definitions ...................................................................................................................................... 28
Status of Institute ............................................................................................................................ 28
Functions of Institute ...................................................................................................................... 28
Functions of Director ...................................................................................................................... 29
Staff of the Institute ........................................................................................................................ 30
Repeal of Division 4 of Part II ........................................................................................................ 30
Repeal of Parts III and IV ............................................................................................................... 30
Criminology Research Advisory Council ....................................................................................... 30
Repeal of section 50 ........................................................................................................................ 31
Criminology Research Special Account ......................................................................................... 31
Institute may charge for services .................................................................................................... 31
Delegation by Director.................................................................................................................... 31
Annual Report ................................................................................................................................. 32
Part 2 - Transitional Provisions ............................................................................................... 32
Institute and Board .......................................................................................................................... 32
Employees ....................................................................................................................................... 32
Vesting of property and money ...................................................................................................... 32
Vesting of financial liabilities ......................................................................................................... 32
Instruments relating to the transferred assets and liabilities ........................................................... 32
Exemption from stamp duty and other State and Territory taxes ................................................... 33
Proceedings ..................................................................................................................................... 33
Contracts ......................................................................................................................................... 33
Appropriations ................................................................................................................................ 33
Reports ............................................................................................................................................ 33
Regulations ..................................................................................................................................... 33
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) iii
X. NOTES ON SCHEDULE 8 - Amending the Financial Management and Accountability
Act 1997 ........................................................................................................................................... 34
Updating section headings and notes .............................................................................................. 34
Movement to the FMA Act of requirement for Ministers to inform Parliament about involvement
with companies by their Departments, agencies and certain bodies corporate .............................. 34
Regulations to improve transparency of "interjurisdictional agencies" ......................................... 35
Clarifying "proper use" of Commonwealth resources .................................................................... 36
Delegations not extending to requirement to report involvement in companies to Parliament ...... 36
XI. NOTES ON SCHEDULE 9 - Amending the National Transport Commission Act 2003 ... 37
XII. NOTES ON SCHEDULE 10 - Amending the Parliamentary Service Act 1999 ................ 38
XIV. NOTES ON SCHEDULE 11 - Repeals............................................................................... 39
Part 1 - Acts Repealed .............................................................................................................. 39
Appropriation (Dr Carmen Lawrence's Legal Costs) Act 1999-2000................................ 39
Appropriation (HIH Assistance) Act 2001 .......................................................................... 39
Appropriation (Supplementary Measures) Act (No. 1) 1999 .............................................. 39
Appropriation (Supplementary Measures) Act (No. 2) 1999 .............................................. 39
Growth Centres (Financial Assistance) Act 1973 ............................................................... 39
Land Commissions (Financial Assistance) Act 1973 .......................................................... 39
Part 2 - Provisions repealed .................................................................................................... 39
Aboriginal and Torres Strait Islander Act 2005 (Part 4B) ................................................. 40
Aged Care or Disabled Persons Act 1954 (section 10KA)................................................. 40
Appropriation (Development Bank) Act 1975 (subsection 3(2)) ........................................ 40
CFM Sale Act 1996 (subsection 56(2)) ............................................................................... 40
Commonwealth Funds Management Limited Act 1990 (subsections 7(2) and 8(2)) .......... 40
CSL Sale Act 1993 (subsections 29(2) and 50(2)) .............................................................. 40
Hearing Services and AGHS Reform Act 1997 (Division 3 of Part 2)................................ 40
Qantas Sale Act 1992 (section 18 and subsections 45(2), 46(1) and 46(2)) ....................... 41
Snowy Mountains Engineering Corporation Limited Sale Act 1993 (section 41) .............. 41
Student Assistance Act 1973 (subsection 3(1), sections 12M and 12N, and paragraphs
56(1)(d) and 56(1)(f)).......................................................................................................... 41
Telstra Corporation Act 1991 (sections 8AL and 8AS) ..................................................... 41
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) iv
Table of Abbreviations and Common Terms
Abbreviation or common term Full term or description
ACCC Australian Competition and Consumer Commission
Acts Interpretation Act Acts Interpretation Act 1901
AHRC Australian Human Rights Commission
AHRC Act Australian Human Rights Commission Act 1986
AIC Australian Institute of Criminology
ALRC Act Australian Law Reform Commission Act 1996
Australia Post Australian Postal Corporation
Australia Post Act Australian Postal Corporation Act 1989
AWBC Australian Wine and Brandy Corporation
AWBC Act Australian Wine and Brandy Corporation Act 1980
CAC Act Commonwealth Authorities and Companies Act 1997
CAC Regulations Commonwealth Authorities and Companies Regulations 1997
Commonwealth authority Bodies corporate that are established by Commonwealth legislation
for a public purpose, and which hold money on their own account.
Commonwealth company Companies registered under the Corporations Act which the
Commonwealth controls.
Corporations Act Corporations Act 2001
CRC Criminology Research Council
CR Act Criminology Research Act 1971
CR Advisory Council Criminology Research Advisory Council
CR Special Account Criminology Research Special Account
CRF Consolidated Revenue Fund
FFLA Bill Financial Framework Legislation Amendment Bill
Finance Department of Finance and Deregulation
Finance Minister Minister for Finance and Deregulation
Flipchart of Australian Flipchart of FMA Act Agencies and CAC Act bodies, Department of
Government Bodies Finance and Deregulation, updated regularly on Finance website
FMA Act Financial Management and Accountability Act 1997
FMA Regulations Financial Management and Accountability Regulations 1997
FMLA Act 1999 Financial Management Legislation Amendment Act 1999
FOI Act Freedom of Information Act 1982
Governance Policy Governance Arrangements for Australian Government Bodies,
August 2005
Item An item of a Schedule of the FFLA Bill
Law Reform Commission Australian Law Reform Commission
LI Act Legislative Instruments Act 2003
List of Australian Government List of Australian Government Bodies and Governance
Bodies and Governance Relationships as at 1 October 2009, Department of Finance and
Relationships Deregulation
NTC National Transport Commission
NTC Act National Transport Commission Act 2003
OHS Act Occupational Health and Safety (Commonwealth Employment)
Act 1991
Parliamentary Service Act Parliamentary Service Act 1999
Public Service Act Public Service Act 1999
SRC Act Safety, Rehabilitation and Compensation Act 1988
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) v
Financial Framework Legislation Amendment
Bill 2010
I. GENERAL OUTLINE
Main features of the FFLA Bill 2010
1. The Financial Framework Legislation Amendment Bill 2010 (FFLA Bill 2010) would, if
passed, affect 31 Acts through amendments to 25 Acts and the repeal of 6 Acts.
2. There are three main purposes of the proposed amendments.
· First, to repeal 20 redundant special appropriations, including 6 redundant Acts and a
statutory Special Account, as well as other redundant legislation relating to the
Commonwealth's financial framework. This is consistent with the Government's response in
December 2008 to former Senator Andrew Murray's report, Operation Sunlight -
Overhauling Budgetary Transparency (specifically recommendation 12), which committed
to a regular review of special appropriations and maintaining effective legislative
housekeeping is also consistent with the Government's Better Regulation Agenda;
· Second, to establish improved governance arrangements for interjurisdictional agencies
under the Financial Management and Accountability Act 1997 (FMA Act) and
interjurisdictional Commonwealth authorities under the Commonwealth Authorities and
Companies Act 1997 (CAC Act), while also clarifying some minor anomalies in those Acts;
and
· Third, to improve financial and governance arrangements for existing bodies, consistent
with the Governance Arrangements for Australian Government Bodies policy (Governance
Policy), as published by the then Department of Finance and Administration in August 2005.
In particular, the Bill would integrate the Australian Institute of Criminology (AIC) and the
Criminology Research Council (CRC), and transfer them from governance under the
CAC Act to the FMA Act. Next, the Bill would transfer the governance of the Australian
Law Reform Commission (Law Reform Commission) from the CAC Act to the FMA Act.
The Bill would also bring the National Transport Commission (NTC) under the CAC Act.
Changes for the 4 bodies, covered by these 3 changes, are proposed to commence from
1 July 2011, to align with the commencement of the financial years. Finally, the Bill would
abolish the Office of Evaluation and Audit (Indigenous Programs), as that function has been
successfully absorbed into the Australian National Audit Office.
3. This is the seventh FFLA Bill since 2004, as part of an ongoing approach to maintaining the
Australian Government's financial framework. Four of those Bills became 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 was re-introduced and passed after the 2004 election,
and this Bill represents the re-introduction of the FFLA Bill originally introduced into the House of
Representatives on 23 June 2010.
4. The first FFLA Bill focussed primarily on implementing text changes to reflect the creation
of Special Accounts, from 1 July 1999, in deeming provisions that were in the Financial
Management Legislation Amendment Act 1999 (FMLA Act 1999). Later FFLA Bills, including this
one, cover a range of issues dealing with appropriations (including Special Accounts), financial
management provisions, governance structures and legislative anomalies.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 1
Thematic overview
5. This FFLA Bill 2010 covers a wide range of governance and accountability issues, which can
be summarised under the following 11 subthemes.
a) Repealing redundant special appropriations - provisions and Acts
6. Schedule 11 to the FFLA Bill 2010 would, if enacted, repeal 20 special appropriations,
including 6 Acts and a statutory Special Account. As mentioned above, this is consistent with the
Government's response, in December 2008, to former Senator Andrew Murray's report, Operation
Sunlight - Overhauling Budgetary Transparency (specifically recommendation 12), which
committed to a regular review of special appropriations.
b) Removing redundant appropriation-related provisions
7. Schedule 10 covers amendments to the Parliamentary Service Act 1999 that clarify how the
Presiding Officers may make payments in special circumstances. This change is consistent to
changes made to similar provisions in the FMA Act and the Public Service Act 1999 that were
amended in the FFLA Act 2007. In short, the provisions need updating to take account of changes
made to outcomes appropriations from 1 July 1999.
8. Schedule 8 covers amendments to the FMA Act, including removal of a note regarding the
effect of the FMLA Act 1999 (covering the introduction of "Special Accounts", which replaced
former "components" of two statutory "Funds"). The text in numerous Acts was corrected by the
FFLA Act 2005 and the FFLA Act 2006, so there is no longer any need for a note to refer to a
deeming provision on Special Accounts that appears in the FMLA Act 1999.
c) More expressly allowing for "interjurisdictional" agencies and authorities
9. Schedule 5 covers several amendments to the CAC Act, including allowing for regulations to
establish better governance arrangements for interjurisdictional authorities under the CAC Act.
10. Schedule 8 covers amendments to the FMA Act, including allowing for regulations to
establish better governance arrangements for interjurisdictional FMA Act agencies.
d) Moving governmental bodies from the CAC Act to the FMA Act
11. Schedule 7 covers amendments to the Criminology Research Act 1971 to facilitate the
Australian Institute of Criminology (AIC) and the Criminology Research Council (CRC) to be
moved from the CAC Act to be regulated by the FMA Act (as well as consolidated into a single
agency). Similarly, Schedule 2 covers amendments to the Australian Law Reform Commission
Act 1996, to transfer the governance of the Law Reform Commission from the CAC Act to the
FMA Act.
12. The transfer of the governance arrangements of these 3 CAC Act bodies is consistent with
the transfer of governance arrangements of a number of other CAC Act bodies to the FMA Act in
recent years. The List of Australian Government Bodies and Governance Relationships as at
1 October 2009 lists 15 bodies that moved from the CAC Act to the FMA Act between
31 December 2004 and 1 October 2009 at p xii. Examples include:
· Medicare Australia (formerly under the CAC Act as the Health Insurance Commission),
moved on 1 October 2005 to the FMA Act through the Human Services Legislation
Amendment Act 2005;
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 2
· The Australian Securities and Investments Commission, the Australian Prudential Regulation
Authority and the Corporations and Markets Advisory Committee, moved on 1 July 2007 to
the FMA Act, through the Governance Review Implementation (Treasury Portfolio Agencies)
Act 2007;
· The Great Barrier Marine Park Authority also moved from the CAC Act to the FMA Act on
1 July 2007, through the Great Barrier Marine Park Amendment Act 2007; and
· The Australian Fisheries Management Authority moved, on 1 July 2008, from the CAC Act to
the FMA Act through the Fisheries Legislation Amendment (New Governance Arrangements
for the Australian Fisheries Management Authority and Other Matters) Act 2008.
e) Consolidating government bodies
13. As mentioned above, Schedule 7 covers amendments to the Criminology Research Act 1971
to facilitate not only the move of the AIC and the CRC to the FMA Act, but also their consolidation
into a single agency.
14. Similarly, Schedule 11 repeals Part 4B of the Aboriginal and Torres Strait Islander Act 2005,
which would abolish the Office of Evaluation and Audit (Indigenous Programs). The function of
the Office has been transferred from the Department of Finance and Deregulation to the Australian
National Audit Office.
f) Clarifying the status of bodies corporate that are encompassed in FMA Act
agencies
15. Schedule 1 covers amendments to the Australian Human Rights Commission Act 1986,
which clarify the body corporate status of the Australian Human Rights Commission (AHRC) under
the FMA Act. Similarly, Schedule 6 covers amendments to the Competition and Consumer Act
2010,1 to clarify the body corporate status of the Australian Competition and Consumer
Commission under the FMA Act. It has long-been recognised that some bodies corporate
established through legislation for specific government purposes may legally separate from the
body politic of the Commonwealth of Australia without being financially separate. Accordingly,
the expenditure by those bodies would be directly governed by appropriations provided by the
Parliament.
16. For example, in 1923 the High Court of Australia examined the status of a body corporate,
called the Repatriation Commission, in relation to its status for the purposes of the immunities of
the Crown. As stated in the joint judgment of Knox CJ and Starke J:
The provisions of the Act taken generally ... establish that the Commission is in the strictest sense a
department of Government, or at all events so practically identified with it as to be indistinguishable.
It is a statutory corporation charged with the administration of an Act designed to carry out two
objects which are peculiarly within the province of the Government ... . Adopting the words of
O'Connor J. in Sydney Harbour Trust Commissioners v. Wailes ..., it is "a corporation ... to which is
handed over the administration of what is really a Government department." If so, the Commission is
entitled, in our opinion, in respect of the property vested in it pursuant to the Act, to the same
privileges and immunities as the Crown itself would have had if the property had been vested in it:
Repatriation Commission v Kirkland (1923) 32 CLR 1 at page 8.
1
From 1 January 2011, the Trade Practices Act 1974 is to be re-named the Competition and Consumer Act 2010. The
FFLA Bill is not expected to enter into law prior to that date.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 3
17. This FFLA Bill 2010 helps to clarify the status of two bodies corporate that are clearly
financially part of the Commonwealth, even though it has not necessarily been directly obvious
from their primary legislation.
g) Partially applied CAC Act status moved to full status as a "Commonwealth
authority"
18. Schedule 9 would amend the National Transport Commission Act 2003 to ensure that the
CAC Act applies to the National Transport Commission as a full Commonwealth authority.
19. Simplifying governance structures by placing government activities under recognised aspects
of the financial framework accords with the Government's Governance Policy and is also consistent
with the amendment made under the Financial Framework Legislation Amendment Act 2008 that
transferred the Albury-Wodonga Development Corporation to governance under the CAC Act from
1 July 2009.
h) Updating references to provisions of the CAC Act
20. Schedule 3 covers amendments to the Australian Postal Corporation Act 1989 (Australia
Post Act), to update cross-references which that Act makes to the CAC Act. These updates are
required following the passage of amendments made (through the Commonwealth Authorities and
Companies Amendment Act 2008) to consultation over, and the notification of, general policies of
the Government. The amendments would realign Australia Post's obligations to comply with
General Policy Orders under the CAC Act and to report on compliance with those requirements;
i) Updating the name of a CAC Act body
21. Schedule 4 covers amendments to the Australian Wine and Brandy Corporation Act 1980
(AWBC Act), to rename a CAC Act body, the "Australian Wine and Brandy Corporation" as "Wine
Australia Corporation". This is consistent with international branding of the body as "Wine
Australia".
j) Providing for formal delegations under the CAC Act
22. Schedule 5 covers several amendments to the CAC Act, including simplifying the financial
framework by allowing Ministers to formally delegate certain of their oversight functions and
powers under the Act to Departmental Secretaries.
k) Improved emphasis on reports to Parliament about the use of companies
23. Schedule 5, amending the CAC Act, and Schedule 8, amending the FMA Act, are structured
to commence amendments simultaneously to allow for the movement of section 45 of the CAC Act
to proposed section 39A of the FMA Act in relation to improved processes for reporting on the
Commonwealth's involvement in the formation or otherwise of companies.
l) Amendment to definition of "proper use" in the FMA Act
24. Schedule 8 amends the definition of "proper use" of Commonwealth resources in
subsection 44(3) of the FMA Act to explicitly include "economical" use.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 4
Financial Impact Statement
25. The proposed amendments have no financial impact. The amendments are aimed at repealing
redundant special appropriations, establishing interjurisdictional governance arrangements under
the CAC Act and FMA Act, and improving the financial and governance arrangements for existing
bodies, ensuring that they are fit for purpose and consistent with the Government's Governance
Arrangements for Australian Government Bodies policy. The special appropriations that are
included for the Law Reform Commission and the AIC reflect their existing financial arrangements
as CAC Act bodies, without having a financial impact when they transfer to the FMA Act.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 5
II. NOTES ON CLAUSES
26. The structure of the Financial Framework Legislation Amendment Bill 2010
(FFLA Bill 2010) comprises 3 clauses that then refer to 11 Schedules containing the substantive
amendments to other Acts. These notes describe the 3 clauses and their effect.
Part 1 - Preliminary
Clause 1: Short Title
27. This clause provides that, should the FFLA Bill 2010 be enacted, the FFLA Bill may then be
cited as the Financial Framework Legislation Amendment Act 2010.
Clause 2: Commencement
28. This clause provides that:
· items in Schedules 1 (Australian Human Rights Commission), 3 (Australia Post),
4 (Australian Wine and Brandy Corporation), 6 (Australian Competition and Consumer
Commission), 10 (Parliamentary Service Act), and 11 (Repeals) in the FFLA Bill 2010 will,
if passed, commence on the day after the Financial Framework Legislation Amendment
Act 2010 receives the Royal Assent;
· items in Schedule 5 (the Commonwealth Authorities and Companies Act 1997 (CAC Act))
will, if passed, 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 subordinate laws under
the CAC Act and the Financial Management and Accountability Act 1997 (FMA Act), and
for detailed consultations to occur with CAC Act bodies and FMA Act agencies;
· items in Schedule 8 (FMA Act) will, if passed, commence on the same day as changes made
by Schedule 5, which allows in particular for the contemporaneous commencement of the
proposed section 39A of the FMA Act and the repeal of section 45 of the CAC Act; and
· items in Schedules 2 (Australian Law Reform Commission), 7 (Australian Institute of
Criminology and the Criminology Research Council) and 9 (National Transport
Commission) in the FFLA Bill 2010 will, if passed, commence on 1 July 2011 to align with
the start of the financial year of these bodies.
Clause 3: Schedules
29. This clause provides that the amendments and repeals of Acts are contained in 11 Schedules.
Briefly, the Schedules, in consecutive order, cover the following issues:
· Schedule 1 amends the Australian Human Rights Commission Act 1986, to clarify the body
corporate status of the Australian Human Rights Commission;
· Schedule 2 amends the Australian Law Reform Commission Act 1996, and transfers the
governance of the Australian Law Reform Commission from the CAC Act to the FMA Act.
The proposed amendments include the establishment of a single broad purpose Special
Account, allowing the Commission to maintain flexible financial arrangements consistent
with the FMA Act;
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 6
· Schedule 3 amends the Australian Postal Corporation Act 1989 (Australia Post Act), to
update cross-references in that Act following the passage of the Commonwealth Authorities
and Companies Amendment Act 2008. These amendments would realign Australia Post's
obligations to comply with General Policy Orders under the CAC Act and to report on
compliance with those requirements;
· Schedule 4 makes amendments to the Australian Wine and Brandy Corporation Act 1980,
and consequential amendments to other Acts, to rename the Australian Wine and Brandy
Corporation to the Wine Australia Corporation;
· Schedule 5 makes several amendments to the CAC Act, including establishing governance
arrangements for interjurisdictional authorities under the CAC Act and allowing the
responsible Minister and Finance Minister to delegate certain functions and powers;
· Schedule 6 makes amendments to the Competition and Consumer Act 2010, which clarify
the body corporate status of the Australian Competition and Consumer Commission;
· Schedule 7 amends the Criminology Research Act 1971 to facilitate the merger of the
Australian Institute of Criminology and the Criminology Research Council into a single
agency under the FMA Act;
· Schedule 8 amends the FMA Act to establish governance arrangements for
interjurisdictional FMA Act agencies, transfers provisions from the CAC Act about
notifying Parliament about involvement in companies and amends the definition of
"proper use" of Commonwealth resources in subsection 44(3) of the FMA Act to explicitly
include "economical" use;
· Schedule 9 amends the National Transport Commission Act 2003 to bring the governance of
the National Transport Commission under the CAC Act;
· Schedule 10 amends the Parliamentary Service Act 1999 to clarify how the Presiding
Officers may make payments in special circumstances; and
· Schedule 11 repeals 20 special appropriations, including 6 Acts and a statutory Special
Account. The Schedule would also abolish the Office of Evaluation and Audit (Indigenous
Programs) as that function has been successfully absorbed into the Australian National
Audit Office.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 7
III. OVERVIEW OF AMENDMENTS IN SCHEDULES
30. The following overview of amendments proposed in Schedules 1 - 11 of the Bill is provided
in general terms, rather than by item number. Parts IV - XIV of this Explanatory Memorandum
contain a description of the Schedules of the Bill, organised by item number.
Schedule 1 - Amending the Australian Human Rights Commission
Act 1986
31. Schedule 1 amends the Australian Human Rights Commission Act 1986 to clarify the body
corporate status of the Australian Human Rights Commission (AHRC) under the Financial
Management and Accountability Act 1997 (FMA Act). This is consistent with other bodies
corporate that are now under the FMA Act, in particular where the body had previously been under
the Commonwealth Authorities and Companies Act 1997 (CAC Act) and has been moved to the
FMA Act, consistent with the Australian Government's Governance Arrangements for Australian
Government Bodies policy (Governance Policy). Provisions used as a precedent for clarifying the
status of the AHRC under the FMA Act were those developed for the Australian Prudential
Regulation Authority.
32. The AHRC is prescribed by regulations made under the FMA Act and does not hold any
money on its own account. As such it is financially part of the Commonwealth and is an FMA Act
agency.
Schedule 2 - Amending the Australian Law Reform Commission
Act 1996
33. Schedule 2 proposes amendments to the Australian Law Reform Commission Act 1996
(ALRC Act).
34. The Australian Law Reform Commission (the Law Reform Commission) is currently a
Commonwealth authority under the CAC Act. The purpose of the proposed amendments is to
enable the Law Reform Commission to become a prescribed agency under the FMA Act and a
Statutory Agency for the purposes of the Public Service Act 1999 (Public Service Act).
35. The Law Reform Commission's transfer of governance arrangements is consistent with the
transfer of governance arrangements of a number of other CAC Act bodies to the FMA Act in
recent years, as explained in the Overview, above.
36. To effect this transition, the amendments propose to align the Law Reform Commission's
governance arrangements with an executive management model by replacing the existing Board of
Management with a Chief Executive Officer.
37. It is also proposed to amend provisions relating to the composition of the Commission's
membership to introduce a more flexible membership structure for the Commission, so that the
composition of the Commission can be adjusted based on the subject matter of the inquiries referred
to it. The proposed amendments would facilitate the short-term appointment of members with
expertise in particular areas of inquiry, rather than appointing exclusively legal experts or
generalists. This will be achieved by enabling the Attorney-General, rather than the
Governor-General, to make part-time appointments to the Commission. This will provide greater
flexibility in the Commission's membership, enhance the timeliness and workability of the
appointment process and allow for better use of appointments for the length of specific references.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 8
38. These amendments are consistent with the Australian Government's Governance Policy. For
certain bodies transferring their governance arrangements from the CAC Act to the FMA Act, a
body corporate is retained. For this agency, however, there is no compelling need for retention of
body corporate status. (The Flipchart of FMA Act Agencies and CAC Act bodies, published by the
Department of Finance and Deregulation on its website regularly, lists the FMA Act agencies which
encompass a body corporate. Reasons for retaining a body corporate status under the FMA Act are
explained in the Governance Policy).
Schedule 3 - Amending the Australian Postal Corporation Act 1989
39. Schedule 3 updates provisions of the Australian Postal Corporation Act 1989 (Australia Post
Act) concerning the application of general policies of the Australian Government to the Australian
Postal Corporation (Australia Post). The Bill updates the Australia Post Act to refer to "General
Policy Orders", introduced in the CAC Act following its amendment by the Commonwealth
Authorities and Companies Amendment Act 2008.
40. General policies can apply to Commonwealth authorities through the making of a legislative
instrument in the form of a General Policy Order under section 48A of the CAC Act. The previous
process, whereby the responsible Minister gave written notice to Australia Post to comply with a
general policy, which is reflected in the Australia Post Act, has been replaced by the new process.
Schedule 4 - Amending the Australian Wine and Brandy Corporation
Act 1980
41. Schedule 4 facilitates the change of name of the Australian Wine and Brandy Corporation to
Wine Australia Corporation. The corporation brands itself overseas as "Wine Australia" and these
amendments updates the Australian Wine and Brandy Corporation Act 1980 (AWBC Act), and
also 4 other Acts, accordingly.
Schedule 5 - Amending the Commonwealth Authorities and Companies
Act 1997
42. Schedule 5 amends the CAC Act, primarily to allow for regulations to be made to clarify
governance arrangements for "interjurisdictional" Commonwealth authorities. These are
Commonwealth authorities where a State or Territory is involved in the governance of the authority
through the authority's enabling legislation.
43. Schedule 5 also makes a number of other amendments to the CAC Act, in particular
expressly allowing a Minister to delegate some of his or her powers and functions to a Departmental
Secretary (refer item 16), which allows for a clearer basis for implementing arrangements that occur
partly through Ministerial authorisation.
Schedule 6 - Amending the Competition and Consumer Act 2010
44. Schedule 6 amends the Competition and Consumer Act 2010 to clarify the body corporate
status of the Australian Competition and Consumer Competition (ACCC) under the FMA Act. This
is consistent with other bodies corporate that are now under the FMA Act, in particular where the
body had previously been under the CAC Act and has been moved to the FMA Act, consistent with
the Australian Government's Governance Arrangements for Australian Government Bodies policy
(Governance Policy). Provisions used as a precedent for clarifying the status of the ACCC under
the FMA Act were those developed for the Australian Prudential Regulation Authority.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 9
45. The ACCC is prescribed by regulations made under the FMA Act and does not hold any
money on its own account. As such, it is financially part of the Commonwealth and is an FMA Act
agency.
Schedule 7 - Amending the Criminology Research Act 1971
46. Schedule 7 amends the Criminology Research Act 1971 (CR Act) to merge two existing
CAC Act Commonwealth authorities, the Australian Institute of Criminology (AIC) and the
Criminology Research Council (CRC), into a single agency under the FMA Act.
47. The AIC was established as a statutory authority in 1972 and operates under the Criminology
Research Act 1971. The AIC is Australia's national research and knowledge centre on crime and
justice. It seeks to promote justice and reduce crime by undertaking and communicating evidence-
based research to inform policy and practice.
48. The CRC is also established under the CR Act. Its principal objectives are to support
research that is relevant to current and future public policy issues, foster the undertaking of quality
criminological research and ensure that CRC-supported research is disseminated effectively. The
CR Act also establishes the Criminology Research Fund, which is administered by the CRC.
49. A number of reviews have recommended changes to strengthen the governance and
accountability arrangements for the AIC and CRC. In particular, the Behm Review of the
Criminology Research Act 1971 and The Review of Homeland and Border Security (the Smith
Review) each recommended that consideration be given to bringing the AIC and CRC together
under the Financial Management and Accountability Act 1997 (FMA Act). This recommendation
is also consistent with the Governance Arrangements for Australian Government Bodies,
August 2005, policy (Governance Policy).
50. The purpose of this Schedule is to merge the AIC and CRC into a single agency regulated
under the FMA Act. The transfer of governance arrangements of the AIC and CRC to the FMA Act
is consistent with the transfer of governance arrangements of a number of other CAC Act bodies to
the FMA Act in recent years.
51. As a CAC Act body, the AIC currently has a governing Board whose role is to set strategic
research priorities within general policy and strategic directions. It also has an oversight role in
corporate planning and financial management matters. To facilitate the transfer of the AIC as a
prescribed agency under the FMA Act, without retaining its status as a body corporate, this
Schedule would remove all references to the Board from within the CR Act and establish a new
advisory council (the Criminology Research Advisory Council) to advise the Director on a number
of issues and would include representatives from the Commonwealth, States and Territories.
52. This Schedule would also establish the AIC as a Statutory Agency for the purposes of the
Public Service Act 1999 and prescribe the Director of the AIC as Head of the Statutory Agency.
53. These amendments would facilitate the establishment of the AIC as a prescribed agency
under the FMA Act and would make the Director, rather than the Board of Management,
responsible to the Attorney-General for the effective management of the AIC. In doing so, the
Director would be obliged to comply with the FMA Act and Regulations.
54. The amendments proposed by Schedule 7 would transfer authority for functions that are
currently being exercised by AIC to the Director. This is consistent with the executive management
template for FMA Act agencies, whereby the Chief Executive of an FMA Act agency has
responsibility for managing the agency. The AIC's function would then be to assist the Director in
performing his or her functions.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 10
55. A new Special Account (the Criminology Research Special Account) would also be
established under new section 46 to provide the AIC with a mechanism for debiting and crediting
amounts for the specific purposes set out in that section, to be as consistent as feasible with the
AIC's existing financial arrangements under the CAC Act.
Schedule 8 - Amending the Financial Management and Accountability
Act 1997
56. Schedule 8 amends the FMA Act to allow regulations under the FMA Act to specify certain
prescribed agencies as "interjurisdictional". Provision is made for reporting by the agency to State
or Territory Ministers and the inclusion of State or Territory public servants as part of the staff of an
interjurisdictional agency. These provisions are based on changes proposed to the CAC Act with
respect to interjurisdictional Commonwealth authorities (Schedule 5 refers).
57. Schedule 8 would also transfer, from the CAC Act to the FMA Act, the responsibility to
inform Parliament when there are changes to the involvement of the Commonwealth (or a
prescribed body named in the regulations), in a company. Item 12 of Schedule 5 would remove the
existing requirements from the CAC Act.
58. Schedule 8 also amends the definition of "proper use" of Commonwealth resources in
subsection 44(3) of the FMA Act to explicitly include "economical" use. Schedule 8 further
amends several headings in the FMA Act to clarify the links to relevant content and to remove
obsolete references (such as to the Criminal Code).
Schedule 9 - Amending the National Transport Commission Act 2003
59. Schedule 9 amends the NTC Act to ensure that the CAC Act applies to the NTC as a full
Commonwealth authority. Simplifying governance structures by placing government activities
under the financial framework accords with the Government's Governance Policy and is consistent
with the amendment made by the Financial Framework Legislation Amendment Act 2008 that
transferred the Albury-Wodonga Development Corporation to governance under the CAC Act from
1 July 2009.
Schedule 10 - Amending the Parliamentary Service Act 1999
60. Schedule 10 amends section 66 of the Parliamentary Service Act 1999 (Parliamentary
Service Act). The amendments are intended to clarify that the appropriation authority for making
certain payments under that section is contained in the relevant Appropriation Act. Section 66 of
the Act provides the Presiding Officers with the power to authorise the making of a payment to a
person because of special circumstances that relate to, or arise out of, the employment of a person
(the payee or another person) by the Commonwealth.
Schedule 11 - Repeals
61. Schedule 11 repeals 20 redundant special appropriations, including 6 redundant Acts and a
statutory Special Account, as well as other redundant legislation relating to the Commonwealth's
financial framework.
62. Item 7 in Schedule 11 repeals Part 4B of the Aboriginal and Torres Strait Islander Act 2005
which currently provides for the Office of Evaluation and Audit (Indigenous Programs). The repeal
of Part 4B reflects the absorption of the office into the Australian National Audit Office.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 11
IV. NOTES ON SCHEDULE 1 - Amending the
Australian Human Rights Commission Act 1986
63. An explanation of the amendments proposed in Schedule 1 is provided in sequential order.
Part 1--Amendments
Clarifying body corporate status of the Australian Human Rights Commission
64. Item 1 amends the AHRC Act to add new subsections 7(4), (5) and (6) to the provisions that
describe the Australian Human Rights Commission (AHRC) as a body corporate.
65. The new subsection 7(4) would provide that any real or personal property held by the AHRC
is held for and on behalf of the Commonwealth, thereby clarifying that such property is not held by
the AHRC on its own account.
66. The new subsection 7(5) is intended to complement subsection 7(4) in relation to any money
held by the AHRC.
67. The new subsection 7(6) would complement the current paragraph 7(2)(d), which provides
that the AHRC may sue and be sued in its corporate name, and clarifies that a right to sue is not
personal property for the purposes of the new subsection 7(4).
68. These amendments make it clear, on the face of the primary legislation, that any expenditure
by the AHRC must be based on an appropriation from the Parliament, given that the AHRC is
financially governed under the Financial Management and Accountability Act 1997.
Part 2 - Transitional provisions
Property held by the Commission
69. Item 2 provides that any real or personal property held by the Commission immediately
before the new subsections 7(4), (5) and (6) commence, is taken, after their commencement, to be
real or personal property held by the AHRC for and on behalf of the Commonwealth.
70. Item 3 confirms, to avoid doubt, that the AHRC's right to sue is not affected by these
amendments. This provision ensures, to avoid doubt, that any of its ongoing legal proceedings are
not affected by these amendments. The provision deals with a right to sue, only, given the
clarification in subsection 7(6) that a right to sue is not to be treated as personal property. It is
important to note, however, that no potential rights held by others to sue, litigate against, or
otherwise engage in proceedings with the AHRC, are affected by this amendment.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 12
V. NOTES ON SCHEDULE 2 - Amending the
Australian Law Reform Commission Act 1996
71. An explanation of the amendments proposed in Schedule 2 is provided in sequential order.
Part 1--Amendments
Definitions
72. Items 1 to 8 amend several definitions within section 3 of the Australian Law Reform
Commission Act 1996 (ALRC Act), which defines several terms for the purposes of the ALRC Act.
These amendments are required due to the proposed transition of the management structure to an
executive management model, and to broaden the definition of "judicial office".
73. Items 1 and 2 repeal the definitions of "Board" and "Board member". These definitions will
no longer be required as a consequence of the amendments proposed by item 34, which will repeal
provisions of the ALRC Act dealing with the board of management (sections 27 to 32).
74. Item 3 repeals the definition of "Deputy President". This definition will no longer be
required as a consequence of amendments proposed by item 11, which will remove the office of
Deputy President from the Australian Law Reform Commission's (Law Reform Commission's)
membership structure.
75. Item 4 repeals the definition of "Division". This definition will no longer be required as a
consequence of amendments proposed by item 47, which repeals provisions of the ALRC Act
allowing the Law Reform Commission to establish Divisions of the Law Reform Commission for
the purposes of specific references (Division 3 of Part 4).
76. Item 5 replaces the definition of "judicial office" with a new definition to improve
consistency throughout the ALRC Act. Paragraph (a) is broadened to refer to the office of a judge,
magistrate or justice of a Federal, State or Territory Court. Paragraph (b) is similarly expanded to
include an office whose holder has, under an Act of the Commonwealth, a State or Territory, the
same status as a judge, magistrate or justice of a Federal, State or Territory Court.
77. The new definition omits reference to "the office of President of the Defence Force
Discipline Appeal Tribunal" in subsection (c) of the definition. As the President of the Defence
Force Discipline Appeal Tribunal must be a "Justice or Judge of a federal court or of the Supreme
Court of a State or Territory" (section 8 of the Defence Force Discipline Appeals Act 1955), this
office will fall within the expanded definition of "judicial office" and hence specific reference to it
in subsection (2) is no longer required.
78. Items 6 and 7 insert the definitions of "management advisory committee" and "management
advisory committee member". These definitions are inserted as a consequence of item 35 which
inserts a new section 27 to allow the Attorney-General to establish a management advisory
committee.
79. Item 8 amends the definition of "member" to remove the reference to Deputy President as a
consequence of the amendments proposed by item 11, which will remove of the office of Deputy
President from the ALRC's membership structure.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 13
Establishment and constitution of the Law Reform Commission
80. Item 9 omits the characters "(1)" in subsection 5(1) as a consequence of the amendments
made by item 10. Item 10 repeals subsections 5(2), (3) and (4). These subsections are no longer
required as the Law Reform Commission will become legally and financially part of the
Commonwealth as a result of becoming a prescribed agency under the Financial Management and
Accountability Act 1997 (FMA Act).
81. Item 11 replaces paragraphs 6(1)(b) and (c) with a new paragraph 6(1)(b). The effect of this
amendment is to abolish the office of Deputy President and to provide that the Law Reform
Commission consists of the President and not more than six other members to increase flexibility in
the constitution of the Law Reform Commission. The office of Deputy President is being abolished
as there is no specific role for the Deputy President beyond that of any other member apart from
acting as President when the President is absent from time to time. The amendments proposed by
items 21 and 22 will enable the Attorney-General to appoint a member (or a person who is qualified
to be a member) to act as President.
82. Item 12 inserts a new subsection 6(3) which will allow the Attorney-General to appoint
part-time members as the Attorney-General considers necessary from time to time to enable the
Law Reform Commission to perform its functions. This proposed amendment allows greater
flexibility in the size and composition of the Law Reform Commission, enabling the
Attorney-General to appoint such part-time members as necessary (subject to new
paragraph 6(1)(b)) to ensure that the Law Reform Commission is able to perform its functions.
Appointment of members
83. Subsection 7(1) currently provides that all members must be appointed by the
Governor-General. Item 13 replaces this subsection with a new subsection that will allow part-time
members to be appointed by the Attorney-General, by written instrument, with all full-time
members being appointed by the Governor-General. The purpose of this amendment is to enhance
the workability and timeliness of the appointment process and to better enable members who are
subject-matter experts in particular fields of inquiry to be appointed to the Law Reform
Commission quickly and flexibly for the purpose of contributing to a specific reference.
84. Subsection 7(2) currently lists the eligibility criteria for appointment as a member of the Law
Reform Commission. Item 14 replaces paragraph 7(2)(a) with a new paragraph 7(2)(a) to broaden
the eligibility criteria to include "the holder of a judicial office", consistent with the amendment of
the definition of "judicial office" proposed by item 5. Item 15 amends paragraph 7(2)(d) which
currently allows a person to be appointed to the Law Reform Commission if they are, in the
Governor-General's opinion, suitable for the appointment. Specifically, item 15 replaces
"Governor-General's opinion" with "opinion of the Governor-General or the Attorney-General (as
the case may be)" consistent with the amendments proposed by items 12 and 13, which will allow
the Attorney-General to appoint part-time members to the Law Reform Commission.
85. Subsection 8(1) currently provides that the President and the Deputy President must be
appointed as full-time members. Item 16 replaces subsection 8(1) with a new subsection 8(1)
which provides that the President must be appointed as a full-time member. It also removes the
reference to the Deputy President as a consequence of the amendments proposed by item 11.
86. Item 17 replaces the word "must" with "may" in subsection 8(2). The effect of this
amendment is to enable members to be appointed as either full-time or part-time members having
regard to the range and volume or work being undertaken by the Law Reform Commission.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 14
87. Item 18 repeals the definition of "judicial office" in subsection 8(4). This definition is no
longer required as the amended definition of "judicial office" in section 3 will apply throughout the
ALRC Act.
88. Subsection 9(1) currently provides that members may hold office for the term, not longer
than 7 years, specified in his or her appointment and are eligible for re-appointment. Item 19
amends subsection 9(1) to provide that a member can hold office for a term of at least 6 months but
no longer than 5 years and are eligible for re-appointment. This proposed amendment is consistent
with the Commonwealth's guidelines for the merit-based selection of Australian Public Service
agency heads and statutory office holders, which specify that appointments should be made for a
period of 5 years unless other special circumstances arise justifying a short term.
89. Item 20 amends subsections 11(1) and (2). The purpose of these amendments is to enable
the Governor-General or the Attorney-General to enter into necessary arrangements with the
Governor of a State or the Chief Minister of a Territory for the purpose of appointing a judicial
officer as a member.
Acting appointments
90. Item 21 removes section 12. This section will no longer be required as a consequence of
amendments proposed by item 11.
91. Section 13(1) currently enables the Attorney-General to appoint a full-time member (other
than the Deputy President) to act as President. Item 22 amends section 13(1) to enable the
Attorney-General to appoint, by written instrument, a member or a person who is qualified to be a
member to act as President when there is a vacancy in the office of President or the President is
absent from duty or from Australia. This amendment broadens the category of persons who may be
appointed to act as President and removes the reference to the Deputy President, as a consequence
of the amendment proposed by item 11.
92. Subsections 13(2) and (3) currently refer to the process of appointing an acting Deputy
President. Item 23 repeals subsections 13(2) and (3) as they are no longer required as a
consequence of the amendment proposed by item 11. Item 23 also inserts new subsections 13(2)
and (3). New subsection 13(2) will provide that the instrument appointing an acting President must
specify the period in which the appointment has effect, or the circumstances, in which an
appointment has effect. New subsection 13(3) clarifies that when a person who is not a member of
the Law Reform Commission is acting as President, the person is deemed to be a member of the
Law Reform Commission for the period of the appointment.
93. Item 24 amends subsection 14(1) by removing the reference to the Deputy President as a
consequence of the amendments proposed by item 11.
Remuneration and allowances
94. Item 25 removes the words "or a judge of the Supreme Court of a State or Territory" in
subsection 16(1) as they will no longer be necessary following the expansion of the definition of
"judicial office" proposed by item 5.
Termination of appointments and resignation
95. Section 17 currently provides for circumstances in which a member's appointment may be
terminated. Item 26 replaces sections 17 and 18 with new sections 17, 17A and 18. New section
17 provides for circumstances in which a full-time member's appointment may be terminated by the
Governor-General, effectively replicating current section 17 with the following exceptions:
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 15
· current paragraph 17(2)(a) is replaced with a provision which separates the circumstances in
which a member's appointment may be terminated;
· current paragraph 17(2)(b) and subsection 17(3A) are removed as they refer to breaches of the
CAC Act and are no longer relevant once the Law Reform Commission becomes a prescribed
agency under the FMA Act; and
· the words "or a judge of the Supreme Court of a State or Territory" in current
subsection 17(5) are removed as they are no longer necessary following the expansion of the
definition of "judicial office" proposed by item 5.
96. New section 17A provides for circumstances in which a part-time member's appointment
may be terminated by the Attorney-General. This amendment is consistent with the amendments
made by item 13, which allow the Attorney-General to appoint part-time members and replicates
new section 17 with the exception of subsection 17(3).
97. Section 18 currently provides for circumstances in which a member may resign from his or
her office. Item 26 replaces section 18 with a new section 18, which provides that full-time
members may resign by signing a written resignation and delivering it to the Governor-General, and
part-time members may resign by signing a written resignation and delivering it to the
Attorney-General. This amendment is consistent with the amendments made by item 13, which
allow the Attorney-General to appoint part-time members.
Leave of absence for full-time members
98. Section 19(3) provides the President with the power to grant the Deputy President or any
other full-time member, leave of absence (except recreation leave) on such terms and conditions as
to remuneration. Item 27 amends subsection 19(3) by removing the reference to the Deputy
President as a consequence of the amendments proposed by item 11. Item 28 inserts new
subsection 19(4) to provide that section 19 has effect subject to the Remuneration Tribunal
Act 1973.
How the Law Reform Commission is to perform its functions
99. Current paragraph 24(1)(b) provides that the Law Reform Commission must ensure that the
laws, proposals and recommendations it reviews, considers or makes are, as far as practicable,
consistent with the International Covenant on Civil and Political Rights (ICCPR). Item 29 removes
the reference to the ICCPR and substitutes "Australia's international obligations that are relevant to
the matter". This amendment will make subsection 24(2) redundant and is proposed for removal by
item 30. The purpose of this amendment is to ensure that the Law Reform Commission considers
all of Australia's international obligations relevant to a reference.
100. Item 30 replaces subsections 24(2) and 24(3) with a new subsection 24(2) which requires the
Law Reform Commission to have regard to the effect that recommendations may have on the costs
of getting access to, and dispensing, justice and also the effect on persons and businesses in general
(including the economic effect). The purpose of this amendment is to ensure that the Law Reform
Commission has regard to any broader implications its recommendations may have.
Law Reform Commission to comply with certain requirements and directions
101. Section 26 provides that the Law Reform Commission must comply with certain
requirements and directions. Item 31 inserts subsection 26(2A), which will provide that in
administering the Law Reform Commission, the President must act in accordance with any policies
determined by, and comply with any directions given, by the Attorney-General in writing. The
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 16
purpose of this amendment is to enable the Attorney-General to give written directions to the
President with respect to the administration of the Law Reform Commission and to ensure that its
administration is consistent with Government policy. This new subsection is consistent with the
FMA Act and is limited to administrative matters only. It will not affect the independence of the
Law Reform Commission in undertaking inquiries.
102. Item 32 repeals subsection 26(4), which provides that section 26 does not affect the
application of section 28 of the CAC Act in relation to policies affecting the Law Reform
Commission. The CAC Act would not apply to the Law Reform Commission, following its
transition to a prescribed agency under the FMA Act, therefore subsection 26(4) would no longer be
relevant.
Management structure
103. Sections 27 to 32 currently allows for the Board of Management of the Law Reform
Commission and set out the Board's functions, powers and constitution, as well as the arrangements
for Board meetings and delegations. The Board is currently responsible for the management of the
Law Reform Commission and ensuring it performs its functions effectively and economically.
Under section 34, the President of the Law Reform Commission is the Chief Executive Officer and
is, under the Board, responsible for the management of the Law Reform Commission.
104. Item 33 repeals section 27 to 32 and inserts a new section 27 which allows the
Attorney-General to establish a management advisory committee to advise the President of the Law
Reform Commission on issues relevant to the proper discharge of the functions of the Law Reform
Commission, such as the Law Reform Commission's strategic plan and implementation. The
management advisory committee will not possess executive powers or decision-making authority
and may not compromise the intellectual independence or impartiality of the Law Reform
Commission. The intent of this provision is that the management advisory committee will provide
support for the President on the management of the Law Reform Commission in a non-binding
manner, within a relationship where the committee is subordinate to the President. The Law
Reform Commission will continue to report to the Attorney-General on the results of any reviews
and to include in those reports, any recommendations it may wish to make (as provided for in
section 21). Additionally, the President of the Law Reform Commission may decide matters about
the management advisory committee that are not provided for in the ALRC Act, such as the timing
and conduct of meetings. The Attorney-General may appoint or remove members to the
management advisory committee and may dissolve the management advisory committee at any
time.
105. Item 34 repeals sections 27 to 34 and inserts a new section 34 to replace the existing Board
of Management structure with the President as Chief Executive Officer. This amendment aligns the
Law Reform Commission's governance arrangements with an executive management structure and
is consistent with the Government's Governance Arrangements for Australian Government Bodies
policy.
Meetings of the Law Reform Commission
106. Section 36 provides for the manner in which meetings of the Law Reform Commission are to
be convened and conducted. Item 35 repeals subsection 36(1), which provides that the President
must convene meetings of the Law Reform Commission as he or she thinks necessary for the
efficient performance of its functions and substitutes it with a new subsection that requires the
President to convene at least two meetings each financial year and any other meetings that the
President thinks necessary for the efficient performance of the Law Reform Commission's
functions. This amendment formalises what already occurs in practice.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 17
107. Items 36 and 39 amend subsections 36(2) and 36(6) respectively by removing the reference
to three members and substituting a reference to the majority of members, so that the President must
convene a meeting on receiving a written request that is signed by a majority of the members, and
that a quorum constitutes a majority of the members of the Law Reform Commission. These
amendments are necessary as the composition of the Law Reform Commission changes depending
upon the number of members that are considered necessary for the Law Reform Commission to
perform its functions.
108. Item 37 repeals subsection 36(4) as it will no longer be required as a consequence of
amendments proposed by item 11. Similarly, item 38 removes the reference to Deputy President to
provide that if the President is not present, the members who are present must elect one of their
number to preside.
Members must disclose certain interests
109. Section 39 requires that members must disclose certain interests in matters being considered,
or about to be considered, by the Law Reform Commission. Items 40 and 42 amend
subsections 39(1) and (4) respectively to replace the concept of "material personal interest" with
"interest", for consistency with the FMA Act.
110. Item 41 inserts the words "of the Commission" after the word "meeting" in subsection 39(2)
to make it clear that disclosures must be recorded in the minutes of the meeting of the Law Reform
Commission where the disclosure is made.
111. Item 43 repeals subsection 39(5) and inserts new subsections 39(5) and (6) which
respectively require that determinations relating to interests be recorded in the minutes of the
meeting where the disclosure is made, and define the types of interests that must be disclosed. The
effect of this amendment is that any interest must be disclosed, whether that interest is direct or
indirect (whether or not pecuniary) and whether it is acquired before or after the member's
appointment.
112. Item 44 inserts a new section 40 at the end of Division 2 of Part 4, which provides that the
President must give written notice to the Attorney-General of all interests he or she has or acquires
and that conflict, or could conflict, with the proper performance of the President's functions.
Divisions of the ALRC
113. Division 3 of Part 4 provides for Divisions of the Law Reform Commission to be created for
the purpose of a specific reference. Item 45 repeals Division 3 as it will no longer be necessary for
there to be formal divisions of the Law Reform Commission as a consequence of the amendments
to the composition of the Law Reform Commission proposed by item 10.
Staff and consultants
114. Section 43 currently provides that the President (with the Attorney-General's approval) may
appoint staff of the Law Reform Commission and on terms and conditions determined by the
Board. Item 46 substitutes new subsections 43(1) and (2) to provide that the staff of the Law
Reform Commission are to be engaged under the Public Service Act, that the President and the staff
together constitute a Statutory Agency and that the President is the Head of that Statutory Agency.
115. Section 44 currently provides that the Law Reform Commission may engage consultants and
on terms and conditions determined by the Board. Item 47 substitutes the reference to the
"Commission" in subsection 44(1) with a reference to the President and removes the need to
"determine" any "terms and conditions" given that consultants would simply be engaged under
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 18
contract law. Item 48 repeals subsection 44(2). The effect of these amendments is that the
President may engage consultants with suitable qualifications and experience.
Finance
116. Item 49 repeals Part 5, which deals with matters relating to the Law Reform Commission's
financial management, as matters relating to financial management of the Law Reform Commission
will be dealt with under the FMA Act.
117. Item 49 also substitutes a new section 45, which establishes the Law Reform Special
Account for the purposes of the FMA Act. The purpose of this section is to enable amounts to be
credited to or debited from the Law Reform Commission's Law Reform Special Account. This
item also states the purposes of the account, what can be credited to the account and how the
adjusted levy amounts that will be calculated and credited to the account. Importantly, money that
was previously held by the Law Reform Commission will be credited to this Special Account
through the transitional provision (subitem 54(2)).
Protection from civil actions
118. Item 50 repeals section 50, which protects the Law Reform Commission from civil actions.
This section will no longer be required as a consequence of item 10, which will remove the Law
Reform Commission's body corporate status. The Law Reform Commission will be legally part of
the Commonwealth and is thus afforded Crown immunity.
Part 2--Transitional Provisions
Application of subsection 9(1) amendment
119. Item 19 of this Schedule amends subsection 9(1) which prescribes the duration of members'
appointments. Item 51 clarifies that this amendment applies to all appointments made when or
after this Schedule commences.
Law Reform Commission and Board
120. Item 52 provides for the continuation of appointments of members, engagements of
consultants, arrangements and decisions once this Schedule commences, and on the terms and
conditions held before this Schedule commenced (subitems 52(1), (2), (3), (4) and (6)).
Subitem 52(7) defines the types of decisions relevant to subitem 52(6).
121. Subitem 54(5) ensures that references in an Act, statutory instrument or other document to
the Board are references to the President of the Law Reform Commission, and any reference to a
member of the Board is a reference to a member of the Law Reform Commission.
Employees
122. Subitem 53(1) provides that any employees engaged immediately before this Schedule
commences, continue to be engaged as if the person was appointed under the Public Service Act.
Subitem 53(2) provides that an employee transferred from the old to the new Law Reform
Commission has their entitlements transferred in their entirety. Subitem 53(3) defines terms
relevant to item 53 including new Commission and old Commission.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 19
Vesting of property, money and financial liabilities
123. Items 54 and 55 provide that the Law Reform Commission's assets and liabilities transfer
across from the existing body corporate to the Commonwealth.
Instruments relating to transferred assets and liabilities
124. Item 56 provides that where instruments, relating to assets or liabilities in items 56 and 57,
are in force immediately before this Schedule commences, any reference to the Law Reform
Commission is to be read as a reference to the Commonwealth.
Exemptions from stamp duty and other State or Territory taxes
125. Item 57 provides that no stamp duty or tax is payable under a law of a State or Territory in
respect of the transfer of assets or liabilities under this Part. As assets or liabilities must be
transferred due to the change in body corporate structure, no stamp duty or tax should be paid.
Proceedings
126. Item 58 provides that if the Law Reform Commission was a party to any proceedings
pending in any court or tribunal immediately before this Schedule commences, the Commonwealth
is substituted for the Law Reform Commission as the party to the proceedings, when this Schedule
commences. The purpose of this item is to transfer the Law Reform Commission's responsibilities
to the Commonwealth.
Contracts
127. Item 59 provides that where contracts are entered into or are in force immediately before this
Schedule commences, the contract has effect as if the Commonwealth had entered into the contract.
Appropriations
128. Item 60 provides that if the Consolidated Revenue Fund is appropriated under an Act to the
Department that administers the ALRC Act for payment to the Law Reform Commission, the
appropriation Act continues to apply after this Schedule commences.
Reports
129. Item 61 provides that the Law Reform Commission is required to provide a report (whether
financial statements or otherwise) for periods ending before this Schedule commences. However,
subitem 63(3) allows a single report to be produced where two reports are required for periods
ending after this Schedule commences.
Regulations
130. Item 62 provides that the Governor-General may make regulations prescribing matters of a
transitional nature relating to the amendments made in this Schedule. Subitem 62(3) specifies some
examples of what matters the regulations may prescribe and subitem 62(4) ensures that these
regulations have effect despite the Fair Work Act 2009, the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 and the Public Service Act. Subitem 62(5) defines terms for
the purposes of this item.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 20
VI. NOTES ON SCHEDULE 3 - Amending the
Australian Postal Corporation Act 1989
131. An explanation of the amendments proposed in Schedule 3 is provided in sequential order.
These amendments relate to reforms made by the Commonwealth Authorities and Companies
Amendment Act 2008, concerning how general policies of Government affect Commonwealth
Authorities and Companies Act 1997 (CAC Act) bodies.
Government obligations of Australia Post
132. Item 1 updates paragraph 28(a) of the Australian Postal Corporation Act 1989 (Australia
Post Act) to require the Australian Postal Corporation (Australia Post) to perform its functions in a
way consistent with any General Policy Order made under section 48A of the CAC Act that applies
to Australia Post and its directors.
Corporate plans
133. Item 2 updates paragraph 38(h) of the Australia Post Act to require the directors of Australia
Post to have regard, when preparing a corporate plan, to the cost of performing Australia Post's
functions in a manner consistent with any General Policy Orders that apply to Australia Post and its
directors.
Annual reports
134. Item 3 updates subparagraph 43(1)(g)(i) of the Australia Post Act to require Australia Post to
include in its annual report particulars of any General Policy Order that applies to Australia Post
and its directors.
Costs of complying with General Policy Orders
135. Item 4 updates subparagraph 44(1)(g)(ii) to require Australia Post to include in its annual
report an assessment of the cost of performing its functions in a manner consistent with any General
Policy Order that applies to Australia Post and its directors.
Government directions
136. Item 5 updates section 50 to replace "Commonwealth Government" with "Australian
Government", consistent with the other amendments in this Schedule, which also update references
to the "Commonwealth Government".
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 21
VII. NOTES ON SCHEDULE 4 - Amending the
Australian Wine and Brandy Corporation Act 1980
137. An explanation of the amendments proposed in Schedule 4 is provided in sequential order.
Part 1 - Amending the Australian Wine and Brandy Corporation Act
1980
Amending the name of the Australian Wine and Brandy Corporation
138. Part 1 of this Schedule amends the Australian Wine and Brandy Corporation Act 1980
(AWBC Act) to reflect the change of name of the corporation and the resulting change to the
corporation's Selection Committee.
139. Items 1-11 replace "Australian Wine and Brandy" with "Wine Australia" in the title, parts,
sections and subsections of the AWBC Act wherever they appear. Specifically, the title of the Act
would become the Wine Australia Corporation Act 1980.
Part 2 - Consequential Amendments
140. Part 2 of this Schedule amends several Acts specifically to reflect the change to "Wine
Australia" where "Australian Wine and Brandy" is referenced.
141. Item 12 amends Part III of Schedule 2 to the Freedom of Information Act 1982, to reflect the
change in the AWBC Act's title in reference to legislation covered.
142. Items 13 and 14 amend clauses 1 and 5(2) & (3) of Schedule 13 to the Primary Industries
(Customs) Charges Act 1999 to change the name of the corporation, in the definition of
Corporation and in references to the title of the AWBC Act.
143. Items 15, 16 and 17 amend clauses 1, 5(2), 9(2) and 9(3) of Schedule 26 to the Primary
Industries (Excise) Levies Act 1999 to change the name of the corporation, in the definition of
Corporation and in the definition of declared winemakers' organisation, and in subclauses 9(2)
and 9(3).
144. Item 18 amends paragraph 128A(4)(r) of the Safety, Rehabilitation and Compensation
Act 1988 to change the definition of prescribed Commonwealth authority to reflect the updating of
the corporation's name.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 22
VIII. NOTES ON SCHEDULE 5 - Amending the
Commonwealth Authorities and Companies Act
1997
145. An explanation of the amendments proposed in Schedule 5 is provided in sequential order.
Definition of "general law"
146. Item 1 amends section 5 of the Commonwealth Authorities and Companies Act 1997
(CAC Act) to insert a new definition of "general law" to mean the "principles and rules of the
common law and equity." This definition reflects the definition of "general law" in section 9 of the
Corporations Act 2001 (Corporations Act). Inserting this definition allows a number of other
provisions to be simplified (refer items 7-11).
Annual reports of Commonwealth authorities
147. Item 2 inserts an explanatory note after paragraph 9(2)(a) of the CAC Act, clarifying (for the
reader) that the deadline for the directors of a Commonwealth authority to submit an authority's
annual report to its responsible Minister is 15 October when the financial year ends on 30 June (that
is three months and 15 days after the relevant body's financial year).
Commonwealth authority to notify the responsible Minister of significant
events
148. Item 3 repeals subsections 15(2) and (3) of the CAC Act and substitutes a new
subsection 15(2). The new subsection allows a responsible Minister to give written guidelines to
the directors of a Commonwealth authority to assist the directors in determining whether a proposal
would be a "significant event" for the purposes of all of the matters in subsection 15(1).
149. Subsection 15(2) is repealed, as it suggests that a responsible Minister for a Commonwealth
authority may not be interested in the formation of a company by an authority. Instead there is
legitimate scope for clearer reporting on the use of company structures and/or subsidiaries in the
Commonwealth's context, consistent with the move of section 45 of the CAC Act to section 39A of
the Financial Management and Accountability Act 1997 (FMA Act). Guidelines may also explain
the amount of notice that a Minister may require in relation to being able to respond to information
about a specific proposed significant event.
Finance Minister's delegation power
150. Item 4 repeals subsection 18(4A) of the CAC Act, which allowed the Finance Minister to
delegate his or her powers and functions under section 18 (relating to investments by
Commonwealth authorities) to an official under the FMA Act. This provision can be repealed as
section 48B brings together a range of delegation powers into a single consolidated provision (refer
item 20). The power of delegation under section 48B will enable delegation of specified powers to
Departmental Secretaries, and therefore supplements any reliance on authorisations of Departmental
Secretaries to seek information on behalf of Ministers.
References to common law and equity
151. Items 5 to 9 amend provisions to replace the phrase "common law and equity" with "under
the general law." The Bill amends the CAC Act to define "general law" in section 5 to refer "to the
principles and rules of the common law and equity" (refer item 1 above). Item 5 amends
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 23
subsection 22(2), Item 6 amends the note after subsection 22(2), item 7 amends subsection 27A(1),
item 8 amends the note after paragraph 27A(1)(b) and item 9 amends section 27B.
152. After item 9, a note alters the heading to section 27E of the CAC Act to clarify that that
section applies to a delegate of a director, rather than to a delegate of a Minister under section 48B
(refer item 16).
Interjurisdictional authorities
153. Item 10 inserts a new Part 3A into the CAC Act to allow for regulations to apply to
interjurisdictional Commonwealth authorities. Part 3A provides an enhanced ability for the
Commonwealth and participating State and Territory jurisdictions to be jointly involved in the
governance of interjurisdictional Commonwealth authorities. A similar provision is being made for
interjurisdictional FMA Act agencies in the FMA Act (refer item 5 in Schedule 8).
154. This proposed amendment is also consistent with Recommendation 9.2 of the Ahead of the
Game: Blueprint for the Reform of Australian Government Administration Report, which
recommends ensuring that there are clear governance arrangements for interjurisdictional entities.
155. Subsection 33A(1) would allow the regulations to prescribe a Commonwealth authority as an
"interjurisdictional authority", to prescribe the persons that comprise an interjurisdictional authority
(including State or Territory officers or employees) and prescribe a Minister of a State, the
Australian Capital Territory or Northern Territory to be a "State/Territory Minister". The
participating State/Territory Minister would ordinarily be the Minister of a State or Territory who is
allocated with administrative oversight of the authority's functions.
156. Subsection 33A(2) would provide that regulations may be made for:
· Interim reports - copies of interim reports to be provided to participating State/Territory
Ministers under section 13;
· Notification of significant events - directors are to notify participating State/Territory
Ministers of significant events under subsection 15(1);
· Issuing guidelines - participating State/Territory Ministers may issue guidelines about
notifying them of significant events under proposed subsection 15(2);
· Participating State/Territory Ministers to be kept informed - directors must keep
participating State/Territory Ministers informed of the authority's operations, and provide
reports, documents and information relating to authority's operations under paragraphs
16(1)(a) and 16(1)(b), within the time limits set by the participating State/Territory Minister
under subsection 16(2); and
· Participating State/Territory Government officers and employees complying with statutory
and other duties - participating State/Territory officials who are directors or officers of an
interjurisdictional authority do not contravene their general duties under sections 23 - 25 (or
their equivalent duties under the general law), consistent with subsection 27A(1).
Wholly-owned Commonwealth company to notify the responsible Minister of
significant events
157. Item 11 repeals subsections 40(2) and (3) of the CAC Act and substitutes a new
subsection 40(2). The new subsection allows a responsible Minister to give written guidelines to
the directors of a wholly-owned Commonwealth company to assist the directors in determining
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 24
whether a proposal is a "significant event" for the purposes of subsection 40(1). Equivalent
amendments applying to Commonwealth authorities are also being made (refer item 3).
158. Subsection 40(2) is repealed, as it suggests that a responsible Minister for a Commonwealth
company may not be interested in the formation of a company by a wholly-owned Commonwealth
company. Rather, there is scope for clearer reporting on the use of companies in the
Commonwealth context, consistent with the move of section 45 of the CAC Act to section 39A of
the FMA Act. Guidelines may also explain the amount of notice that a Minister may require in
relation to being able to respond to information about a specific proposed significant event.
Minister to notify Parliament where the Commonwealth's involvement with a
company changes
159. Item 12 repeals section 45 of the CAC Act regarding Ministerial notices to Parliament where
the Commonwealth's involvement with a company changes. This provision is being relocated as
section 39A of the FMA Act (refer item 4 of Schedule 8). This move will more appropriately locate
the provision in Part 5 of the FMA Act, which relates to investments and involvement in companies
by the Commonwealth. This provision will continue to provide for Ministers to table a notice in
each House of Parliament for events involving the Commonwealth, while allowing the regulations
to broaden the scope of bodies corporate over which reporting may be needed, should that be
deemed necessary in the future.
Compliance with government procurement requirements
160. Item 13 inserts subsection (6A) into section 47A of the CAC Act to make the Finance
Minister's directions to CAC Act bodies on procurement a legislative instrument. Ministerial
directions to CAC Act bodies are generally not legislative instruments under the Legislative
Instruments Act 2003 (LI Act) (refer to item 5 of section 7 of the LI Act). Accordingly, this
amendment would bring these directions under the LI Act to enhance the transparency of
procurement policies applying to relevant CAC Act bodies. These directions are equivalent to the
Commonwealth Procurement Guidelines (CPGs), issued under regulation 7 of the FMA
Regulations, made pursuant to section 64 of the FMA Act. The CPGs are a legislative instrument
(pursuant to subsection 64(3) of the FMA Act) and are not subject to disallowance or sunsetting
(under item 21 of subsection 44(2), and item 19 of subsection 54(2) of the LI Act, respectively).
This amendment will increase the consistency of the Finance Minister's directions to CAC Act
bodies on procurement with the CPGs. Similarly, directions under section 47A will not be subject
to disallowance or sunsetting under the LI Act, but the amendment will mean that such directions
would be added to the Federal Register of Legislative Instruments and increase transparency by
making it easier to identify when such directions have been issued to CAC Act bodies.
161. Item 14 amends subsection 47A(7) to replace the reference to the "Financial Management
and Accountability Regulations 1997" with "regulations made under the Financial Management
and Accountability Act 1997". This ensures that the CAC Act will not be out of date should the
name of those regulations change.
General Policy Orders
162. Item 15 amends subsection 48A(5) of the CAC Act to insert the word "(disallowance)" after
the reference to section 42 of the LI Act and "(sunsetting)" after the reference to Part 6 of the
LI Act. This improves clarity by assisting the reader to understand which provisions of the LI Act
are affected by subsection 48A(5).
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 25
Delegation by Ministers of specific functions to Departmental Secretaries
163. Item 16 inserts section 48B into the CAC Act. This provision would allow a Minister (either
the responsible Minister or Finance Minister) to delegate specified powers and functions, by written
instrument, to a Secretary of a Department of State. The powers and functions that can be delegated
are those under:
· section 14 - preparation of budget estimates by a Commonwealth authority;
· paragraph 16(1)(b) - requests for reports, documents and information from a
Commonwealth authority by the responsible Minister;
· paragraph 16(1)(c) - requests for reports, documents and information from a
Commonwealth authority by the Finance Minister;
· subsection 16(2) - timeframes for requests for reports, documents and information by the
responsible Minister of a Commonwealth authority or Finance Minister;
· paragraph 18(3)(d) - approval of methods of investment of surplus money by
Commonwealth authorities (and which appears currently, in subsection 18(4A));
· section 39 - preparation of budget estimates by a wholly-owned Commonwealth company;
· paragraph 41(1)(b) - requests for reports, documents and information from a wholly-owned
Commonwealth company by the responsible Minister;
· paragraph 41(1)(c) - requests for reports, documents and information from a wholly-owned
Commonwealth company by the Finance Minister; and
· subsection 41(2) - timeframes for requests for reports, documents and information by the
responsible Minister of a wholly-owned Commonwealth company or Finance Minister.
164. Inserting a power of delegation into the CAC Act will assist with more efficient government
operations, contribute to the Government's Better Regulation Agenda and reduce red tape.
Introducing a specific delegation improves on existing practices, which need to rely on
authorisations for seeking budget estimates and monthly financial statements, absent an express
capacity for Ministers to delegate this power to their Secretaries to seek information on their behalf.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 26
XIII. NOTES ON SCHEDULE 6 - Amending the
Competition and Consumer Act 2010
165. An explanation of the amendments proposed in this Schedule is provided in sequential order.
Part 1 - Amendments
Clarifying the body corporate status of the Australian Competition and
Consumer Commission
166. Item 1 amends the Competition and Consumer Act 2010 to add new subsections 6A(3), (4)
and (5).
167. The new subsection 6A(3) would provide that any real or personal property held by the
Australian Competition and Consumer Commission (ACCC) is held for and on behalf of the
Commonwealth, thereby clarifying that such property is not held by the ACCC on its own account.
168. The new subsection 6A(4) is intended to complement subsection 6A(3) in relation to any
money held by the ACCC.
169. The new subsection 6A(5) would complement the current paragraph 6A(2)(d), which
provides that the ACCC may sue and be sued in its corporate name, and clarifies that a right to sue
is not personal property for the purposes of the new subsection 6A(3).
170. These amendments make it clear, on the face of the primary legislation, that any expenditure
by the ACCC must be based on an appropriation from the Parliament, given that the ACCC is
financially governed under the Financial Management and Accountability Act 1997.
Part 2 - Transitional Provisions
171. Item 2 provides that any real or personal property held by the ACCC immediately before the
new subsections 6A(3), (4) and (5) commence, is taken, after their commencement, to be real or
personal property held by the ACCC for and on behalf of the Commonwealth.
172. Item 3 confirms, to avoid doubt, that the ACCC's right to sue is not affected by these
amendments. This provision ensures, to avoid doubt, that any of its ongoing legal proceedings are
not affected by these amendments. The provision deals with a right to sue, only, given the
clarification in subsection 6A(5) that a right to sue is not to be treated as personal property. It is
important to note, however, that no potential rights held by others to sue, litigate against, or
otherwise engage in proceedings with the ACCC, are affected by this amendment.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 27
IX. NOTES ON SCHEDULE 7 - Amending the
Criminology Research Act 1971
173. An explanation of the amendments proposed in Schedule 7 is provided in sequential order.
Part 1 - Amendments
174. As stated in section III above, these amendments would integrate the Criminology Research
Council (CRC) with the Australian Institute of Criminology (AIC) and move the AIC to the
Financial Management and Accountability Act 1997 (FMA Act).
Definitions
175. Item 1 will insert into section 4 a definition of Advisory Council to mean the Criminology
Research Advisory Council (CR Advisory Council) established under new section 33 of the
Criminology Research Act 1971 (CR Act). The CR Advisory Council will be responsible for
advising the Director on a number of issues set out in new section 33 and will provide an important
forum for representation of stakeholder views in relation to the work of the AIC. The CR Advisory
Council will include representatives from the Commonwealth and all States and Territories.
176. Items 2 to 4 provide for the repeal of the definitions of the Board, the Council and the Fund.
As the AIC and CRC are being merged into a single statutory authority regulated under the
FMA Act, these definitions are no longer required.
Status of Institute
177. Item 5 repeals existing subsections 5(2) to (4) and replaces them with new subsection 5(2).
Existing subsections 5(2) to (4) currently provide for the AIC to be a body corporate, in accordance
with the Commonwealth Authorities and Companies Act 1997 (CAC Act). For the AIC, there is no
compelling need for retention of body corporate status, once it is moved to the FMA Act, and these
subsections will become redundant. (In contrast, transferring from the CAC Act to the FMA Act
for certain bodies does justify retaining separate body corporate status, in particular for bodies with
a regulatory function.)
178. Consistent with requirements under the FMA Act, new subsection 5(2) provides that the AIC
will consist of a Director and Staff of the Institute.
Functions of Institute
179. Item 6 repeals existing section 6 and inserts a new section 6 to specify the functions of the
AIC. Existing section 6 provides an extensive list of functions which will no longer be appropriate
for the AIC as an FMA Act agency, but will be transferred to the Director as the person responsible
for managing the affairs of the AIC (see item 9). The AIC will continue to be responsible for its
core role of conducting and communicating criminological research.
180. New subsection 6(c) will enable the AIC to establish and administer awards programs and
engage specialists for the purposes of criminological research and related activities. This will be
similar to the work previously undertaken by the CRC. Payments of these grants will be approved
by the Director, taking into account the advice of the CR Advisory Council, to ensure that
stakeholder views are represented (see item 9).
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 28
181. Consistent with executive management governance arrangements under the FMA Act, this
item also provides that the AIC will be responsible for assisting the Director in performing his or
her functions.
182. Item 7 replaces the word "Board" in subsection 6A(2) with the word "Director". This is a
consequence of the transfer of the functions of the Board to the Director of the AIC. This is
consistent with FMA Act requirements that the Chief Executive of a FMA Act agency is
responsible for the financial management of the agency.
183. Item 8 repeals section 7, which currently provides that the AIC is able to hold money on its
own account, is responsible for the expenditure of that money and is also able to invest its assets. As
an FMA Act agency, the AIC will hold "public" money and will not require the powers provided
for under existing section 7.
184. Item 9 repeals Division 2 of Part II which provides for the establishment and operation of the
AIC Board. As the AIC will no longer have a Board, Division 2 of Part II is no longer required.
185. Existing subsections 15(1) and (2) provide for the appointment of a Director of the AIC by
the Governor-General. Item 10 replaces all references to the "Governor-General" in
subsections 15(1) and (2) with references to the "Attorney-General".
186. This amendment will ensure that the Director of the AIC will be appointed by the Attorney-
General and the appointment of the Director will be subject to any terms and conditions determined
by the Attorney-General.
Functions of Director
187. Item 11 - Section 16 of the CR Act currently provides that the function of the Director is to
manage the affairs of the AIC. This item repeals existing section 16 and replaces it with a new
section 16 to transfer to the Director the more extensive list of functions that were previously
exercised by the AIC.
188. Under the amendments proposed by this Schedule, the Director of the AIC will become the
head of the agency, and his or her functions will be linked to the functions of the AIC, and to the
responsibilities of the head of an FMA Act agency.
189. Consistent with the enabling Acts of many other FMA Act agencies, new section 16 will
transfer a number of the current functions of the AIC to the Director. The amendments are based on
current section 6 (which provides the functions of the AIC under the CAC Act) and will also set out
the circumstances under which the Director must take into account the views of the new
CR Advisory Council before providing certain approvals, including payments of grants and
engaging specialists relating to criminological research and related activities. Consideration of the
advice of the CR Advisory Council is important to ensure representation of all stakeholders,
including the States and Territories who have previously, and will continue to, play an important
role in the general direction of criminological research.
190. Item 12 - Subsection 17(1) currently provides that the tenure of the Director will not exceed
7 years. This item amends subsection 17(1) to shorten the tenure of appointment of the Director
from "up to seven years" to "up to five years" which is consistent with the tenure of other Chief
Executives of statutory authorities within the Attorney-General's portfolio.
191. Item 13 - Subsection 17(4) currently provides that the Director may resign from office by
writing to the Governor-General. Consistent with amendments made by items 8 and 12, item 11
replaces the reference to the "Governor-General" in subsection 17(4) with the "Attorney-General".
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 29
192. Item 14 - Section 20 currently provides that the Governor-General may terminate the
appointment of the Director for misbehaviour or physical or mental incapacity. Section 21 provides
that the Governor-General may remove the Director from office following vacation of office of the
Director. Consistent with amendments made by items 10 and 13, item 14 replaces all references to
the "Governor-General" in sections 20 and 21 with the "Attorney-General".
Staff of the Institute
193. Item 15 - Existing section 23 provides for the appointment of staff of the AIC. Item 15
repeals current section 23 and replaces it with a new section 23. New subsection 23(1) provides
that staff of the AIC are to be employed under either the Public Service Act 1999 (Public Service
Act) or the CR Act. The employment of AIC staff is expected to be predominantly under the Public
Service Act. However, the ability to employ staff under the CR Act will provide the AIC with the
flexibility of continuing to employ academics and researchers with specialised knowledge to
undertake specific research projects, without the requirement of employing them under the Public
Service Act.
194. New subsection 23(2) provides a specific power for the Director to determine the terms and
conditions of those employed under the CR Act. New subsection 23(3) provides that the Director
and APS employees assisting the Director, constitute a Statutory Agency for the purposes of the
Public Service Act and that the Director is the Head of that Statutory Agency.
195. Under the CR Act, the AIC currently employs consultants with expertise in a particular area.
Item 15 also inserts an explicit power in section 24 for the AIC to employ consultants.
Repeal of Division 4 of Part II
196. Item 16 repeals Division 4 of Part II. The provisions of Division 4 of Part II relate to the
finances of the AIC as a CAC Act body. As the Chief Executive of an FMA Act agency, the
Director of the AIC will be accountable for the expenditure and handling of money under the
FMA Act, and subject to the reporting and accountability requirements of the FMA Act.
Consequently, Division 4 of Part II is no longer required and is repealed by item 16.
Repeal of Parts III and IV
197. Item 17 repeals existing Parts III and IV and inserts new Part III. Existing Part III provides
for the establishment and operation of the CRC and existing Part IV provides for the establishment
and operation of the Criminology Research Fund. To facilitate the AIC becoming an FMA Act
agency and integrating the CRC, this Schedule removes all references to the CRC and Criminology
Research Fund from the CR Act.
Criminology Research Advisory Council
198. Item 17 inserts new Part III to provide for the establishment and operation of the
CR Advisory Council.
199. Replacing the AIC Board and the CRC with the new CR Advisory Council will provide an
important forum for representation of stakeholder views in relation to the work of the AIC. The
new CR Advisory Council will be established under new section 33 in Part III to advise the Director
in relation to the general policy and the strategic direction of the AIC, strategic research and
information dissemination priorities in criminology, and applications for research grants. The
Advisory Council will include representatives from the Commonwealth, States and Territories who
will be nominated by the relevant Attorney-General for that jurisdiction. This is consistent with the
current membership of the CRC. New section 33 also enables members of the CR Advisory
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 30
Council to resign by giving written notice to their Attorney-General and provides Attorneys-
General with the ability to revoke appointments by written notice.
200. New section 34 sets out the role of the Director in conducting meetings of the CR Advisory
Council. It will be the Director's responsibility to ensure that the CR Advisory Council meets at
least three times per year. The Director is not entitled to vote at the meetings but must attend and
keep minutes. New subsection 34(4) allows the CR Advisory Council flexibility in setting, outside
of legislation, the manner in which meetings are conducted.
Repeal of section 50
201. Item 18 repeals section 50 and inserts new sections 46, 47, 48 and 49. Existing section 50
provides that transactions of the AIC and CRC and income and transactions of the Criminology
Research Fund are exempt from taxation. Following the integration of the AIC and CRC into a
single statutory authority, matters relating to the AIC's financial management will be dealt with
under the FMA Act and section 50 will become redundant.
Criminology Research Special Account
202. New section 46 provides for the establishment of the Criminology Research Special Account
(CR Special Account), a special account for the purposes of section 21 of the FMA Act. All money
that is paid to the AIC will be credited to this Special Account. This will include amongst other
things, State and Territory contributions (including towards the Australian Crime and Violence
Prevention Awards), money received for services performed, royalties, gifts or bequests made to the
AIC, and other receipts.
203. The debiting clauses provided for in new subsection 46(4) will enable the AIC to expend
money in relation to:
· its functions as set out in new section 6, including the payment of grants (see item 4);
· remuneration and allowances;
· administering the Special Account;
· any amount that is required or permitted to be repaid; and
· reducing the balance of the account.
Institute may charge for services
204. The AIC currently generates revenue through the provision of research and related services
to other Commonwealth Government agencies, State and Territory Governments, not-for-profit
organisations and private sector organisations. The AIC's contracted research and related services
are integral to, and enhance, its core research activities funded by the Australian Government. New
section 47 will provide for the AIC to maintain this ability to charge fees for its services. However,
new subsection 47(2) provides that the amount charged must be reasonably related to the cost of
providing the services. The purpose of this provision is to ensure that the amount charged will not
amount to a tax.
Delegation by Director
205. New section 48 will allow the Director to delegate all or any of his or her functions or
powers to an SES employee, or an acting SES employee, of the AIC. The delegations must be in
writing and, in performing a delegated function or exercising a delegated power, a delegate must
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 31
comply with any written directions of the Director. This section is consistent with delegation
arrangements of Chief Executives of other FMA Act agencies.
Annual Report
206. New section 49 will require the AIC to, as soon as practicable after the end of each financial
year, prepare and give to the Minister, for presentation to the Parliament, a report on its operations
during that year. Subsection 49(2) provides that the annual report must contain the names of grant
recipients, the amount of the grant that has been awarded and the purpose of the grant.
Paragraph 49(2)(b) also allows for regulations to prescribe any other matters that must be included
in the report.
Part 2 - Transitional Provisions
Institute and Board
207. Item 19 provides for the continuation of the appointment of the Director of the AIC and for
current members of the CRC to become members of the CR Advisory Council upon commencement
of this Schedule. Item 17 will also ensure that decisions made by the Board of Management will
continue as if decisions made by the Director after commencement of this Schedule.
Employees
208. Item 20 will ensure that following commencement of this Schedule, staff of the AIC who are
employed under current section 23 will continue to be staff of the AIC as if appointed under the
Public Service Act if a determination made under section 72 of the Public Service Act applies to
that particular staff member. In this situation, the duration of employment under current section 23
will be taken into consideration when transferring employee entitlements.
209. If the Public Service Act determination does not apply to an employee of the AIC, then they
will be taken to be employed under the CR Act in accordance with new paragraph 23(1)(b) and
their terms and conditions will not change.
Vesting of property and money
210. Item 21 will ensure that any real or personal property or money held by the AIC as a body
corporate under the CAC Act will transfer to the Commonwealth under the FMA Act, upon
commencement of this Schedule.
211. The purpose of subitem 19(2) is to ensure the transfer of all money held by the AIC,
including money from the Criminology Research Fund, to the AIC, with an equivalent credit to the
CR Special Account, upon commencement of this Schedule. In short, there will be a consistent
appropriation authority to allow the AIC to retain all of its existing funds.
Vesting of financial liabilities
212. Item 22 will ensure that any financial liabilities of the AIC as a body corporate will be
transferred to the Commonwealth, upon the commencement of this Schedule.
Instruments relating to the transferred assets and liabilities
213. Item 23 provides that where instruments relating to assets or liabilities in items 19 and 20,
are in force before this Schedule commences, any reference to the AIC is to be read as a reference
to the Commonwealth. This amendment is consequential to the amendments made by items 19
and 20.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 32
Exemption from stamp duty and other State and Territory taxes
214. Item 24 provides that no stamp duty or tax is payable under a law of a State or Territory in
respect of the transfer of assets or liabilities outlined in the transitional provisions in Part 2 of this
Schedule.
Proceedings
215. Item 25 provides that if the AIC were a party to any legal proceedings pending before the
commencement of this Schedule, then upon commencement of this Schedule, the Commonwealth
will be substituted for the AIC as a party to the proceedings.
Contracts
216. Item 26 ensures that any contracts entered into by the AIC before the commencement of this
Schedule will continue to have effect as if entered into by the Commonwealth.
Appropriations
217. Item 27 provides that if the Consolidated Revenue Fund is appropriated under an Act to the
Department that administers the CR Act, for payment to the AIC or the CRC, then the appropriation
Act continues to apply after this Schedule commences as if there was an appropriation to the AIC
directly.
Reports
218. Item 28 specifies when the AIC and the CRC are required to provide a report (whether
financial statements or otherwise) for periods ending before and after the Schedule commences.
The purpose of subitem 28(3) is to enable a single report to be prepared where reports from the AIC
and CRC would otherwise be required.
Regulations
219. Item 29 provides that the Governor-General may make regulations prescribing matters of a
transitional nature relating to the amendments in Schedule 7, including the transfer of staff under
the new structure. Subitem 29(3) specifies some examples of what matters the regulations may
prescribe and subitem 29(4) ensures that these regulations have effect despite the Fair Work
Act 2009, the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and
the Public Service Act. Subitem 29(5) defines terms for the purposes of this item.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 33
X. NOTES ON SCHEDULE 8 - Amending the
Financial Management and Accountability
Act 1997
220. An explanation of the amendments proposed in Schedule 8 is provided in sequential order.
Updating section headings and notes
221. Item 1 amends the title of Part 2 of the Financial Management and Accountability
Act 1997 (FMA Act) to read "Part 2 - General provisions about definitions" removing the reference
to "offences", as offences are no longer specifically addressed in the FMA Act.
222. Item 2 removes the note under the definition of "Special Account" in section 5. The
reference in the note to the Financial Management Legislation Amendment Act 1999 is redundant
due to changes to the text of all relevant Special Accounts having been completed through the
Financial Framework Legislation Amendment Act 2005 and the Financial Framework Legislation
Amendment Act (No. 1) 2006.
223. Following item 2, the heading to section 31 which reads "Relevant Agency receipts" is
altered to read "Retaining prescribed receipts" in order to better describe the content of the section.
224. Item 3 amends the heading "Part 5 - Borrowing and investment" to read "Part 5 -
Borrowing, investment and involvement in companies". This reflects the addition of section 39A to
Part 5, dealing with the responsibility to inform Parliament about the involvement in a company, as
transferred from section 45 of the Commonwealth Authorities and Companies Act 1997 (CAC Act).
Movement to the FMA Act of requirement for Ministers to inform Parliament
about involvement with companies by their Departments, agencies and
certain bodies corporate
225. Item 4 inserts new section 39A, which requires the responsible Minister to inform
Parliament of involvement in a company by the Commonwealth, or by a prescribed body for which
the Minister is responsible. Subsection 39A(4) defines "prescribed body" as a body corporate that
is, or is included in, an Agency. This covers FMA Act agencies that encompass bodies corporate,
which are legally but not financially separate from the Commonwealth (such as the Australian
Communications and Media Authority or the Great Barrier Reef Marine Park Authority).
226. Events that could trigger the requirement for a notice to be tabled in Parliament include
formation (or participation in the formation) of a company, membership in a company, and
transactions involving shares in a company. Variations in rights attaching to shares or membership,
disposal of shares and cessation of membership, also require Ministerial notice to Parliament.
227. The word "company" is used in its general meaning, and hence covers involvement in
companies that are registered under foreign laws. Moreover, subsection 39A(4) defines "company"
to include a body of a kind prescribed by the regulations made under the FMA Act. This could
cover bodies corporate that are established for either for-profit or not-for-profit purposes, whether in
Australia or in a foreign jurisdiction.
228. In terms of actions relating to the registration of a company, the provision extends to
requiring notification about actions that result in the formation of a company, including broader
participation in the formation of a company.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 34
229. The provision has a broad coverage, given the breadth of the Commonwealth's involvement
in companies.2 The Commonwealth's participation in a company may fall short of direct
membership. It may, for example, include circumstances where the Commonwealth is not a
member, but a Minister has the ability to appoint a director (or other officer). In certain
circumstances, participation in the formation of such a company may also require notification under
the provision.
230. Responsibility to notify Parliament of the Commonwealth's involvement in companies is
currently contained in section 45 of the CAC Act. Section 45 of the CAC Act is repealed by
item 12 of Schedule 5. This provision is more appropriately located in the FMA Act, given that
Departments of State (which usually handle tabling of these notices on behalf of the Minister
responsible) are governed under the FMA Act.
231. Subsection 39A(3) provides exceptions to the notification requirements when authorised
investments are made by the Finance Minister or the Treasurer under section 39 of the FMA Act or
investments are made under the Future Fund Act 2006 (on the basis that the reporting to Parliament
is aimed at transparency on the use of companies in a governance-related form, rather than as a
statutorily authorised investment vehicle).
232. Subsection 39A(3) also exempts giving notice about involvements with companies by the
Commonwealth resulting from the transfer of unclaimed property under Part 9.7 of the
Corporations Act 2001 (consistent with section 45 of the CAC Act currently) and companies
conducted for the purposes of an intelligence or security agency (as defined by section 85ZL of the
Crimes Act 1914). The latter exemption continues the effect of regulation 8 of the
CAC Regulations, which has exempted the application of section 45 of the CAC Act to any such
companies since 1 January 1998.
Regulations to improve transparency of "interjurisdictional agencies"
233. Item 5 inserts a new Part 6A - Interjurisdictional agencies. Part 6A provides an enhanced
ability for the Commonwealth and participating State and Territory jurisdictions to be jointly
involved in the governance of FMA Act agencies that are interjurisdictional in nature. A similar
provision is proposed for interjurisdictional Commonwealth authorities (refer item 10 in
Schedule 5). This is consistent with the Governance Policy and with Recommendation 9.2 of the
Ahead of the Game: Blueprint for the Reform of Australian Government Administration Report,
which recommended ensuring that there are clear governance arrangements for interjurisdictional
entities.
234. The new Part 6A comprises a new section 43A. Subsection 43A(1) permits regulations,
under the FMA Act, to prescribe an agency as an "interjurisdictional agency", to prescribe the
persons who comprise an interjurisdictional agency to include State officers or employees, and to
prescribe a participating State/Territory Minister. The State/Territory Minister would ordinarily be
the Minister of a State or Territory who is allocated administrative oversight of the agency's
functions by that State and Territory.
235. Subsection 43A(2) authorises the making of regulations determining the types of reports,
documents and information, relating to the operations of an agency, that the Chief Executive of an
2
The List of Australian Government Bodies and Governance Relationships as at 1 October 2009 contains 214
companies in which the Australian Government, or a government body, is involved. This covers companies that the
Commonwealth does not control for the purposes of the CAC Act: refer pages xxiv to xxv.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 35
interjurisdictional agency may be required to provide to a participating State/Territory Minister.
Section 44A of the FMA Act requires the Chief Executive of an FMA Act agency to provide
information in relation to the operations of the Agency to the responsible Commonwealth Minister
or the Finance Minister. New subsection 43A(2) extends these existing requirements to a
participating State/Territory Minister. The regulations may also define the time limits for delivering
the requested information and the circumstances in which the information can be requested by the
State/Territory Minister.
Clarifying "proper use" of Commonwealth resources
236. Item 5A amends the definition of "proper use" of Commonwealth resources in
subsection 44(3) to explicitly include "economical" use.
237. Following item 5A, the heading to section 44, which reads "Promoting efficient, effective
and ethical use etc. of Commonwealth resources", is altered to read "Promoting proper use etc. of
Commonwealth resources" in order to describe the updated section.
Delegations not extending to requirement to report involvement in companies
to Parliament
238. Item 6 amends subsection 62(1) to take account of the new section 39A inserted by item 4.
Subsection 62(1) currently provides that the Finance Minister may delegate to an official any of the
Finance Minister's powers or functions under the FMA Act, except the power to make Finance
Minister's Orders. Item 6 extends this exception to the situation where the Finance Minister is
obliged by the new section 39A to inform Parliament of involvement in a company by the
Commonwealth or by a body corporate that is financially part of an Agency (including a
Department of State).
239. Item 7 amends subsection 62A(1) to take account of the new section 39A inserted by item 4.
Subsection 62A(1) currently provides that the Treasurer may delegate to an SES employee or
equivalent, or an Executive Level 2 employee or equivalent, any of the Treasurer's powers or
functions under the FMA Act. Item 7 exempts the situation where the Treasurer is obliged by the
new section 39A to inform Parliament of involvement in a company by the Commonwealth or a
prescribed agency that encompasses a body corporate, equivalent to the exception applying to the
Finance Minister under item 6.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 36
XI. NOTES ON SCHEDULE 9 - Amending the
National Transport Commission Act 2003
240. An explanation of the amendments to the National Transport Commission Act 2003 in this
Schedule is provided in sequential order, regarding the proposed full transfer of the National
Transport Commission (NTC) into the Commonwealth Authorities and Companies Act 1997
(CAC Act) fully (rather than being subject to only the annual reporting requirements of the
CAC Act, as applies, currently).
241. Item 1 inserts a note at the end of subsection 5(2) to indicate that the CAC Act applies to the
NTC. An equivalent note is in the enabling legislation of other Commonwealth authorities.
242. Item 2 repeals the existing paragraph 19(2)(b), concerning conflicts of interests of members
of the NTC, and substitutes a new paragraph. This is a consequential amendment required by the
repeal of section 31 of the NTC Act at Item 3. Instead of referring to section 31 of the NTC Act, the
new paragraph refers to sections 27F and 27J of the CAC Act.
243. Item 3 repeals section 31 of the NTC Act which deals with disclosure of interests by
members of the NTC. This is sufficiently covered by the comprehensive regime for disclosure of
interests in Subdivision B of Division 4 of Part 3 of the CAC Act.
244. Item 4 replaces section 38 of the NTC Act, which deals with the application of the CAC Act
to the NTC. The current subsection 38(1) provides that the NTC is not a Commonwealth authority
for the purposes of the CAC Act, but subsection 38(2) provides that certain provisions of the
CAC Act nevertheless apply to the NTC, subject to the qualifications mentioned in
subsection 38(3). In order for the CAC Act to apply to the NTC it is necessary to repeal the current
subsection 38(1), which in turn precludes the application of the current subsections 38(2) and 38(3).
245. The current subsections 38(4) and 38(5) are retained and renumbered in an updated
section 38 which deals solely with the annual report of the NTC. The current subsection 38(4)
provides that the annual report of the NTC must contain any information required by the agreement
between the Commonwealth, States, the Australian Capital Territory and the Northern Territory
entered into in relation to the NTC Act. This provision is renumbered as subsection 38(1). The
current subsection 38(5) provides that a copy of the annual report must be given to each member of
the Australian Transport Council. This provision is renumbered as subsection 38(2).
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 37
XII. NOTES ON SCHEDULE 10 - Amending the
Parliamentary Service Act 1999
246. An explanation of the amendments proposed in this Schedule is provided in sequential order.
247. Item 1 repeals subsection 66(6) of the Parliamentary Service Act 1999 (Parliamentary
Service Act). Item 2 replaces subsection 66(6) with a note which provides:
Note: Payments under this section are to be made out of money appropriated by
the Parliament.
248. The intention of the amendment is to clarify that subsection 66(6) of the Parliamentary
Service Act is not a special appropriation. Instead the appropriation authority for making the
payment is provided in an appropriation item that relates to an agency's outcomes, such as in an
Appropriation Act.
249. This amendment is consistent with similar clarifications made to the FMA Act and the Public
Service Act through the Financial Framework Legislation Amendment Act (No. 1) 2006.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 38
XIV. NOTES ON SCHEDULE 11 - Repeals
Part 1 - Acts Repealed
250. An explanation of the amendments proposed in Part 1 of Schedule 11 is provided below.
Appropriation (Dr Carmen Lawrence's Legal Costs) Act 1999-2000
251. Item 1 repeals the Appropriation (Dr Carmen Lawrence's Legal Costs) Act 1999-2000. The
Act authorised an appropriation from the Consolidated Revenue Fund (CRF) for the purpose of the
Commonwealth meeting certain legal expenses of the former member of the Australian Parliament.
The appropriation has been expended. Accordingly, the Act is redundant and can be repealed.
Appropriation (HIH Assistance) Act 2001
252. Item 2 repeals the Appropriation (HIH Assistance) Act 2001. The Act authorised an
appropriation from the CRF for the purpose of funding financial assistance to certain persons with a
claim upon a policy of insurance issued by the HIH Insurance Group. The appropriation has been
expended. Accordingly, the Act is redundant and can be repealed.
Appropriation (Supplementary Measures) Act (No. 1) 1999
253. Item 3 repeals the Appropriation (Supplementary Measures) Act (No. 1) 1999. The Act
authorised an appropriation from the CRF for the Book Industry Assistance Plan, and additional
funding for the Supported Accommodation Assistance Program. The appropriation has been
expended. Accordingly, the Act is redundant and can be repealed.
Appropriation (Supplementary Measures) Act (No. 2) 1999
254. Item 4 repeals the Appropriation (Supplementary Measures) Act (No. 2) 1999. The Act
authorised an appropriation from the CRF for certain environmental initiatives. The appropriation
has been expended. Accordingly, the Act is redundant and can be repealed.
Growth Centres (Financial Assistance) Act 1973
255. Item 5 repeals the Growth Centres (Financial Assistance) Act 1973. The Act authorised an
appropriation from the CRF to provide financial assistance to the States in respect to expenditure
for purposes connected with urban and regional development in certain areas during the year ending
on 30 June 1974. The appropriation has been expended. Accordingly, the Act is redundant and can
be repealed.
Land Commissions (Financial Assistance) Act 1973
256. Item 6 repeals the Land Commissions (Financial Assistance) Act 1973. The Act authorised
an appropriation from the CRF in addition to that of the Growth Centres (Financial Assistance)
Act 1973 to the States in respect to expenditure for purposes connected with urban and regional
development in certain areas during the year ending on 30 June 1974. The appropriation has been
expended. Accordingly, the Act is redundant and can be repealed.
Part 2 - Provisions repealed
257. An explanation of the amendments proposed in Part 2 of Schedule 11 is provided below.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 39
Aboriginal and Torres Strait Islander Act 2005 (Part 4B)
258. Item 7 repeals Part 4B of the Aboriginal and Torres Strait Islander Act 2005 which currently
provides for the Office of Evaluation and Audit (Indigenous Programs). The repeal of Part 4B
reflects the integration of the office into the Australian National Audit Office.
Aged Care or Disabled Persons Act 1954 (section 10KA)
259. Item 8 repeals section 10KA of the Aged Care or Disabled Persons Act 1954. This section
authorised an appropriation from the CRF for financial assistance payments to organisations in
respect to approved hostels and community care services for the purposes of Division 4 of Part III
or Part IIIA. Subsection 10D(16) of Division 4 of Part III and subsection 10GH(5) of Part IIIA
provide that such financial assistance is not payable on or following the commencement of the
Aged Care Act 1997. The Aged Care Act 1997 commenced on 1 October 1997. Accordingly, the
section is redundant and can be repealed.
Appropriation (Development Bank) Act 1975 (subsection 3(2))
260. Item 9 repeals subsection 3(2) of the Appropriation (Development Bank) Act 1975. This
subsection authorised appropriation from the CRF an amount not exceeding, or amounts in total not
exceeding, $20,000,000 for the purposes of section 85 of the Commonwealth Banks Act 1959. With
the repeal of section 85 of the Commonwealth Banks Act 1959 by Item 29 of the Schedule to the
Commonwealth Bank Sale Act 1995, this subsection is redundant and can be repealed.
CFM Sale Act 1996 (subsection 56(2))
261. Item 10 repeals subsection 56(2) of the CFM Sale Act 1996. This subsection authorised an
appropriation for the refund of a contribution to the cost of the administration of the Occupational
Health and Safety (Commonwealth Employment) Act 1991 (OHS Act) paid by Commonwealth
Funds Management Limited. The refund has been paid and the appropriation has been expended.
Accordingly, the subsection is redundant and can be repealed.
Commonwealth Funds Management Limited Act 1990 (subsections 7(2) and 8(2))
262. Item 11 repeals subsections 7(2) and 8(2) of the Commonwealth Funds Management Limited
Act 1990. These subsections authorised an appropriation for an amount equal to the minimum share
capital payable to Commonwealth Funds Management Limited in return for the receipt of shares.
The appropriation has been expended. Accordingly, the redundant subsections can be repealed.
CSL Sale Act 1993 (subsections 29(2) and 50(2))
263. Item 12 repeals subsections 29(2) and 50(2) of the CSL Sale Act 1993. Subsection 29(2)
authorised an appropriation from the CRF for the refund of a license fee under the Safety,
Rehabilitation and Compensation Act 1988 paid by Commonwealth Serum Laboratories.
Subsection 50(2) authorised an appropriation for the refund of a contribution to the cost of the
administration of the OHS Act paid by Commonwealth Serum Laboratories. The refunds have been
paid and both appropriations have been expended. Accordingly, the subsections are redundant and
can be repealed.
Hearing Services and AGHS Reform Act 1997 (Division 3 of Part 2)
264. Item 13 repeals Division 3 of Part 2 of the Hearing Service and AGHS Reform Act 1997.
Division 3 of Part 2 authorised the payment "to the nominated company, out of the Consolidated
Revenue Fund, [of] an amount equal to the balance of the Australian Government Health Service
Trust Account" and "an amount equal to the balance of the Australian Government Health Service
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 40
Reserve" at the "transfer time." The "transfer time" occurred at the time of the corporatisation of
the Australian Government Health Service into Health Services Australia Limited in 1997.
Accordingly, the Division is redundant and can be repealed.
Qantas Sale Act 1992 (section 18 and subsections 45(2), 46(1) and 46(2))
265. Item 14 repeals section 18 of the Qantas Sale Act 1992. Section 18 authorised an
appropriation from the CRF for the payment to Qantas Airways Limited of all or part of the money
payable for shares in Qantas Airways Limited that are to be issued to the Commonwealth, or its
nominee. Section 18 authorised an appropriation from the CRF for the discharge of certain
Commonwealth-guaranteed obligations in connection with Qantas Airways Limited and certain
obligations in connection with Qantas other than those guaranteed by the Commonwealth under a
Qantas Loan Guarantee Act as defined in paragraphs 16(4)(a) to (h). The sale of Qantas Airways
Limited has been completed. Accordingly, the section is redundant and can be repealed.
266. Items 15 and 17 repeal subsections 45(2) and 46(2) of the Qantas Sale Act 1992.
Subsection 45(2) authorised an appropriation from the CRF for the refund of a license fee under the
Safety, Rehabilitation and Compensation Act 1988 paid by Australian Airlines. Subsection 46(2)
authorises appropriation from the CRF for the refund of a contribution to the cost of the
administration of the OHS Act paid by Qantas or a Qantas subsidiary. The refunds have been paid
and both appropriations have been expended. Accordingly, the subsections are redundant and can
be repealed. Item 16 makes a consequential amendment to subsection 46(1).
Snowy Mountains Engineering Corporation Limited Sale Act 1993 (section 41)
267. Item 18 repeals section 41 of the Snowy Mountains Engineering Corporation Limited Sale
Act 1993. Section 41 authorised an appropriation for the refund of a contribution to the cost of the
administration of the OHS Act paid by Snowy Mountains Engineering Corporation. The refund has
been paid and the appropriation has been expended. Accordingly, the section can be repealed.
Student Assistance Act 1973 (subsection 3(1), sections 12M and 12N, and
paragraphs 56(1)(d) and 56(1)(f))
268. Items 19 to 22 repeal references to the Students (Financial Supplement) Account, which is a
Special Account under section 21 of the Financial Management and Accountability Act 1997 from
the Student Assistance Act 1973. The Special Account provided a mechanism for participating
corporations to make payments to students who were eligible under the Student Financial
Supplement Scheme (SFSS). In 2003, the SFSS was closed and the Act was subsequently amended
to remove the eligibility of students under the scheme from 22 May 2006. As the SFSS has ceased,
the Special Account and associated provisions can be repealed.
Telstra Corporation Act 1991 (sections 8AL and 8AS)
269. Item 23 repeals sections 8AL and 8AS of the Telstra Corporation Act 1991. Section 8AL
authorised an appropriation for the purposes of the payment or discharge of the costs, expenses and
other obligations incurred by the Commonwealth in connection with the Telstra sale scheme.
Section 8AS authorised an appropriation for the reimbursement of expenses incurred by Telstra or
its directors in giving assistance in connection with a Telstra sale scheme. As the Commonwealth
has no further equity in Telstra, the sections are redundant and can be repealed.
Revised Explanatory Memorandum to the Financial Framework Legislation Amendment Bill 2010 (Spring Sittings) 41
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