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2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HUMAN SERVICES LEGISLATION AMENDMENT BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by authority of the Hon. Joe Hockey, Minister for Human
Services)
HUMAN SERVICES LEGISLATION AMENDMENT BILL 2005
OUTLINE
The Human Services Legislation Amendment Bill 2005 (referred to in this Explanatory
Memorandum as "the Bill") provides for:
(a) the abolition of the governance boards of Centrelink and the Health
Insurance Commission (HIC); and
(b) the replacement of HIC (an authority with separate legal personality to the
Commonwealth) with Medicare Australia (a body that will form part of the
Commonwealth); and
(c) the creation of the offices of Chief Executive Officer (CEO) of Centrelink
and Medicare Australia, with statutory functions; and
(d) the establishment of new governance arrangements under which the CEOs
will be directly accountable to the Minister.
When HIC's staff transition to Medicare Australia, they will change their employment
framework and become subject to the Public Service Act 1999.
Despite these changes, the activities of HIC/Medicare Australia and Centrelink will not
change as a result of the Bill. Transitional arrangements will ensure that governance
changes do not disrupt service delivery to customers.
The governance changes for Centrelink and HIC are part of the implementation of the
Government's response to the review of corporate governance of statutory office
holders carried out by Mr John Uhrig. The objective of the review was to identify
issues surrounding existing governance arrangements and to provide options for
Government to improve the performance and get the best from statutory authorities
and office holders, and their accountability frameworks. The Government assessed
both Centrelink and HIC against Mr Uhrig's Executive Management Template and the
changes made by the Bill are consistent with that Template. The changes will improve
governance and accountability in both bodies.
It is appropriate to rename HIC as, after the changes made by the Bill, the successor
body to HIC will no longer be a commission. The naming of the new body "Medicare
Australia" reflects the fact that one of its key roles is the delivery of the Medicare
program. "Medicare" is also a name that commonly is known and identified with by
most Australians.
Medicare Australia and Centrelink will each consist of their respective CEOs and their
staff, but legally will be part of the Commonwealth. Both bodies will be prescribed
agencies for the purposes of the Financial Management and Accountability Act 1997.
FINANCIAL IMPACT STATEMENT
The Bill will have no financial impact.
ABBREVIATIONS
The following abbreviations are used in this explanatory memorandum:
Act, unless the context indicates otherwise, means the Health Insurance Commission
Act 1973;
HIC means the Health Insurance Commission;
Centrelink means the Commonwealth Services Delivery Agency;
Centrelink Act means the Commonwealth Services Delivery Agency Act 1997;
CEO means Chief Executive Officer; and
HeSA means Health eSignature Authority Pty Ltd (a subsidiary of HIC).
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NOTES ON CLAUSES
Part 1 - Preliminary
Clause 1 - Short Title
Clause 1 is a formal provision specifying the short title.
Clause 2 - Commencement
Clause 2(1) of the Bill provides that each provision of the Bill specified in column 1 of
the table commences, or is taken to have commenced, in accordance with column 2 of
the table. Any other statement in column 2 is taken to have effect according to its
terms.
Item 1 of the table provides that clauses 1 to 3 of the Bill (containing the short title,
the commencement provision and the provision explaining the operation of the
Schedules to the Bill) will commence on the day on which the Bill receives Royal
Assent.
Item 2 of the table provides that Schedule 1 of the Bill (that is, the amendments
relating to Centrelink) commences on a single day to be fixed by Proclamation (the
reference to a "single day" means that all of the provisions must be Proclaimed to
commence at the same time). However, if the provisions have not been proclaimed to
have commenced within the period of 6 months beginning on the day on which the Act
receives Royal Assent, the provisions will commence on the first day after the end of
that period.
Items 3, 5 and 7 of the table provide that items 1 and 2 of Schedule 2 (which amend
the long and short title of the Health Insurance Commission Act 1973) commence on a
single day to be fixed by Proclamation (the reference to a "single day" means that both
of the provisions must be proclaimed to commence at the same time). However, if the
provisions have not been proclaimed to have commenced within the period of 6
months beginning on the day on which the Act receives Royal Assent, the provisions
will commence on the first day after the end of that period. Items 4 and 6 of the table
provide for a slightly different commencement for items 3 and 28 of Schedule 2.
These items commence immediately after, and not at the same time, as the other items
of Schedule 2 because of a minor drafting technicality.
Clause 3 - Schedule(s)
Clause 3 provides that each Act that is specified in a Schedule to the Bill is amended or
repealed as set out in that Schedule and any other item in a Schedule has effect
according to its terms.
Schedule 1 to the Bill provides for amendments relating to Centrelink. Part 1 of
Schedule 1 deals with amendments to the Commonwealth Services Delivery Act 1997,
Part 2 contains consequential amendments to other legislation arising from the
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amendments to the Commonwealth Services Delivery Act 1997, while Part 3 contains
transitional provisions to ensure that governance changes do not disrupt Centrelink's
service delivery to customers and to cover other transitional issues such as reporting.
Schedule 2 to the Bill provides for amendments relating to the Health Insurance
Commission. Part 1 of Schedule 1 deals with amendments to the Health Insurance
Commission Act 1973, Part 2 contains consequential amendments to other legislation
arising from the amendments to the Health Insurance Commission Act 1973, while
Part 3 contains transitional provisions to ensure that governance changes do not
disrupt the Health Insurance Commission's service delivery to customers and to cover
other transitional issues such as reporting.
4
Schedule 1 - Amendments relating to the Commonwealth Services
Delivery Agency (Centrelink)
Part 1 - Amendment of the Commonwealth Services Delivery Agency
Act 1997
Item 1 - Section 3 (definition of Agency)
This item amends the definition of "Agency" in section 3 by removing the words "body
called the" from the definition. Centrelink does not have any legal personality separate
from the Commonwealth and the revised drafting of section 3 assists to make this
clear.
Item 2 - Section 3 (definition of appointed member)
This item repeals the definition of "appointed member" in section 3. Centrelink will no
longer have a Board and the definition is redundant.
Item 3 - Section 3 (definition of Board)
This item repeals the definition of "Board" in section 3. Centrelink will no longer have
a Board and the definition is redundant.
Item 4 - Section 3 (definition of Chairman)
This item repeals the definition of "Chairman" in section 3. Centrelink will no longer
have a Board and the definition is redundant.
Item 5 - Section 3
This item inserts a new definition of "Chief Executive Office", which refers to section
29 of the Centrelink Act. The insertion of the definition reflects the significance of the
new office of CEO. The new office has different functions and accountabilities to the
current office of CEO.
Item 6 - Section 3 (definition of member)
This item repeals the definition of "member" in section 3. Centrelink will no longer
have a Board and the definition is redundant.
Item 7 - Part 2 (heading)
This item repeals the existing heading for Part 2 - "Establishment, functions and
powers of the Agency" and substitutes the heading "Establishment of the Agency".
This is because of the insertion of a new Part 3 (with the repeal of the existing Part 3),
which deals with the powers and functions of the CEO. Relevant powers and
functions will now be vested in the CEO rather than in Centrelink.
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Item 8 - Subsection 6(1)
This item removes the words "A body called the" and substitutes "The" in section
6(1). Section 6(1) establishes Centrelink. Centrelink is not a body corporate and has
no legal personality separate from the Commonwealth.
Item 9 - Paragraph 6(2)(a)
This item repeals section 6(2)(a) which currently provides that the composition of
Centrelink includes the Board. Centrelink will no longer have a Board.
Item 10 - At the end of section 6
This item adds a new section 6(3) which provides that Commonwealth Services
Delivery Agency may also be known as Centrelink. The amendment recognises that
the Commonwealth Services Delivery Agency is commonly known as Centrelink.
Item 11 - After section 6
This item inserts a new section 6A which provides that the function of Centrelink is to
assist the CEO in the performance of the CEO's functions. The amendment is
necessary because other provisions of the Bill vest the statutory functions currently
held by Centrelink in the CEO.
Item 12 - Before section 7
This item first establishes a new Part 3 of the Centrelink Act "The Chief Executive
Officer", which will contain provision relating to the statutory office of Chief
Executive Officer. Relevant powers and functions will be vested in the CEO rather
than in Centrelink itself.
Secondly, the item establishes a new Division 1 of the new Part 3 "Powers and
functions of Chief Executive Officer". This Division, as the name suggests, will set out
the powers and functions of the CEO.
Item 13 - Subsection 7(1)
This item amends section 7(1) to require the CEO to obtain the Minister's prior
written approval before the CEO may enter into arrangements with the principal officer
of a Commonwealth authority for the provision of services. Currently, no Ministerial
approval is required. The amendment reflects the increased role of the Minister in the
governance of Centrelink.
Items 14 and 15 - Subsections 7(2) and at the end of section 7
These items amend section 7(2) and insert new sections 7(3), 7(4) and 7(5) into the
Centrelink Act.
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The amendments provide greater clarification of the type of arrangements that the
CEO may enter into with a principal officer of a Commonwealth authority for the
provision of Commonwealth services. The amendments are not, however, intended to
effect any change to the type of matters that may be covered in such arrangements.
The new section 7(3) give a number of examples of the type of matters that could be
included in service agreements.
The new section 7(4) provides that arrangements for the provision of Commonwealth
services may also include agreements covered by section 8A. This is because the Bill
inserts a new section 8A which will expressly provide for a principal officer of a
Commonwealth authority to enter into a written agreement with the CEO about the
exercise or performance of the CEO's powers or functions (see discussion below).
These agreements could cover, for example, requirements about consultation in some
circumstances. Service arrangements entered into under section 7 are likely, in
practice, to cover the issues that might otherwise be dealt with in agreements entered
into under the new section 8A.
The new section 7(5) confirms that the Minister's approval under section 7 to the CEO
entering into a service arrangement is not a legislative instrument. This is merely
stating what the position would be in any event under the Legislative Instruments Act
2003.
Item 16 - Subsection 8(1)
This item amends the heading of section 8 and the first sentence of section 8(1) so that
the section will now provide that functions listed are those of the CEO rather than
Centrelink itself. The only function of Centrelink will now be to assist the CEO in the
performance of the CEO's functions.
Item 17 - Paragraph 8(1)(b)
The item amends section 8(1)(b) by replacing the word "Agency" with "Chief
Executive Officer". This amendment is consequential upon the moving of functions
from Centrelink to the CEO.
Item 18 - Paragraph 8(1)(c)
This item amends section 8(1)(c) so that the Minister will be able to confer functions
on the CEO by written notice to the CEO. This differs from the current situation
which allows the Minister to confer functions on Centrelink by written notice to the
Chairman. The amendment is necessary because this Bill abolishes the position of
Chairman and vests statutory functions in the CEO rather than in Centrelink.
Item 19 - Paragraph 8(1)(d)
This item makes a consequential amendment to section 8(1)(d) (replacing "its" with
"his or her") which reflects other amendments to section 8(1) which have the effect
that the section now confers functions on the CEO rather than on Centrelink.
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Item 20 - Subsection 8(2)
This item repeals the existing section 8(2) which provides that a direction by the
Minister under section 8(1)(c) (conferring a functions on Centrelink) is a disallowable
instrument for the purposes of section 46A of the Acts Interpretation Act 1901. The
item inserts a new section 8(2) into the Act, which confirms that a Ministerial direction
under the new section 8(1)(c) (that is, a Ministerial direction conferring functions on
the CEO) is a legislative instrument. The new section 8(2) also clarifies that neither
section 42 nor Part 6 of the Legislative Instruments Act 2003 applies to the direction.
This section simply states what the position would otherwise be under the Legislative
Instruments Act 2003.
Section 42 of the Legislative Instruments Act 2003 provides for the disallowance of
legislative instruments on the same terms as was previously provided for by section
46A of the Acts Interpretation Act 1901. Part 6 of the Legislative Instruments Act
2003 provides for the "sunsetting" of legislative instruments (that is, their automatic
repeal after 10 years of being placed on the Legislative Instruments Register).
Item 21 - After section 8
This item inserts a new section 8A that allows a principal officer of a Commonwealth
authority to enter into a written agreement with the CEO about the exercise or
performance of the CEO's powers or functions. Such agreements are intended to be
entered into between the CEO and the secretaries of departments that are responsible
for program policy where services relating to relevant programs are delivered by
Centrelink. Such agreements may provide for such matters as the consultative process
between Centrelink and the relevant department.
The provision is not intended to change the law or current practice. Currently such
matters are provided for in service arrangements entered into pursuant to section 7 of
the Centrelink Act. The new section 7(4) will expressly provide that this may continue
to occur.
Item 22 - Subsection 9(1)
This item repeals section 9(1) and inserts a new section in its place. The new section
will allow the Minister to give written directions to the CEO about the performance or
exercise of the CEO's functions or powers. The current provision allows the Minister
to give directions to the Board about the performance of Centrelink's functions. The
amendment reflects the corporate governance changes to the structure of Centrelink
effected by the Bill, particularly the abolition of the Board and its Chairman, and the
conferring of functions and powers on the CEO. The item also makes a consequential
amendment to the heading of section 9(1) (replacing reference to performance of the
Agency's functions with a reference to the performance of the CEO's functions).
Item 23 - After subsection 9(1)
This item inserts new sections 9(1A) and 9(1B). These new sections clarify the type of
directions that the Minister may give to the CEO under the amended section 9(1). The
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power to give directions is intended to be broad and section (1A) confirms that
directions may relate to the objectives, strategies, policies or priorities of the CEO or
Centrelink, or the manner in which the CEO performs his or her functions or powers,
or the manner in which Centrelink performs its function.
Section 9(1B) limits the Minister's power to give directions by providing that
directions cannot relate to the performance or exercise of functions or powers in
relation to a particular individual or company. Thus, the Minister will not be able to
give directions about the exercise of discretion in particular cases (for example, in
relation to whether or not to grant a benefit to a particular individual under social
security laws) or about a particular recipient of services from Centrelink.
Section 9(1B) also includes a clarifying note to the effect that section 19 of the Public
Service Act 1999 provides that an Agency Head is not subject to direction by any
Minister in relation to the exercise of the powers by the Agency Head under Division 1
or 2 of Part 4 of that Act in relation to particular individuals. Section 9, as amended,
will not affect the operation of section 19 of the Public Service Act 1999.
Item 24 - Subsection 9(2)
This item amends section 9(2) so that the section now refers to the CEO's annual
report, rather than the annual report of the Agency (Centrelink). This is a
consequential change as, under the amendments effected by this Bill, the CEO rather
than Centrelink will have the obligation to prepare the annual report. The requirement
that Ministerial directions be noted in the annual report will be retained.
Item 25 - Subsection 9(3)
The new section 9(3) requires the CEO to comply with a Ministerial direction. The
current section 9(3) requires the Board to comply with a Ministerial direction. The
change is necessary given that the Board is being abolished.
The item also inserts a new section 9(4). This new section clarifies that a Ministerial
direction to the CEO given under section 9(1) is not a legislative instrument. This
section simply states what the position would otherwise be under the Legislative
Instruments Act 2003.
Item 26 - Section 10
This item repeals section 10 which currently requires the Minister to consult with the
Board before giving directions under sections 8(1)(c) or 9. The section is now
redundant given amendments made by this Bill to abolish the Board.
The item also inserts a new section 10 "Minister may request information", section 11
"Management of Agency" and section 12 "Delegation".
The new section 10 allows the Minister to access information about the performance
or exercise of the CEO's functions or powers or the operation of Centrelink from the
CEO. The section replaces the existing section 15 (which the Bill repeals) which
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currently allows the Minister to obtain information about the operation of Centrelink
from the Board.
The Minister will now access information about the performance or exercise of the
CEO's functions or powers or the operation of Centrelink by making a request of the
CEO pursuant to section 10(1). The new section 10(2) provides that the CEO must
comply with any such request within a reasonable time. Some of the information held
by the CEO is subject to secrecy and confidentiality laws. The new section 10 will not
override such laws. Where secrecy or confidentiality laws apply, the Minister will
access the information held by the CEO in accordance with such laws.
The new section 10(3) clarifies that a request made in writing by the Minister under
section 10(1) is not a legislative instrument. This section simply states what the
position would otherwise be under the Legislative Instruments Act 2003.
The new section 11 provides that the CEO is, under the Minister, responsible for:
(a) deciding the objectives, strategies, policies and priorities of Centrelink;
(b) managing Centrelink; and
(c) ensuring Centrelink performs its function in a proper, efficient and effective
manner (consistent with similar obligations on the head of an agency under
the Financial Management and Accountability Act 1997 and regulations).
This section reflects the central role of both the Minister and the CEO in the revised
governance arrangements for Centrelink.
The new section 12(1) provides that the CEO may delegate, in writing, all or any of
his/her functions or powers under the Centrelink Act or any other Act to an employee
of Centrelink. The new section 12(3) allows the CEO to delegate to Centrelink
employees all or any of the functions or powers delegated to the CEO under another
Act. These provisions will ensure that Centrelink employees are able to exercise
statutory powers in a manner that will enable the efficient delivery of programs. The
new sections 12(1) and 12(3) are broadly similar in effect to the existing section 33,
which is repealed by this Bill.
The new sections 12(2) and 12(4) place limits on the CEO's power to delegate under
sections 12(1) and 12(3), by providing that the CEO may not delegate functions or
powers under another Act, or functions or powers that have been delegated to the
CEO under another Act, in a manner that is inconsistent with the express provisions of
that other Act. Some legislation places express limitations on sub-delegation and it is
not intended that the Centrelink Act will override such limitations.
Item 27 - Part 3
This item repeals Part 3 of the Act "The Board of Management of the Agency". The
Part (and each of the Divisions and sections in it) is redundant given that Centrelink
will no longer have a Board.
Items 28 and 29 - Part 4 (heading) and Division 1 of Part 4 (heading)
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These items repeal headings to reflect other amendments made by this Bill.
Item 30 - Subsection 29(2)
This item amends section 29(2) so as to provide for appointment of the CEO by the
Minister. Currently, the CEO is appointed by the Board, but the Board is being
abolished by the amendments to be made by this Bill. The CEO is accountable to the
Minister and it is consistent with good governance that the CEO be appointed by the
Minister.
Item 31 - At the end of section 29
This item adds a new section 29(4) which provides that the CEO holds office for the
period specified in the instrument of appointment, such period not to exceed 5 years.
Item 32 - Section 30
Item 32 inserts standard provisions for the CEO for remuneration (new section 30),
leave of absence (section 30A), other terms and conditions of appointment (section
30B) and termination of appointment (section 30C) that normally apply to statutory
office holders.
The new section 30C(3) provides that the Minister must terminate the appointment of
the CEO if the Minister considers the performance of the CEO has been unsatisfactory
for a significant period of time. The Minister is ultimately accountable for the
performance of Centrelink and the CEO, and it is inappropriate for the CEO to retain
office if the Minister considers that the performance of the CEO is unsatisfactory.
While the Minister will need to have a basis for any view he or she may have that the
CEO's performance is unsatisfactory, it is intended that the Minister is to have a broad
discretion as to the factors to be taken into account in assessing performance and the
relative importance of those factors. It is intended that a period of 3 months would be
a "significant period of time" for the purposes of this section.
Item 33 - Subsection 31(1)
This item amends section 31(1) so that appointments of an acting CEO will now be
made by the Minister and not the Board. The amendment is necessary given that the
Board is being abolished and that the Minister will now have the power to appoint the
CEO. The circumstances in which an acting CEO may be appointed do not change
from the current position.
Item 34 - Subsection 31(2)
This item makes an amendment to section 31(2) so that the section is now specified as
relating to anything done in relation to a person purporting to act under an
appointment of acting CEO, as well as to anything actually done by that person. The
amendment will provide greater certainty to the operations of Centrelink in instances
11
where an issue of the nature set out in sections 31(2)(a) to (d) arises in relation to an
acting CEO.
Item 35 - Paragraph 31(2)(b)
This item makes a minor grammatical change to section 31(2)(b) by deleting the words
"in or". The amendment brings the section in line with the standard wording for
sections of this type. The amendment will not affect the operation or interpretation of
the section, as any defect or irregularity in an appointment would also be a defect or
irregularity in connection with an appointment.
Item 36 - Sections 32 and 33
This item repeals section 32 (Duties) and section 33 (Delegation by CEO).
Section 32 currently provides that the CEO is, under the Board, responsible for the day
to day administration of Centrelink and the control of its operations. This section has
now been replaced by the new section 11.
Section 33 provides for the terms on which the CEO may delegate his or her functions
or powers. This section is now replaced by the new section 12.
Item 37 - Section 34
This item amends section 34 so that the CEO may resign by giving written notice to
the Minister, rather than the Chairman. The amendment is necessary to reflect
corporate governance changes to the structure of Centrelink effected by the Bill,
particularly the abolition of the position of Chairman and the direct accountability of
the CEO to the Minister.
Item 38 - Division 2 of Part 4 (heading)
This item changes a heading to reflect other amendments made by this Bill.
Item 39 - Section 35(1)
This item changes a reference from "Division" to "Part" to reflect other amendments
made by this Bill.
Item 40 - Section 36
This item repeals section 36 "Services of certain officer etc. to be made available to
Agency". The section currently provides for the CEO to arrange with the principal
officer of a Commonwealth authority for the services of officers or employees of the
authority to be made available to Centrelink. The section is not necessary (the Public
Service Act 1999 gives the CEO sufficient power to enter into such arrangements) and
the section can therefore be deleted. The CEO will continue to be able to enter into
such arrangements if he or she choses to do so.
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Item 41 - Subsection 38(1)
This item amends section 38(1) (which deals with the use of protected names and
symbols) so that written consent under the section must be sought from the CEO and
not the Chairman. The amendment is necessary given that the Bill abolishes the
position of Chairman. The item does not otherwise amend the section which will
continue to operate in the same manner.
Item 42 - Section 39
This item first repeals the existing section 39. The existing section 39 relates to the
application of the Audit Act 1901. The section is now redundant as the Audit Act 1901
was repealed on 1 January 1998 by the Audit (Transitional and Miscellaneous)
Amendment Act 1997.
This item also inserts a new section 39 which clarifies that the CEO may charge for
services he or she provides in connection with the performance of his or her functions.
The section is included to remove any argument that may arise at law that the CEO
cannot charge for services performed as part of his or her functions.
Item 43 - Subsection 40(1)
This item repeals the existing section 40(1) dealing with annual reports and replaces it
with a new section. The new section imposes standard annual reporting requirements
on the CEO.
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Part 2 - Consequential amendments
Items 44 to 61 - Health Insurance Act 1973
These items amend the Health Insurance Act 1973 by:
(a) repealing the current definition of "CEO" and inserting a new definition of
"Centrelink CEO" which will have the same meaning as the old definition.
The new definition is included to avoid confusion between the Centrelink
and Medicare Australia CEO, as the Act will now also include a reference
to the CEO of Medicare Australia;
(b) repealing the current definition of "employee" and inserting a new
definition of "employee of Centrelink" which will have the same meaning as
the old definition of employee. The new definition is included to avoid
confusion between the Centrelink and Medicare Australia employees, as the
Act will now also refer to employees of Medicare Australia;
(c) replacing references to "CEO" with "Centrelink CEO" to reflect the
amendment noted at paragraph (a); and
(d) replacing references to "employee" with "employee of Centrelink" to reflect
the amendment noted at paragraph (b).
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Part 3 - Transitional Provisions
Item 62 - Definitions
Item 62(1) defines certain terms which are used in the Part. The definitions are
referred to below in respect of the items in which they are first used. Item 62(2)
provides that unless a contrary intention is expressed, a reference to a law in the Part
(however described) is a reference to a law of the Commonwealth. The term
"commencement time" is defined to mean the time when Part 3 commences.
Item 63 - CEO to continue
Item 63 allows for the person holding office as the CEO immediately before the
commencement time to continue as the CEO after the commencement time, without
the need for a new appointment by the Minister. This will not have the effect of
extending the term of the CEO.
The functions and accountabilities of the CEO after the commencement time are
significantly different from the functions and accountabilities before the
commencement time. Thus, this item statutorily terminates the appointment of the
CEO at the commencement time and then reappoints them to the new position of CEO
at the commencement time. This statutory appointment will not prevent the
termination provisions in the Centrelink Act from applying to the CEO in the normal
manner.
Item 64 - Operation of laws - things done by, or in relation to, Centrelink
Item 64(1) provides that if anything was done by or in relation to Centrelink or the
"Board" or "Chairman" (defined in item 62(1) respectively as the Board of
Centrelink and the Chairman of Centrelink under the Centrelink Act in force before the
commencement time) before the commencement time for the purposes of any law,
after the commencement time it is taken to have been done by, or in relation to, the
CEO. Item 64(5) makes it clear that making an instrument is "doing a thing" for the
purposes of this item. Other provisions of this Bill abolish the Board and the office of
Chairman and vest what were the statutory functions of Centrelink in the CEO.
The item is intended to avoid the need for things to be done again. If, for example, a
the Chairman did something under a law before the commencement time, after the
commencement time the CEO will be taken to have done that thing.
Item 64(2) makes it clear that, after the commencement time, things are taken to have
been done under a law as amended by Schedule 1 of this Bill.
After the commencement time, it will normally be appropriate for things to be taken to
have been done by the CEO, as the CEO will have the statutory functions that
Centrelink had before the commencement time. However, it is possible that in some
cases item 64(1) will lead to an inappropriate result. To cover this possibility, item
64(3) empowers the Minister to make an instrument providing that item 64(1) does not
15
apply in a particular case, or it applies as if the reference to the CEO in that item was a
reference to the Commonwealth or to Centrelink. Item 64(6) confirms that this type of
Ministerial instrument is not a legislative instrument. This is merely stating what the
position would be in any event under the Legislative Instruments Act 2003.
If the Minister makes an instrument under item 64(3) in relation to a specified thing,
item 64(4) confirms that regulations can be made in relation to that thing providing
that after the commencement time the thing is taken to have been done by someone
other than the CEO, the Commonwealth or Centrelink.
Item 65 - References in instruments
Item 65(1) provides for instruments made before the commencement time that refer to
Centrelink, the Board or the Chairman to continue to have effect after the
commencement time as if such references were a reference to the CEO. Other
provisions of this Bill abolish the Board and the office of Chairman and vest what were
the statutory functions of Centrelink in the CEO. The term "instrument" is defined
very broadly in item 62(1) and includes contracts.
The item is intended to avoid the need for instruments to be amended or replaced.
After the commencement time, it will normally be appropriate for instruments to be
taken to refer to the CEO, as the CEO will have the statutory functions that Centrelink
had before the commencement time. However, it is possible that in some cases item
65(1) will lead to an inappropriate result. To cover this possibility, item 65(2)
empowers the Minister to make an instrument providing that item 65(1) does not apply
in a particular case, or it applies as if the reference to the CEO in that item was a
reference to the Commonwealth or to Centrelink. Item 65(4) confirms that this type of
Ministerial instrument is not a legislative instrument. This is merely stating what the
position would be in any event under the Legislative Instruments Act 2003.
If the Minister makes an instrument under item 65(2) in relation to a specified
reference, item 65(3) confirms that regulations can be made in relation to that
reference providing that after the commencement time the reference is taken to be to
someone other than the CEO, the Commonwealth or Centrelink.
Item 66 - Transfer of records
Item 66 provides that, at the commencement time, the records and documents of
Centrelink become the records and documents of the CEO. This change is appropriate
as other provisions of this Bill vest what were the statutory functions of Centrelink in
the CEO. It is appropriate that the CEO has custody of the records and documents
relating to the exercise of his or her functions.
Item 67 - Financial statements and other reporting requirements
Item 67(1) in effect requires the CEO, within 3 months after the commencement time,
to provide financial statements for Centrelink for so much of the reporting period as
ends at the commencement time. It is important that separate financial statements be
16
prepared for so much of the reporting period as ends at the commencement time as, at
the commencement time, responsibility for Centrelink's finances will move from the
Chairman to the CEO (this change in responsibility will be made by an amendment to
the regulations made under the Financial Management and Accountability Act 1997).
The CEO needs to be empowered to sign such financial statements as the office of
Chairman will be abolished by other provisions of this Bill.
Item 67(2) provides for the CEO to provide any reports (other than financial
statements) relating to Centrelink required under law for a period where the reporting
period ends after the commencement period. Thus, for example, if immediately before
the commencement time a law required Centrelink to submit an annual report on a
particular matter on 30 June 2006 covering the period 1 July 2005 to 30 June 2006, if
the commencement time is 1 October 2005, item 67(2) requires the CEO to submit a
report for Centrelink on 30 June 2006 covering the period 1 July 2005 to 30
September 2005.
Item 67(3) provides that, if under item 67(2), the CEO is required to provide a report
for a part of a reporting period and the CEO is also required to provide a similar report
for the remainder of the reporting period, the CEO may meet the requirements in a
single report for that reporting period. This means that, in relation to the example in
the previous paragraph, the CEO could chose to provide a single report for the period
1 July 2005 to 30 June 2006.
Item 67(4) requires the CEO to provide any reports that are required by law but which
Centrelink, the Chairman or the Board have not provided by the commencement time.
Item 68 - Substitution of parties to proceedings
Item 68 is intended to facilitate the smooth running of court and tribunal proceedings
by substituting the CEO as the appropriate party in any proceedings on foot at the
commencement time in which Centrelink, the Board or the Chairman is a party. Other
provisions of this Bill abolish the Board and the office of Chairman and vest what were
the statutory functions of Centrelink in the CEO.
Item 69 - Constitutional safety net - acquisition of property
It is not expected that any provisions in this Schedule of the Bill will result in an
acquisition of property within the meaning of that expression in the Constitution.
However, item 69 is the standard Constitutional safety net provision.
Item 70 - Delegation by the Minister
Item 70(1) allows the Minister to delegate his or her powers and functions under Part
3 of Schedule 1 of the Bill to the Secretary of the Department, an SES employee (or
acting SES employee) of the Department of Human Services or the CEO. Item 70(2)
provides that, in exercising powers or functions so delegated, the delegate must
comply with any directions of the Minister.
17
Item 70(3) provides that a power delegated to the CEO under item 70(1) must not be
sub-delegated by the CEO to an employee of Centrelink. Item 70(3) is necessary
because otherwise the new section 12(3) of the Centrelink Act (to be inserted by this
Bill) would allow for such sub-delegation to occur.
Item 71 - Regulations
Item 71(1) permits the Governor-General to make regulations prescribing matters
required or permitted by Schedule 1 of this Bill or necessary or convenient to be
prescribed for carrying out or giving effect to the Schedule. Item 71(2) clarifies that,
in particular, regulations may be made prescribing matters of a transitional nature
(including prescribing any saving or application provisions) relating to the amendments
or repeals made by Schedule 1. Matters of a transitional nature could include matters
relating to the employment of Centrelink staff. For example, a regulation could be
made covering an employment matter that commenced, but did not conclude by, the
commencement time.
18
Schedule 2 - Amendments relating to the Health Insurance
Commission
Part 1 - Amendment of the Health Insurance Commission Act 1973
Item 1 - Title
This is a formal provision changing the title of the Act.
Item 2 - Section 1
This is a formal provision changing the short title of the Act.
Item 3 - Subsection 3(1)
This item omits "(1)" which becomes redundant following the repeal of section 3(2)
(item 26 repeals section 3(2)).
Item 4 - Subsection 3(1) (definition of Australian Public Service)
This item repeals the definition of "Australian Public Service" in section 3(1) of the
Act as, following the amendments made by this Bill, the term is no longer used in the
Act.
Item 5 - Subsection 3(1) (definition of authorised officer)
This item amends the definition of "authorised officer" in section 3(1) so that it now
relevantly refers to the "Chief Executive Officer or an employee who is appointed by
the Chief Executive Officer" rather than the "Managing Director or an officer of the
Commission who is appointed by the Managing Director". The office of Managing
Director is abolished by this Bill and a new office of CEO is established.
Item 6 - Subsection 3(1)
This item inserts a new definition of "benefit" in section 3(1) of the Act. The definition
is the same as the current definition of "benefit" in section 7(5) of the Act. This Bill
repeals section 7(5).
Item 7 - Subsection 3(1) (definition of Chairperson)
This item repeals the definition of "Chairperson" in section 3(1) of the Act as,
following the amendments made by this Bill, the term is no longer used in the Act.
Item 8 - Subsection 3(1)
This item inserts a new definition of "Chief Executive Officer" for the purposes of the
Act by reference to the new section 8AG of the Act (to be inserted by this Bill). The
19
new definition reflects amendments to the Bill which result in the establishment of a
new statutory office of CEO of Medicare Australia.
Item 9 - Subsection 3(1) (definition of Commission)
This item repeals the definition of "Commission" in section 3(1) of the Act as,
following the amendments made by this Bill, the term is no longer used in the Act.
Item 10 - Subsection 3(1)
This item inserts a new definition of "Commonwealth authority" in section 3(1) of the
Act. The definition is the same as the current definition of "Commonwealth authority"
in section 7(5) of the Act. This Bill repeals section 7(5).
Item 11 - Subsection 3(1)
This item inserts a new definition of "Commonwealth service" in section 3(1) of the
Act. The definition is the same as the current definition of "Commonwealth service" in
section 7(5) of the Act. This Bill repeals section 7(5).
Item 12 - Subsection 3(1)
This item inserts a new definition of "employee" in section 3(1) of the Act. The
definition is similar to the current definition of "employee" in section 7(5) of the Act.
This Bill repeals section 7(5). The definition reflects that, under the amendments made
by this Bill, HIC is replaced by Medicare Australia.
Item 13 - Subsection 3(1) (definition of Finance Minister)
This item repeals the definition of "Finance Minister" in section 3(1) of the Act as,
following the amendments made by this Bill, the term is no longer used in the Act.
Item 14 - Subsection 3(1) (definition of Managing Director)
This item repeals the definition of "Managing Director" in section 3(1) of the Act as,
following the amendments made by this Bill, the term is no longer used in the Act.
Item 15 - Subsection 3(1) (definition of medicare functions)
This item amends the definition of "medicare functions" to replace the reference to
Managing Director with a reference to the CEO. The office of Managing Director is
abolished by this Bill and a new office of CEO is established.
Item 16 - Subsection 3(1) (definition of officer)
This item repeals the definition of "officer" in section 3(1) of the Act as, following the
amendments made by this Bill, the term is no longer used in the Act.
Items 17, 18 and 19 - Subsection 3(1) (definition of officer assisting)
20
These items amend the definition of "officer assisting" in section 3(1) of the Act in 2
ways. First, the amendments clarify that the existing reference in the definition to
"Division 4" is a reference to Division 4 of Part IID of the Act. Secondly the items
amend the definition by omitting the phrase "officer of the Commission" (twice
occurring) and substituting "employee". Officers of HIC, that is the staff of HIC, will
become the staff of Medicare Australia under the amendments made by this Bill. The
term "employee" means the staff of Medicare Australia (see item 12).
Item 20 - Subsection 3(1) (definition of part-time Commissioner)
This item repeals the definition of "part-time Commissioner" in section 3(1) of the Act
as, following the amendments made by this Bill, the term is no longer used in the Act.
Item 21 - Subsection 3(1)
This item inserts a new definition of "principal officer" in section 3(1) of the Act. The
definition is the same as the current definition of "principal officer" in section 7(5) of
the Act. This Bill repeals section 7(5).
Item 22 - Subsection 3(1)
This item inserts a new definition of "service arrangements" in section 3(1) of the Act.
The definition is the same as the current definition of "service arrangements" in section
7(5) of the Act. This Bill repeals section 7(5).
Item 23 - Subsection 3(1) (definition of service delivery functions)
This item amends the definition of "service delivery functions" in section 3(1) of the
Act by replacing the reference to HIC with a reference to the CEO. Under the changes
made by this Bill, HIC is replaced by Medicare Australia and the functions of HIC
become functions of the CEO.
Item 24 - Subsection 3(1) (definition of spare capacity functions)
This item repeals the definition of "spare capacity functions" in section 3(1) of the Act
as, following the amendments made by this Bill, the term is no longer used in the Act.
Item 25 - Subsection 3(1) (definition of warrant premises)
This item amends the definition of "warrant premises" in section 3(1) of the Act by
clarifying that that the existing reference in the definition to "Division 4" is a reference
to Division 4 of Part IID of the Act.
Item 26 - Subsection 3(2)
This item repeals section 3(2) of the Act. The amendments to be made by the Bill
(together with amendments to be made to the regulations made under the Financial
Management and Accountability Act 1997) will result in Medicare Australia operating
21
under the Financial Management and Accountability Act 1997 financial framework.
This makes section 3(2) of the Act redundant.
Item 27 - Part II (heading)
This item amends a heading to reflect other amendments made by the Act.
Item 28 - Section 4
This item repeals section 4 of the Act, which establishes HIC, and inserts new sections
4 and 4A. The current section 4 needs to be repealed so that HIC can be replaced by
Medicare Australia.
New Section 4 "Establishment of Medicare Australia"
The new section 4(1) establishes Medicare Australia. The new section 4(2) provides
that Medicare Australia comprises the CEO and the employees of Medicare Australia.
Medicare Australia is not a body corporate and has no legal personality separate from
the Commonwealth.
New Section 4A "Function of Medicare Australia"
The new section 4A provides that the function of Medicare Australia is to assist the
CEO in the performance of the CEO's functions. The amendment is necessary because
other provisions of this Bill vest the statutory functions currently held by HIC in the
CEO.
Item 29 - Before section 5
This item includes new headings reflecting other amendments made by this Bill.
Item 30 - Section 5
This item changes the existing section 5 of the Act into section 5(1), to allow the
insertion of a new section 5(2).
Item 31 - Section 5
This item amends section 5 of the Act (to be renumbered section 5(1)) so that the
section now sets out functions of the CEO rather than the functions of HIC. While the
Bill establishes Medicare Australia to replace HIC, HIC's functions become the
functions of the CEO.
This item also amends the heading to section 5 to reflect the amendments made by this
Bill.
Item 32 - Paragraphs 5(c) and (d)
This item amends section 5 of the Act (to be renumbered section 5(1)) by amending
sections 5(c) and (d), and adding section 5(1)(e). Section 5(e) has been renumbered to
section 5(1)(f).
22
Currently, HIC has "spare capacity functions" under sections 5(c) and 8 of the Act.
The CEO will not have these functions. It is intended that anything that might have
been done by HIC under the spare capacity functions would be done by the CEO under
another function. Section 8 will be repealed by this Bill (see item 39).
Currently, HIC has "additional functions" under sections 5(d) and 8AA of the Act.
These additional functions include functions conferred on HIC by other legislation
(other than the Health Insurance Act 1973), functions conferred on HIC by regulations
made under the Act and functions conferred on HIC by Ministerial determination. In
lieu of these additional functions, the CEO will have functions under the new sections
5(1)(c),5(1)(d) and 5(1)(e) of the Act. Section 5(1)(c) will provide that the CEO's
functions will include any functions conferred on the CEO under any other Act.
Section 5(1)(d) will provide that the CEO's functions include any functions that the
Minister, in writing, directs the CEO to perform. Section 8AA will be repealed by this
Bill (see item 39). Section 5(1)(e) will provide that the CEO's functions may be
conferred under regulations.
It is intended that the functions conferred on the CEO under the Health Insurance Act
1973 are the CEO's medicare functions (see item 34 and the new section 6) rather than
functions conferred on the CEO under the new section 5(1)(c).
All functions currently conferred on HIC by regulation or Ministerial determination
made under section 8AA of the Act will be able to be conferred on the CEO by
Ministerial direction or regulation under the new sections 5(1)(d) and 5(1)(e)
respectively.
Item 33 - At the end of section 5
This item inserts a new section 5(2) into the Act, which confirms that a Ministerial
direction under the new section 5(1)(d) (that is, a Ministerial direction conferring
functions on the CEO) is a legislative instrument. The new section 5(2) also clarifies
that neither section 42 nor Part 6 of the Legislative Instruments Act 2003 applies to
the direction. This section simply states what the position would otherwise be under
the Legislative Instruments Act 2003.
Section 42 of the Legislative Instruments Act 2003 provides for the disallowance of
legislative instruments on the same terms as was previously provided for by section
46A of the Acts Interpretation Act 1901. Part 6 of the Legislative Instruments Act
2003 provides for the "sunsetting" of legislative instruments (that is, their automatic
repeal after 10 years of being placed on the Legislative Instruments Register).
Item 34 - Section 6
This item repeals section 6 of the Act "Commission's medicare functions" and replaces
it with a new section 6 "Chief Executive Officer's medicare functions". The new
section 6 is in similar terms to the repealed section, with the necessary drafting changes
to reflect that, following the amendments made by the Bill, functions will be conferred
on the CEO rather than HIC.
23
Items 35 and 36 - Subsections 7(1) and (2)
These items make minor amendments to sections 7(1) and 7(2) of the Act to reflect
that, following the amendments made by the Bill, functions will be conferred on the
CEO rather than HIC. The CEO will enter into service arrangements with the
principal officer of other Commonwealth authorities. Currently, HIC enters into such
arrangements.
Items 37 and 38 - Subsections 7(3), 7(4), 7(5) and 7(6)
These items amend section 7(3) and insert new sections 7(4), 7(5) and 7(6) into the
Centrelink Act.
The amendments provide greater clarification of the type of arrangements that the
CEO may enter into with a principal officer of a Commonwealth authority for the
provision of Commonwealth services. The amendments are not, however, intended to
effect any change to the type of matters that may be covered in such arrangements.
The new section 7(4) gives a number of examples of the type of matters that could be
included in service agreements.
The new section 7(5) provides that arrangements for the provision of Commonwealth
services may also include agreements covered by section 7A. This is because the Bill
inserts a new section 7A which will expressly provide for a principal officer of a
Commonwealth authority to enter into a written agreement with the CEO about the
exercise or performance of the CEO's powers or functions (see discussion below).
These agreements could cover, for example, requirements about consultation in some
circumstances. Service arrangements entered into under section 7 are likely, in
practice, to cover the issues that might otherwise be dealt with in agreements entered
into under the new section 7A. The new section 7A is in similar terms to the current
section 8JA of the Act. This Bill repeals section 8JA (see item 40).
The new section 7(6) confirms that the Minister's approval under section 7 to the CEO
entering into a service arrangement is not a legislative instrument. This is merely
stating what the position would be in any event under the Legislative Instruments Act
2003.
These items repeal the existing section 7(4) of the Act. Section 7(4) currently provides
that service arrangements may provide for the payment of amounts to HIC. This
provision reflects the position that HIC is presently covered by the Commonwealth
Authorities and Companies Act 1997 financial framework. Medicare Australia will be
covered by the Financial Management and Accountability Act 1997 financial
framework and, accordingly, service arrangements would not normally provide for the
actual payment of moneys to Medicare Australia. The current section 7(4) is therefore
unnecessary. However, service arrangements could continue to provide for the
payment of moneys if the CEO entered into a service arrangement with an authority
that was not financially part of the Commonwealth; that is, an authority covered by the
Commonwealth Authorities and Companies Act 1997 financial framework.
24
These items also repeal the current section 7(5) of the Act. This section defines a
number of terms but, under the amendments made by this Bill, these definitions have
been moved to section 3(1) of the Act.
Item 39 - Sections 8 to 8AB
This item repeals sections 8, 8AA and 8AB of the Act.
Sections 8 and 8AA relate to functions of the HIC. Generally, under the amendments
to be made by the Bill, the functions of HIC will become the functions of the CEO.
However, the CEO will not have a function equivalent to the spare capacity functions
of HIC described in section 8 of the Act. The CEO will have broadly equivalent
functions to the additional functions of HIC described in section 8AA of the Act.
These functions of the CEO will be set out in the new sections 5(1)(c), 5(1)(d) and
5(1)(e) (to be inserted by item 32).
Section 8AB of the Act currently enables HIC to perform functions conferred by a law
of a State or Territory in certain circumstances. The CEO will also be able to perform
functions conferred by a law of a State or Territory in certain circumstances. The
CEO's capacity in this regard will be set out in the new sections 8AD, 8AE and 8AF of
the Act (to be inserted by this item - see below).
This item also inserts a number of new sections into the Act, which are described
below.
New Section 7A "Agreements about exercise and performance of Chief Executive
Officer's powers and functions
The item inserts a new section 7A, that allows a Minister or a principal officer of a
Commonwealth authority to enter into a written agreement with the CEO about the
exercise or performance of the CEO's powers or functions. Such agreements are
intended to be entered into between the CEO and either a Minister (other than the
Minister for Human Services) and the secretaries of departments that are responsible
for program policy where services relating to relevant programs are delivered by
Medicare Australia. Such agreements may provide for such matters as the consultative
process between Medicare Australia and the relevant Department.
Currently such matters could be provided for in service arrangements entered into
pursuant to section 7 of the Act. The new section 7(5) will expressly provide that this
may continue to occur.
The new section 7A is broadly similar to the current section 8JA of the Act. The Bill
will repeal section 8JA (item 40).
New Section 8 "Ministerial directions about exercise and performance of Chief
Executive Officer's powers and functions"
The item inserts a new section 8 into the Act that empowers the Minister to give
written directions to the CEO. The power to give directions is intended to be broad
and section 8(2) provides that directions may relate to the objectives, strategies,
policies or priorities of the CEO or Medicare Australia, or the manner in which the
25
CEO performs his or her functions or powers, or the manner in which Medicare
Australia performs its function.
The new section 8(3) limits the Minister's power to give directions by providing that
directions cannot relate to the performance or exercise of functions or powers in
relation to a particular individual or company. Thus, the Minister will not be able to
give directions about the exercise of discretion in particular cases (for example, in
relation to whether or not to grant a benefit to a particular individual under a health
program) or about a particular recipient of services from Medicare Australia.
The new section 8(3) also includes a clarifying note to the effect that section 19 of the
Public Service Act 1999 provides that an Agency Head is not subject to direction by
any Minister in relation to the exercise of the powers by the Agency Head under
Division 1 or 2 of Part 4 of that Act in relation to particular individuals. Section 8 of
the Act will not affect the operation of section 19 of the Public Service Act 1999.
The new section 8(4) requires particulars of Ministerial directions under section 8 in a
financial year to be included in the CEO's annual report. The new section 8(5) places
a positive obligation on the CEO to ensure that Ministerial directions given under
section 8 are complied with.
The new section 8(6) clarifies that a Ministerial direction to the CEO given under
section 8(1) is not a legislative instrument. This section simply states what the
position would otherwise be under the Legislative Instruments Act 2003.
New Section 8AA "Minister may request information"
The item inserts a new section 8AA giving the Minister the right to access information
about the performance or exercise of the CEO's functions or powers or the operation
of Medicare Australia. The rights given to the Minister by the new section 8AA are
similar to the Minister's current right to obtain information about the HIC under the
Commonwealth Authorities and Companies Act 1998.
The new section 8AA(2) provides that the CEO must comply with any Ministerial
request for information within a reasonable time. Some of the information held by the
CEO is subject to secrecy and confidentiality laws. The new section 8AA will not
override such laws. Where secrecy or confidentiality laws apply, the Minister will
access the information held by CEO in accordance with such laws.
The new section 8AA(3) clarifies that a request made in writing by the Minister under
section 8AA(1) is not a legislative instrument. This section simply states what the
position would otherwise be under the Legislative Instruments Act 2003.
New Section 8AB "Management of Medicare Australia"
The new section 8AB provides that the CEO is, under the Minister, responsible for:
a) deciding the objectives, strategies, policies and priorities of Medicare Australia;
b) managing Medicare Australia; and
c) ensuring that Medicare Australia performs its function in a proper, efficient and
effective manner (consistent with similar obligations on the head of an agency
26
under the Financial Management and Accountability Act 1997 and
regulations).
This section reflects the central role of both the Minister and the CEO in the revised
governance arrangements for Medicare Australia.
New Section 8AC "Delegation by Chief Executive Officer"
The new section 8AC(1) provides that the CEO may delegate, in writing, all or any of
his/her functions or powers under the Act or any other Act to an employee of
Medicare Australia. The new section 8AC(3) allows the CEO to delegate to Medicare
Australia employees all or any of the functions or powers delegated to the CEO under
another Act. These provisions will ensure that Medicare Australia employees are able
to exercise statutory powers in a manner that will enable the efficient delivery of
programs.
The new sections 8AC(2) and 8AC(4) place limits on the CEO's power to delegate
under sections 8AC(1) and 8AC(3), by providing that the CEO may not delegate
functions or powers under another Act, or functions or powers that have been
delegated to the CEO under another Act, in a manner that is inconsistent with the
express provisions of that other Act. Some legislation places express limitations on
sub-delegation and it is not intended that the Act will override such limitations.
New Sections 8AD, 8AE and 8AF
This item inserts new sections 8AD, 8AE and 8AF. The sections permit a law of a
State or a Territory to confer powers or functions, or impose duties, on the CEO.
However the new section 8AD(3) provides that the CEO cannot perform a duty or
function, or exercise a power, under a law of a State or Territory without the written
approval of the Minister.
The new sections 8AD, 8AE and 8AF are standard provisions covering the conferral of
functions or powers, and the imposition of duties, on Commonwealth officers by State
laws. The sections recognise that there are constitutional doctrines (particularly in
light of the decision of the High Court in R v Hughes (2000) 202 CLR 535) that
restrict the duties that may be imposed on a Commonwealth officer under State laws.
It is possible that a State or Territory government may, at some point, wish to harness
the systems or expertise of Medicare Australia to deliver a State or Territory program.
These new sections provide a framework which would allow a State or Territory,
through legislation, to achieve this, should the Minister give his or her written
approval.
New Division 2
The item creates a new Division 2 "Appointment etc of the Chief Executive Officer" of
the new Part IIA "The Chief Executive Officer". This amendment reflects other
amendments made by this Bill.
New section 8AG "Appointment"
Section 8AG provides for the appointment of the CEO by the Minister. The CEO is
accountable to the Minister and it is consistent with good governance that the CEO be
27
appointed by the Minister. The CEO will hold office for the period specified in the
instrument of appointment, such period not to exceed 5 years. The CEO will hold
office on a full time basis.
New sections 8AH "Remuneration", 8AI "Leave of absence", 8AJ "Other terms and
conditions" and 8AK "Termination of appointment"
This item inserts standard provisions for the CEO for remuneration (new section
8AH), leave of absence (section 8AI), other terms and conditions of appointment
(section 8AJ) and termination of appointment (section 8AK) that normally apply to
statutory office holders.
The new section 8AK(3) provides that the Minister must terminate the appointment of
the CEO if the Minister considers the performance of the CEO has been unsatisfactory
for a significant period of time. The Minister is ultimately accountable for the
performance of Medicare Australia and the CEO, and it is inappropriate for the CEO
to retain office if the Minister considers that the performance of the CEO is
unsatisfactory. While the Minister will need to have a basis for any view he or she may
have that the CEO's performance is unsatisfactory, it is intended that the Minister is to
have a broad discretion as to the factors to be taken into account in assessing
performance and the relative importance of those factors. It is intended that a period
of 3 months would be a "significant period of time" for the purposes of this section.
Section 8AL "Acting Chief Executive Officer"
The new section 8AL empowers the Minister to appoint an acting CEO. The
provision is in the standard form. The new section replaces the existing section 25 of
the Act, which is in similar terms. This Bill repeals section 25 (item 64).
New section 8AM
The new section 8AM allows the CEO to resign by giving written notice to the
Minister.
Item 40 - Part IIC
This item repeals Part IIC "General Powers of the Commission" which includes section
8G "Powers of Commission", section 8H "Delegation", section 8HA "Commission
may operate outside Australia", section 8J "Directions by Minister" and section 8JA
"Agreements about functions etc". The repeal of Part IIC reflects the Bill's
replacement of HIC with Medicare Australia and the vesting of HIC's functions in the
CEO.
The current section 8G (which sets out certain powers of the HIC) will no longer be
necessary after the amendments made by this Bill. The CEO will be able to exercise
the executive power of the Commonwealth and the CEO does not need to be given
specific statutory powers of the type mentioned in the current section 8G. .
The current section 8H will be replaced by the new section 8AC (item 39), the current
section 8J will be replaced by the new section 8 (item 39) and the current section 8JA
will be replaced by the new section 7A (item 39).
28
The current section 8HA (which says that HIC may operate outside Australia) is no
longer necessary. The CEO and Medicare Australia will be part of the Commonwealth
and will not require legislation in order to operate outside Australia.
Item 41 - Part IID (heading)
This item amends a heading to reflect other amendments made by this Bill.
Items 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53 and 54 - Sections 8L(1), 8M,
8N(1), 8N(2)(a), 8N(3), 8P(1), 8Q(1)(b), 8Q(1)(c), 8Q(3) and 8Q(4)
These items make consequential amendments to sections 8L(1), 8M, 8N(1), 8N(2)(a),
8N(3), 8P(1), 8Q(1)(b), 8Q(1)(c), 8Q(3) and 8Q(4) to reflect other amendments made
by this Bill. The office of Managing Director is abolished by this Bill and, accordingly,
the current investigative powers of the Managing Director under Part IID of the Act
will become powers of the CEO. The Bill also provides for the functions of the HIC
to become functions of the CEO. Section 3(1) of the Act currently defines HIC's staff
to be "officers". This Bill amends section 3(1) (item 12) to define the staff of
Medicare Australia as "employees".
Item 55 - Subsection 8S(2)
This item amends section 8S(2) (which deals with self-incrimination) so that reference
is now made to both sections 137.1 and 137.2 of the Criminal Code (rather than
section 137.2 only as is currently provided). Section 137.1 relates to the provision of
false or misleading information, while section 137.2 relates to the provision of false or
misleading documents. Both of these sections are need to be mentioned in the
exemption to the protection offered by section 8S(2).
Items 56, 57, 58, 59, 60, 61, 62 and 63 - Sections 8U(6), 8Y(2)(b), 8ZM(1),
8ZM(2), 8ZN(1), 8ZN(2)(b), 8ZQ(1) and 8ZQ(2)
These items make consequential amendments to sections 8U(6), 8Y(2)(b), 8ZM(1),
8ZM(2), 8ZN(1), 8ZN(2)(b), 8ZQ(1) and 8ZQ(2) to reflect other amendments made
by this Bill. The office of Managing Director is abolished by this Bill and, accordingly,
the current investigative powers of the Managing Director under Part IID of the Act
will become powers of the CEO.
Item 64 - Parts III, IV and V
This item repeals Part III "Constitution and meetings of the Health Insurance
Commission", Part IV "The Managing Director and staff of the Health Insurance
Commission" and Part V "Finance" of the Act.
Part III of the Act currently includes provisions relating to the appointment of, and the
holding of meetings by, Commissioners of HIC. Medicare Australia will not have a
Board and these provisions will become redundant.
29
Part IV of the Act currently includes provisions relating to the appointment of the
Managing Director. The Bill abolishes this office by repealing these provisions. Part
IV also includes provisions giving HIC the power to engage staff on terms and
conditions determined by the Commission. These provisions will be repealed as
Medicare Australia's staff will be engaged under the Public Service Act 1999. Section
29 of the Act (which is in Part IV) currently allows HIC to make arrangements with
the Secretary of a Department for staff secondments. This provision is no longer
necessary, as the Public Service Act 1999 is sufficiently flexible to permit short term
staff transfers. Section 32 (which is also in Part IV) was a transitional provision in
relation to long service leave that applied to staff who moved from certain private
health funds to HIC in the 1970s. A transitional provision in this Bill (item 721) will
preserve staff entitlements.
Part V of the Act currently includes provisions relating to finance. HIC is currently
covered by the Commonwealth Authorities and Companies Act 1997 financial
framework. Medicare Australia will be covered by the Financial Management and
Accountability Act 1997 financial framework and the provisions of Part V of the Act
would be unnecessary or inappropriate.
This item also inserts a new Part III "Staff of Medicare Australia", that includes a new
section 20 "Staff" and a new section 21 "Consultants".
The new section 20(1) provides that the staff of Medicare Australia are to be persons
engaged under the Public Service Act 1999. The new section 20(2) provides that the
CEO and employees assisting him or her will be a Statutory Agency for the purposes
of the Public Service Act 1999 and that the CEO will be Head of that Statutory
Agency. This provision is the standard provision for statutory agencies.
The new section 21 allows the CEO to engage consultants. This power will be broad
enough to enable the CEO to engage people as advisors. For example, the CEO could
use this power to engage people to be members of a standing committee on
compliance, which could advise the CEO in relation to program integrity issues
pertaining to the CEO's functions.
Item 65 - Section 41A
This item repeals section 41A, which currently allows the Minister to delegate his or
her powers under the Act. Following the amendments to the Act effected by this Bill,
the Minister will not have any powers under the Act that are suitable for delegation.
Items 66, 67, 68, 69, 70, 71, 72, 73, 74 and 75 - Sections 41C and 41E
These items make consequential amendments to sections 41C and 41E to reflect other
amendments made by this Bill, in particular the replacement of HIC by Medicare
Australia, which has no legal personality separate from the Commonwealth.
Section 41C currently protects the name "medicare". This item amends section 41C so
that the protection also extends to the name "Medicare Australia".
30
Item 76 - After section 41E
This item inserts a new section 41F which clarifies that the CEO may charge fees for
services he or she provides in connection with the performance of his or her functions.
The section is included to remove any argument that may arise at law that the CEO
cannot charge for services performed as part of his or her functions.
Items 77, 78 and 79 - Section 42
These items amend section 42 of the Act, which currently requires a number of
additional matters to be included in HIC's annual report. A reference to the
Commonwealth Authorities and Companies Act 1997 will be deleted, as Medicare
Australia will not be subject to the Commonwealth Authorities and Companies Act
1997 financial framework. Section 42 will provide that the additional matters currently
required to be included in HIC's annual report must be included in the CEO's annual
report.
Section 42 will also be amended to impose the standard annual reporting requirements
on the CEO.
This item also amends a heading as a consequence of other changes made by the item.
31
Part 2 - Consequential amendments
The Bill will make a number of consequential amendments to other Acts as follows:
Item 80 - Administrative Decisions (Judicial Review) Act 1977
The Bill amends this Act by omitting reference to the "Health Insurance Commission"
in paragraph (k) of Schedule 2 (the current effect of the reference in Schedule 2 is to
exempt decisions of HIC in respect of commercial activities from the application of
section 13 of the Act, which requires the giving of reasons for decisions). It is not
intended that a corresponding exemption apply to Medicare Australia, hence reference
to Medicare Australia is not to be made in paragraph (k) of Schedule 2.
A transitional provision applies to ensure the ongoing operation of the exemption to
HIC decisions made prior to the commencement date.
Item 81 - Aged Care Act 1997
The Bill makes a minor amendment to section 86-3(c) of this Act by omitting the
"Health Insurance Commission" and substituting "Chief Executive Officer of Medicare
Australia", reflecting that the Bill establishes Medicare Australia (which replaces HIC)
with HIC's functions and powers being vested in the new position of CEO.
Items 82 and 83 - Age Discrimination Act 2004
The Bill makes minor amendments to section 42(5) of this Act, (changing references
from "Health Insurance Commission" to "Chief Executive Officer of Medicare
Australia") reflecting that the Bill establishes Medicare Australia (which replaces HIC)
with HIC's functions and powers being vested in the new position of CEO.
Items 84 to 89 - A New Tax System (Family Assistance) (Administration) Act 1999
The Bill amends this Act by:
(a) omitting references to the "Health Insurance Commission" and replacing
those references with "Medicare Australia", reflecting that the Bill
establishes Medicare Australia (which replaces HIC); and
(b) omitting references to the "Managing Director of the Commission" or the
"Managing Director of the Health Insurance Commission", and replacing
those references with the "Chief Executive Officer of Medicare Australia"
reflecting that the Bill establishes Medicare Australia (which replaces HIC)
with HIC's functions and powers being vested in the new position of CEO.
The Bill also adds a new section (ba) to the definition of "protected information"
which clarifies that the definition will continue to cover information about a person
obtained by an officer under the family assistance law, that was held in the records of
the Health Insurance Commission, even if such information is not transferred to the
new Medicare Australia.
32
Items 90 and 91 - Freedom of Information Act 1982
The Bill amends this Act by omitting reference to the "Health Insurance Commission"
in Division 1 of Part II of Schedule 2, and replacing the reference with "Medicare
Australia", reflecting the Bill's establishment of Medicare Australia (which replaces
HIC).
Items 92 to 203 - Health and Other Services (Compensation) Act 1995
The Bill amends this Act by:
(a) repealing definitions in the Act that are now redundant (including
definitions for "Commission", "Managing Director" and "officer of the
Commission") reflecting that the Bill establishes Medicare Australia (which
replaces HIC) with HIC's functions and powers being vested in the new
position of CEO;
(b) inserting new definitions in section 3(1) of the Act (specifically definitions
for "Medicare Australia CEO" and "employee of Medicare Australia") to
reflect the establishment of Medicare Australia as part of the
Commonwealth with relevant functions and powers being vested in the new
position of CEO;
(c) replacing references to the "Health Insurance Commission Act 1973" with
"Medicare Australia Act 1973" to reflect the name change to that Act
effected by the Bill;
(d) replacing references to "officer of the Commission" (the definition which is,
as mentioned above, deleted) with "employee of Medicare Australia" (a
definition which is, as mentioned above, has been inserted in section 3(1) of
the Act) reflecting that Medicare Australia employees will be
Commonwealth employees engaged under the terms of the Public Service
Act 1999;
(e) omitting references to the "Commission" (currently defined as the Health
Insurance Commission) and replacing those references with "Medicare
Australia CEO" reflecting that the Bill establishes Medicare Australia
(which replaces HIC) with HIC's functions and powers being vested in the
new position of CEO;
(f) omitting references to "Managing Director" (currently defined as the
Managing Director of the Health Insurance Commission) and replacing
those references with "Medicare Australia CEO" reflecting that the Bill
establishes Medicare Australia (which replaces HIC) with HIC's functions
and powers being vested in the new position of CEO; and
(g) making some consequential grammatical changes to provisions to give
effect to the above.
Items 204 and 205 - Health and Other Services (Compensation) Care Charges Act
1995
The Bill amends this Act by omitting references to the "Commission" (being the Health
Insurance Commission) in sections 6 and 8 and replacing such references with
33
"Medicare Australia CEO" reflecting that the Bill establishes Medicare Australia
(which replaces HIC) with HIC's functions and powers being vested in the new
position of CEO.
Items 206 to 395 - Health Insurance Act 1973
The Bill amends this Act by:
(a) repealing definitions in the Act that are now redundant (specifically
definitions for "Commission" and "officer" in section 3(1), the definition of
"Commission staff member" in sections 3EA(7) and 3F(10) and the
definition of "General Manager" (which is a reference to the former title of
the Managing Director) in section 8(1A)) reflecting that the Bill establishes
Medicare Australia (which replaces HIC);
(b) inserting new definitions in section 3(1) of the Act (specifically definitions
for "Medicare Australia CEO" and "employee of Medicare Australia")
reflecting that the Bill establishes Medicare Australia (which replaces HIC)
with HIC's functions and powers being vested in the new position of CEO;
(c) replacing references to the "Health Insurance Commission Act 1973" with
"Medicare Australia Act 1973" to reflect the name change to that Act
effected by the Bill;
(d) replacing references to "officer of the Commission" (the definition for
"officer" is, as mentioned above, deleted) with "employee of Medicare
Australia" (a definition for which is, as mentioned above, inserted in section
3(1) of the Act) reflecting that Medicare Australia employees will be
Commonwealth employees engaged under the terms of the Public Service
Act 1999;
(e) omitting references to the "Commission" (currently defined as the Health
Insurance Commission) and replacing such references with "Medicare
Australia CEO" reflecting that the Bill establishes Medicare Australia
(which replaces HIC) with HIC's functions and powers being vested in the
new position of CEO;
(f) omitting references to "Managing Director of the Commission", "Managing
Director" or "General Manager" (which is a reference to the former title of
the Managing Director) and replacing such references with the "Medicare
Australia CEO" reflecting that the Bill establishes Medicare Australia
(which replaces HIC) with HIC's functions and powers being vested in the
new position of CEO; and
(g) making some consequential grammatical changes to provisions to give
effect to the above.
Items 396 and 397 - Hearing Services Administration Act 1997
The Bill amends this Act by amending the definition of "body" in section 21(10) so as
to provide that a body for the purposes of section 21 includes the Chief Executive
Officer of Medicare Australia, and deleting notes to sections 21(6) and 21(7) are now
redundant because they refer to the HIC.
34
Item 398 - Income Tax Assessment Act 1936
The Bill amends section 16(4) of this Act by omitting reference to the "Health
Insurance Commission" reflecting the Bill's abolition of the Health Insurance
Commission and replacing such reference with "the Chief Executive Officer of
Medicare Australia" reflecting the establishment of Medicare Australia, with relevant
functions, powers and duties being invested in the new position of CEO.
Items 399 to 549 - Medical Indemnity Act 2002
The Bill amends this Act by:
(a) repealing definitions in the Act that are now redundant (specifically
definitions for "HIC" and "Managing Director") reflecting that the Bill
establishes Medicare Australia (which replaces HIC) with HIC's functions
and powers being vested in the new position of CEO;
(b) inserting a new definition of "Medicare Australia CEO" in the Act to reflect
the establishment of Medicare Australia as part of the Commonwealth, with
relevant functions and powers being invested in the new position of CEO;
(c) replacing references to the "Health Insurance Commission Act 1973" with
"Medicare Australia Act 1973" to reflect the name change to that Act
effected by the Bill;
(d) omitting references to "HIC" (being currently defined as the Health
Insurance Commission) and replacing such references with "Medicare
Australia CEO" reflecting that the Bill establishes Medicare Australia
(which replaces HIC) with HIC's functions and powers being vested in the
new position of CEO;
(e) omitting references to "Managing Director" and replacing such references
with "Medicare Australia CEO" reflecting that the Bill establishes Medicare
Australia (which replaces HIC) with HIC's functions and powers being
vested in the new position of CEO; and
(f) making some consequential grammatical changes to provisions to give
effect to the above.
Item 550 - Medical Indemnity (Prudential Supervision and Product Standards) Act
2003
The Bill amends this Act by omitting references to "the Health Insurance Commission"
in section 26D(2)(b) and replacing such references with "Chief Executive Officer of
Medicare Australia" reflecting that the Bill establishes Medicare Australia (which
replaces HIC) with HIC's functions and powers being vested in the CEO.
Items 551 to 605 - National Health Act 1953
The Bill amends this Act by:
(a) repealing definitions in the Act that are now redundant (specifically
definitions for "Commission" and "Managing Director") reflecting that the
35
Bill establishes Medicare Australia (which replaces HIC) with HIC's
functions and powers being vested in the new position of CEO;
(b) inserting a new definition of "Medicare Australia CEO" in the Act to reflect
the establishment of Medicare Australia as part of the Commonwealth, with
relevant functions and powers being vested in the new position of CEO;
(c) replacing references to the "Health Insurance Commission Act 1973" with
"Medicare Australia Act 1973" to reflect the name change to that Act
effected by the Bill;
(d) omitting references to the "Commission" (being currently defined as the
Health Insurance Commission) "Health Insurance Commission" or "HIC"
and replacing such references with "Medicare Australia CEO" reflecting
that the Bill establishes Medicare Australia (which replaces HIC) with
HIC's functions and powers being vested in the new position of CEO;
(e) omitting references to "Managing Director" and replacing such references
with "Medicare Australia CEO" reflecting that the Bill establishes Medicare
Australia (which replaces HIC) with HIC's functions and powers being
vested in the new position of CEO; and
(f) making some consequential grammatical changes to provisions to give
effect to the above.
Item 606 - Occupational Health and Safety (Commonwealth Employment) Act
1991
The Bill omits reference to the "Health Insurance Commission" in Schedule 1 (which
includes the Health Insurance Commission as a "Government business enterprise" for
the purposes of this Act) reflecting that the Bill establishes Medicare Australia (which
replaces HIC), and that Medicare Australia will be a statutory authority .
Items 607 to 709 - Private Health Insurance Incentives Act 1998
The Bill amends this Act by:
(a) repealing definitions in the Act that are now redundant (specifically
definitions for "HIC" and "Managing Director") reflecting that the Bill
establishes Medicare Australia (which replaces HIC) with HIC's functions
and powers being vested in the new position of CEO;
(b) inserting new definitions in section 20-5 of the Act to reflect the
establishment of Medicare Australia as part of the Commonwealth, with
relevant functions powers and duties being invested in the Chief Executive
Officer, specifically definitions for "Medicare Australia CEO" and
"employee of Medicare Australia";
(c) subject to paragraph (f) below, omitting references to "HIC" (being
currently defined as the Health Insurance Commission) and replacing such
references with "Medicare Australia CEO" reflecting that the Bill
establishes Medicare Australia (which replaces HIC) with HIC's functions
and powers being vested in the new position of CEO;
(d) omitting references to "Managing Director" and replacing such references
with "Chief Executive Officer" (to be defined as the Chief Executive
Officer of Medicare Australia) reflecting that the Bill establishes Medicare
36
Australia (which replaces HIC) with HIC's functions and powers being
vested in the new position of new position of CEO;
(e) amending the Act so that references to officers of the HIC or staff of HIC
are replaced with reference to officers of Medicare Australia or employees
of Medicare Australia, as necessary; and
(f) making some consequential grammatical changes to provisions to give
effect to the above.
Item 710 - Remuneration and Allowances Act 1990
The Bill repeals the row relating to the "General Manager of the Health Insurance
Commission" in Part 3 of Schedule 2, as the position no longer exists.
Items 711 to 713 - Social Security Act 1991
The Bill amends this Act by:
(a) omitting references to the "Health Insurance Commission" and replacing
such references with "Medicare Australia" reflecting that the Bill
establishes Medicare Australia (which replaces HIC); and
(b) amending the definition of "protected information" at section 23(1) of the
Act so that it will continue to apply to information about a person obtained
by an officer under the family assistance law, that was held in the records of
the HIC.
37
Part 3 - Transitional Provisions
Item 714 - Definitions
Item 714(1) defines certain terms which are used in this Part. The definitions are
referred to below in respect of the items in which they are first used. Item 714(2)
provides that unless a contrary intention is expressed, a reference to a law in the Part
(however described) is a reference to a law of the Commonwealth. The term
"commencement time" is defined to mean the time when this Part 3 commences.
Item 715 - Managing Director to become CEO
The office of Managing Director will cease to exist upon the commencement of
Schedule 2 to the Bill. Item 715 allows for the person holding office as the
"Managing Director" (defined in item 714(1) as the Managing Director of HIC under
the Act in force before the commencement time) immediately before the
commencement time to become the CEO after the commencement time, without the
need for a new appointment by the Minister. This twill not have the effect of
extending the term of the person appointed as Managing Director.
This statutory appointment will not prevent the termination provisions in the Act from
applying to the CEO in the normal manner.
Item 716 - Operation of laws - things done by, or in relation to, HIC
Item 716(1) provides that, if anything was done by or in relation to HIC or a
"Commissioner" (defined in item 714(1) respectively as the Commissioner of HIC
under the Act in force before the commencement time) or the Managing Director or
"HeSA" (defined in item 714(1) as Health eSignature Authority Pty Ltd) before the
commencement time for the purposes of any law, after the commencement time it is
taken to have been done by, or in relation to, the CEO. Item 716(5) makes it clear that
making an instrument is "doing a thing" for the purposes of this item. Other provisions
of this Bill replace HIC with Medicare Australia, abolish the offices of Commissioners
and the Managing Director and vest what were the statutory functions of HIC in the
CEO. HeSA is a wholly owned subsidiary of HIC. The assets and liabilities of HeSA
will become the assets and liabilities of the Commonwealth (item 718) and HeSA will
cease to carry on business (the CEO will continue HeSA's business operations). It is
expected that, following the commencement time, HeSA will be deregistered as a
company under the provisions of the Corporations Act 2001.
This item is intended to avoid the need for things to be done again. If, for example, a
the Managing Director did something under a law before the commencement time,
after the commencement time the CEO will be taken to have done that thing.
Item 716(2) makes it clear that, after the commencement time, things are taken to have
been done under a law as amended by Schedule 2 of this Bill.
38
After the commencement time, it will normally be appropriate for things to be taken to
have been done by the CEO, as the CEO will have the statutory functions that HIC had
before the commencement time. However, it is possible that in some cases item
716(1) will lead to an inappropriate result. To cover this possibility, item 716(3)
empowers the Minister to make an instrument providing that item 716(1) does not
apply in a particular case, or it applies as if the reference to the CEO in that item was a
reference to the Commonwealth or to Medicare Australia. Item 716(6) confirms that
this type of Ministerial instrument is not a legislative instrument. This is merely stating
what the position would be in any event under the Legislative Instruments Act 2003.
If the Minister makes an instrument under item 716(3) in relation to a specified thing,
item 716(4) confirms that regulations can be made in relation to that thing providing
that after the commencement time the thing is taken to have been done by someone
other than the CEO, the Commonwealth or Medicare Australia.
Item 717 - References in instruments
Item 717(1) provides for instruments made before the commencement time that refer
to HIC, a Commissioner, the Managing Director or HeSA to continue to have effect
after the commencement time as if such references were a reference to the CEO.
Other provisions of this Bill replace HIC with Medicare Australia, abolish the offices
of Commissioners and the Managing Director and vest what were the statutory
functions of HIC in the CEO. The term "instrument" is defined very broadly in item
714(1) and includes contracts.
Item 717(2) provides for instruments made before the commencement time that refer
to an officer of HIC to continue to have effect after the commencement time as if such
references were a reference to an employee of Medicare Australia.
The item is intended to avoid the need for instruments to be amended or replaced.
After the commencement time, it will normally be appropriate for instruments to be
taken to refer to the CEO, as the CEO will have the statutory functions that HIC had
before the commencement time. However, it is possible that in some cases item
717(1) will lead to an inappropriate result. To cover this possibility, item 717(3)
empowers the Minister to make an instrument providing that:
items 717(1) or 717(2) do not apply in a particular case, or
item 717(1) applies as if the reference to the CEO in that item was a reference
to the Commonwealth or to Medicare Australia, or
item 717(2) applies as if the reference to an employee of Medicare Australia in
that item was a reference to the CEO.
Item 717(6) confirms that this type of Ministerial instrument is not a legislative
instrument. This is merely stating what the position would be in any event under the
Legislative Instruments Act 2003.
If the Minister makes an instrument under item 717(3)(a) in relation to a specified
reference, item 717(4) confirms that regulations can be made in relation to that
39
reference providing that after the commencement time the reference is taken to be to
someone other than the CEO, the Commonwealth or Medicare Australia.
Item 718(3) also provides for the continuation of certain instruments relating the assets
and liabilities transferred by item 718. Item 717(5) provides that Item 717 has
operation subject to item 718(3), to ensure that items 717 and 718 do not operate on
the same provision of an instrument in different ways. However, it is possible that item
717 may apply to some provisions in an instrument and item 718 may apply to other
provisions in the same instrument.
Item 718 - Transfer of assets and liabilities to the Commonwealth
Item 718(1) provides that, at the commencement time, the "assets" and "liabilities" of
HIC will become the assets and liabilities of the Commonwealth. The Commonwealth
will become HIC's successor in law in relation to those assets and liabilities. Other
provisions of this Bill replace HIC with Medicare Australia. Medicare Australia will
not have its own assets or liabilities separate from the Commonwealth. Legally,
Medicare Australia will be part of the Commonwealth.
The terms "asset" and "liability" are defined broadly in item 714(1). However, the
term "asset" does not include a right, power, privilege or immunity conferred by an
Act or by regulations or other subordinate legislation made under an Act.
Item 718(2) provides that, at the commencement time, the assets and liabilities of
HeSA will become the assets and liabilities of the Commonwealth in the same way as
assets and liabilities of HIC become assets and liabilities of the Commonwealth. HeSA
is a wholly owned subsidiary of HIC. HeSA will cease to carry on business and the
CEO will continue HeSA's business operations. It is expected that, following the
commencement time, HeSA will be deregistered as a company under the provisions of
the Corporations Act 2001.
Item 718(3) relates to instruments in force immediately before the commencement time
that refer to HIC or HeSA and that relate to the assets or liabilities of HIC or HeSA.
The item provides that a reference to HIC or to HeSA in such an instrument is taken to
be read as a reference to the Commonwealth as necessary to give effect to items
718(1) and 718(2). Item 717 will also apply to such instruments to the extent that item
718(3) does not apply.
Item 718(4) is intended to facilitate the smooth running of court and tribunal
proceedings by substituting the Commonwealth as the appropriate party in any
proceedings on foot at the commencement time in which HIC or HeSA is a party if the
proceedings relate to the assets or liabilities of HIC or HeSA.
Item 719 - Recording Commonwealth ownership of assets and liabilities
Item 719(1) is a standard provision that facilitates the registration of the transfer of
assets and liabilities made by item 718 under any law of the Commonwealth, a State or
a Territory that provides for the registration or recording of interests. For example, if
an interest in real property located in a State was transferred to the Commonwealth
40
under item 718, the mechanism in item 719 would facilitate the recording of this
transfer in the relevant State's land titles register.
Item 720 - Appropriations
Item 720(1) provides that, after the commencement time, references to HIC in laws
appropriating money out of the Consolidated Revenue Fund are to be read as
references to Medicare Australia. This is necessary as this Bill replaces HIC with
Medicare Australia. Medicare Australia will be a prescribed Agency for the purposes
of the Financial Management and Accountability Act 1997.
Item 720(2) allows for the Minister to determine that a particular reference to HIC
covered by item 720(1) will be read as a reference to the CEO. This recognises that is
some unusual instances it may be more appropriate for a reference to HIC in a law
appropriating moneys to be read as a reference to the CEO. Other provisions of this
Bill vest the statutory functions of HIC in the CEO. Item 720(3) confirms that this
type of Ministerial instrument is not a legislative instrument. This is merely stating
what the position would be in any event under the Legislative Instruments Act 2003.
Item 720(4) is intended to deal with the position where, at the commencement time,
HIC may have drawn against appropriations but not expended all funds so drawn. The
effect of item 718 will be to transfer these drawn but unexpended funds into the
Consolidated Revenue Fund. Medicare Australia will not be able to re-access such
funds without an appropriation. Item 720(4) provides this appropriation.
Item 721 - Transfer of staff
Item 721 deals with the transfer of staff from the HIC to Medicare Australia. At the
commencement time, HIC staff will be enabled under the Public Service Act 1999
(using mechanisms in that Act) and will become staff of Medicare Australia.
This Bill repeals section 32 of the Act, which enables regulations to be made relating
to the long service leave of staff who moved from certain private health funds to HIC
in the 1970s. Item 721(1) is intended to preserve the current long service leave
entitlements of such staff, notwithstanding the repeal of section 32.
Item 721(2) allows regulations to be made to facilitate the smooth transition of staff
from HIC to Medicare Australia, and the smooth transition to coverage under the
Public Service Act 1999.
Item 721(3) gives examples of the matters that regulations made under item 721(2)
may cover. This is not limit intended to limit item 721(2). It is expected that
regulations will cover the procedures to apply when processes such as recruitment,
performance management, redundancy and discipline have commenced but not
concluded by the commencement time, and where an incident occurs before the
commencement time (for example, a breach of a code of conduct by a member of
HIC's staff) but action is only commenced in relation to the incident after the
commencement time.
41
The expression "staffing procedures" is defined in item 721(5) to include a large
number of human resource management procedures and policies. The definition is
intended to be very broad.
Item 721(4) allows the regulations made under item 721 to have effect despite the
Public Service Act 1999. This will mean that such regulations will apply even if they
are inconsistent with a provision of the Public Service Act 1999. This is necessary
because in some cases the regulations will need to provide for the continuation of
certain processes (such as discipline processes) after the commencement time under
HIC procedures, and these HIC procedures may in some respects be inconsistent with
the Public Service Act 1999. Item 721(2) only authorises the making of regulations of
a transitional nature.
Item 722 - Transfer of Records
Item 722 provides that, at the commencement time, the records and documents of HIC
become the records and documents of the CEO. This change is appropriate as other
provisions of this Bill vest what were the statutory functions of HIC in the CEO. It is
appropriate that the CEO has custody of the records and documents relating to the
exercise of his or her functions.
Item 723 - Access by Commissioners to records
This item allows Commissioners, after the commencement time, to continue to have
access to certain records on the same terms as is currently allowed by section 27L(4)
of the Commonwealth Authorities and Companies Act 1997.
Item 724 - Financial statements and other reporting requirements
Item 724(1) in effect requires the CEO, within 3 months after the commencement time,
to provide financial statements for HIC for so much of the reporting period as ends at
the commencement time. It is important that separate financial statements be prepared
for so much of the reporting period as ends at the commencement time as, at the
commencement time, responsibility for HIC's finances will move to the CEO. The
CEO needs to be empowered to sign such financial statements as the offices of
Commissioners (including the Chairperson and Managing Director) will be abolished
by other provisions of this Bill.
Item 724(2) provides for the CEO to provide any reports (other than financial
statements) relating to HIC required under law for a period where the reporting period
ends after the commencement period. Thus, for example, if immediately before the
commencement time a law required HIC to submit an annual report on a particular
matter on 30 June 2006 covering the period 1 July 2005 to 30 June 2006, if the
commencement time is 1 October 2005, item 724(2) requires the CEO to submit a
report for HIC on 30 June 2006 covering the period 1 July 2005 to 30 September
2005.
Item 724(3) provides that, if under item 724(2), the CEO is required to provide a
report for a part of a reporting period and the CEO is also required to provide a similar
42
report for the remainder of the reporting period, the CEO may meet the requirements
in a single report for that reporting period. This means that, in relation to the example
in the previous paragraph, the CEO could chose to provide a single report for the
period 1 July 2005 to 30 June 2006.
Item 724(4) requires the CEO to provide any reports that are required by law but
which HIC, a Commissioner or the Managing Director has not provided by the
commencement time.
Item 725 - Substitution of parties to proceedings
Item 725 is intended to facilitate the smooth running of court and tribunal proceedings
by substituting the CEO as the appropriate party in any proceedings on foot at the
commencement time in which HIC, a Commissioner, the Managing Director or HeSA
is a party. Other provisions of this Bill replace HIC with Medicare Australia, abolish
the offices of Commissioner and Managing Director and vest what were the statutory
functions of HIC in the CEO. While HeSA will continue to exist as a company after
the commencement time, all of its assets and liabilities will be vested in the
Commonwealth (item 718) and its business will be conducted by the CEO.
Item 725(2) provides that item 725 has effect subject to item 718(4). Item 718(4)
provides that the Commonwealth will be substituted as a party for HIC or HeSA in any
proceedings before a court or tribunal immediately before the commencement time
where the proceedings relate to the assets or liabilities of HIC or HeSA transferred to
the Commonwealth at the commencement time under item 718.
Item 726 - Exemption from stamp duty and other Sate or Territory taxes
Item 726 ensures that the operation of the transitional provisions in Part 3, including
the transfer of assets and liabilities effected by item 718, do not result in a liability on
any person to pay State or Territory stamp duty or tax.
Item 727 - Constitutional safety net - acquisition of property
It is not expected that any provisions in this Schedule of the Bill will result in an
acquisition of property within the meaning of that expression in the Constitution.
However, item 727 is the standard Constitutional safety net provision.
Item 728 - Operation of the Administrative Decisions (Judicial Review) Act 1977
Item 80 of this Bill amends the Administrative Decisions (Judicial Review) Act 1977
("the ADJR Act") by omitting reference to the "Health Insurance Commission" in
paragraph (k) of Schedule 2. This reference in Schedule 2 means that certain decisions
of HIC are exempt from the application of section 13 of the ADJR Act (which requires
the giving of reasons for decisions). This item will mean that decisions made by the
HIC that were, before the commencement time, exempt from the operation of section
13 of the ADJR Act will continue to be exempt after the commencement time.
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Item 729 - Operation of the Freedom of Information Act 1982
Items 90 and 91 of this Bill amend the Freedom of Information Act 1982 ("the FOI
Act") by deleting a reference to the "Health Insurance Commission" in Division 1 of
Part II of Schedule 2 of that Act. Currently HIC is exempt from the operation of the
FOI Act in relation to documents in respect of its commercial activities. This item 729
provides that, despite this deletion, HIC's documents in respect of its commercial
activities will continue to be exempt after the commencement time.
Item 730 - Delegation by the Minister
Item 730(1) allows the Minister to delegate his or her powers and functions under Part
3 of Schedule 2 of the Bill to the Secretary of the Department, an SES employee (or
acting SES employee) of the Department of Human Services or the CEO. Item 730(2)
provides that, in exercising powers or functions so delegated, the delegate must
comply with any directions of the Minister.
Item 730(3) provides that a power delegated to the CEO under item 730(1) must not
be sub-delegated by the CEO to an employee of Medicare Australia. Item 730(3) is
necessary because otherwise the new section 8AC(3) of the Act (to be inserted by this
Bill) would allow for such sub-delegation to occur.
Item 731 - Regulations
Item 731(1) permits the Governor-General to make regulations prescribing matters
required or permitted by Schedule 2 of this Bill or necessary or convenient to be
prescribed for carrying out or giving effect to the Schedule. Item 731(2) clarifies that,
in particular, regulations may be made prescribing matters of a transitional nature
(including prescribing any saving or application provisions) relating to the amendments
or repeals made by Schedule 2.
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