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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
MEDICAL RESEARCH FUTURE FUND
(CONSEQUENTIAL AMENDMENTS) BILL 2015
REVISED EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Finance,
Senator the Hon Mathias Cormann)
THIS MEMORANDUM TAKES ACCOUNT OF AMENDMENTS
MADE BY THE HOUSE OF REPRESENTATIVES TO THE BILL AS
INTRODUCED
Table of abbreviations and common terms
Abbreviation or Description
common term
Agency means the Future Fund Management Agency established by
section 74 of the Future Fund Act 2006
BAF means the Building Australia Fund established by
section 12 of the Nation-building Funds Act 2008
BAF Special Account means the Building Australia Fund Special Account established
by section 13 of the Nation-building Funds Act 2008
COAG Reform Fund means the Fund established by section 5(1) of the COAG Reform
Fund Act 2008
CRF means the Consolidated Revenue Fund
DCAF means the DisabilityCare Australia Fund established by
section 10 of the DisabilityCare Australia Fund Act 2013
DCAF Act means the DisabilityCare Australia Fund Act 2013
DCAF Special Account means the DisabilityCare Australia Fund Special Account
established by section 11 of the DisabilityCare Australia Fund
Act 2013
EIF means the Education Investment Fund established by
section 131 of the Nation-building Funds Act 2008
EIF Special Account means the Education Investment Fund Special Account
established by section 132 of the Nation-building
Funds Act 2008
Finance Minister has the same meaning as defined in the Public Governance,
Performance and Accountability Act 2013
Future Fund means the Future Fund established by section 11 of the Future
Fund Act 2006
Future Fund Act means the Future Fund Act 2006
Future Fund Special Account means the Future Fund Special Account established by
section 12 of the Future Fund Act 2006
Health Minister means the Minister who administers the Health Insurance Act
1973
HHF means the Health and Hospitals Fund established by
section 214 of the Nation-building Funds Act 2008
HHF Special Account means the Health and Hospitals Fund Special Account established
by section 215 of the Nation-building Funds Act 2008
Health Insurance Act means the Health Insurance Act 1973
ITAA means the Income Tax Assessment Act 1997
Legislative Instruments Act means the Legislative Instruments Act 2003
MRFF means the Medical Research Future Fund
MRFF Act means the Medical Research Future Fund Act 2015
MRFF Special Account means the Medical Research Future Fund Special Account
established by section 14 of the Medical Research Future Fund
Bill 2015
MRFF
2
Abbreviation or Description
common term
MRFF Health Special Account means the Medical Research Future Fund Health Special Account
established by section 23 of the Medical Research Future Fund
Bill 2015
Nation-building Funds means the Nation-building Funds established by sections 12, 131
and 214 of the Nation-building Funds Act 2008
Nation-building Funds Act means the Nation-building Funds Act 2008
PGPA Act means the Public Governance, Performance and Accountability
Act 2013
Responsible Ministers means the following:
(a) the Treasurer; and
(b) the Finance Minister
The Board means the Future Fund Board of Guardians established by
section 34 of the Future Fund Act 2006
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Outline
The Medical Research Future Fund (Consequential Amendments) Bill 2015 (the Bill)
makes a number of consequential amendments to other pieces of legislation required
to enable the effective operation of the Medical Research Future Fund at
commencement.
The MRFF Bill establishes the Medical Research Future Fund as a dedicated financial
asset and an endowment that supports medical research and innovation (including in
health disciplines). The Medical Research Future Fund will be established as the
MRFF Special Account and the investments of the Medical Research Future Fund
(made and managed by the Future Fund Board).
The consequential amendments made in the Bill support the establishment of the Medical
Research Future Fund in that they:
enable grants to the States and Territories through the COAG Reform Fund; and
extend the Future Fund Board's duties to manage the Medical Research Future
Fund; and
allow for amounts to be transferred between the Medical Research Future
Fund and the Future Fund to allow for proper apportioning of common
expenses incurred by the Future Fund Board in managing the Medical
Research Future Fund, the Future Fund, the Nation-building Funds and the
DCAF.
The Bill amends the COAG Reform Fund Act 2008, the Future Fund Act 2006,
sections of the Nation-building Funds Act 2008, the DisabilityCare Australia
Fund Act 2013, and the Health Insurance Act 1973.
The Bill also abolishes the Health and Hospitals Fund by repealing relevant sections of
the Nation-building Funds Act 2008. The closure of the Health and Hospitals Fund is a
consequence of the decision to establish the Medical Research Future Fund with an
initial balance equal to the balance of the Health and Hospitals Fund not already
committed.
The Bill amends the Health Insurance Act 1973 to create a special appropriation to
allow the Department of Health to meet ongoing financial commitments arising from
Health and Hospitals Fund projects already committed before the closure of the
Health and Hospitals Fund.
Providing for a separate Bill for the consequential amendments conforms to the
Commonwealth practice to reduce the complexity of principal Acts.
4
Financial Impact Statement
The Bill has no financial impact.
Statement of Compatibility with Human Rights
The proposed amendments do not engage any of the applicable rights or freedoms
outlined in the Human Rights (Parliamentary Scrutiny) Act 2011, such as encompassed
in the International Covenant on Civil and Political Rights.
The proposed amendments do not limit any human rights, nor propose any offences or
penalties.
This Bill is therefore compatible with the human rights and freedoms recognised or
declared in the international instruments listed in subsection 3(1) of the Human Rights
(Parliamentary Scrutiny) Act 2011.
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Medical Research Future Fund
(Consequential Amendments) Bill 2015
NOTES ON SECTIONS
Section 1 - Short Title
Section 1 provides for the Act to be cited as the Medical Research Future Fund
(Consequential Amendments) Act 2015.
Note: The sections in the Bill will become sections of the Act on Royal Assent.
Section 2 - Commencement
Section 2 is the commencement provision for the Bill. The commencement dates for the
specific provisions are provided in the table in subsection 2(1).
Item 1 of the table provides that sections 1 to 3 and anything not covered in the table
commence on the day the Act receives Royal Assent.
Item 2 of the table provides that Schedule 1 will commence immediately after the
commencement of the Medical Research Future Fund Act 2015.
Item 3 of the table provides that Schedule 2 will commence on a day fixed by
Proclamation or six months after Schedule 1 to this Act commences, whichever comes
first.
Item 4 of the table provides that Schedule 3 will commence on the later of the
commencement of the Medical Research Future Fund Act 2015 or the commencement
of the Acts and Instruments (Framework Reform) Act 2015.
Section 3 - Schedules
Section 3 provides that each Act specified in a Schedule to this Act is amended or repealed as
set out in the Schedule concerned.
Schedule 1 - Main Amendments
COAG Reform Fund Act 2008
Item 1 inserts Note 2AA after Note 2A to subsection 5(2) to reflect that an amount
originating in the MRFF may be transferred to the COAG Reform Fund to mirror Note 2 and
Note 2A that refer to the ability to transfer amounts originating in the BAF, EIF, HHF and
DCAF to the COAG Reform Fund.
Item 2 inserts a new paragraph 7(1)(baa) after paragraph 7(1)(ba) to recognise that grants from
the MRFF to States and Territories are channelled through the COAG Reform Fund. The
MRFF Bill requires that payments to States and Territories through the COAG Reform Fund
are bound by the terms and conditions of a written agreement.
Item 3 inserts Note 1AA after Note 1A to subsection 7(3) to reflect that the channelling of
grants to States and Territories from the MRFF through the COAG Reform Fund is subject to
the provisions of the MRFF Act.
6
DisabilityCare Australia Fund Act 2013
Item 4 repeals subparagraphs 16(a)(iii) to (vi) and replaces them with new
subparagraphs 16(a)(iii) and (iv) to provide that expenses incurred by the Future Fund Board
in establishing and operating bank accounts related to the DCAF can be met from the DCAF
Special Account to the extent that such expenses do not relate to any other fund including the
MRFF.
Item 5 repeals subparagraphs 16(b)(iii) to (vi) and replaces them with new
subparagraphs 16(b)(iii) and (iv) to provide that the cost of insurance incurred by the Future
Fund Board in relation to the DCAF can be met from the DCAF Special Account to the extent
that such insurance premiums do not relate to any other fund including the MRFF.
Item 6 repeals subparagraphs 16(c)(iii) to (vi) and replaces them with new
subparagraphs 16(c)(iii) and (iv) to provide that expenses incurred by the Future Fund Board
in relation to managing the DCAF can be met from the DCAF Special Account to the extent
that such expenses do not relate to any other fund including the MRFF.
Future Fund Act 2006
Item 7 inserts a reference within the note to section 4 to confirm that the Future Fund Board
has additional functions under the MRFF Act.
Item 8 inserts a definition of 'Medical Research Future Fund' in section 5 by reference to
section 11 of the MRFF Act.
Item 9 inserts a definition of 'MRFF Special Account' in section 5 by reference to section 14
of the MRFF Act.
Item 10 amends Note 2A to section 13 to insert a reference to the MRFF.
Items 11 and 12 insert new subparagraphs 28(5)(bb) and 28(5)(h) which will allow
investment managers engaged in connection with the management of the MRFF to also be
engaged for the purposes of managing the Future Fund, DCAF, BAF, EIF or HHF.
Item 13 inserts a reference to the MRFF Act in the note at section 33. The note alerts the reader
to the fact that the Future Fund Board has additional functions under other Acts which will now
include the MRFF Act.
Item 14 adds a new paragraph 35(b)(iv) which will extend the functions of the Future Fund
Board to its functions specified under the MRFF Act.
Item 15 adds a new paragraph 55(3)(c) to provide that the Future Fund Board's reporting
obligation in relation to the Future Fund do not include its separate reporting obligation to the
responsible Ministers under the MRFF Act.
Item 16 inserts a new paragraph 63(1)(d) and item 17 inserts a new paragraph 63(2)(ac).
These changes will ensure that that the Chair or a member of the Future Fund Board does not
breach civil and criminal obligations under the Future Fund Act by performing an act that they
are required to perform under the MRFF Act.
7
Item 18 inserts a new heading and new subsection 81(1E) and item 19 inserts a new
subsection 81(2E). These changes will require that the annual report prepared by the Chair
of the Future Fund Board include a report on the performance of investments of the MRFF
and the amounts debited from the MRFF for purposes allowed under the MRFF Act. In
addition, the annual report will also need to include benchmarks in relation to the
performance of the debits from the MRFF. This is consistent with the arrangements in
relation to the other Funds which are the responsibility of the Future Fund Board.
Item 20 inserts new paragraph 83B(1)(db) which will allow the Future Fund Board to delegate
its power to engage investment managers in relation to the MRFF to the Chair of the Future
Fund Board or a SES Employee of the Future Fund Management Agency.
Item 21 inserts new subparagraph 84(1)(b)(iib) and item 22 inserts a new subparagraph
84(1)(b)(viii) to provide that any amount of money received by the Board must be credited
to the Future Fund Special Account if it is not covered by a relevant provision under the
Future Fund, DCAF, Nation-building Funds or MRFF Acts.
Item 23 inserts a new heading and new subsection 84(4B) to allow the nominated Minister
under section 83 to provide a written direction to the Future Fund Board requiring an
amount credited to the Future Fund Special Account under subsection 84(1) to be
subsequently debited from this account and credited to the MRFF Special Account.
Item 24 inserts a reference to new subsection 84(4B) in paragraph 84(5)(b) to provide further
guidance on how amounts transferred to the MRFF under section 84 are to be determined.
Item 25 inserts a reference to new subsection 84(4B) in subsection 84(6) to provide that a
written direction made under new subsection 84(4B) does not have the status of a legislative
instrument. This is consistent with the status of other written directions that can be made by the
nominated Minister under subsections 84(2), 84(3), 84(4) and 84(4A) in relation to the transfer
of amounts to other Special Accounts as provided under those subsections.
Items 26, 27 and 28 amend paragraphs 2(2)(a), 2(2)(b) and 2(2)(c) of Schedule 2 to include a
reference to various provisions of the MRFF Act. These changes will provide that bank
account expenses, insurance premiums and costs relating to the management of the MRFF by
the Future Fund Board are to be considered to be for the purposes of the Future Fund Special
Account.
Item 29 inserts a reference to the MRFF in Clause 1 of Schedule 2A which provides a
simplified outline of Schedule 2A which relates to inter-fund transfers. Schedule 2A will be
amended by item 31 to include a reference to the MRFF.
Item 30 makes a minor amendment to subclauses 2(2) and (3), 3(2) and (3), and 5(2) and (3),
of Schedule 2A to ensure the consistent use of language and reflect contemporary drafting
conventions.
Item 31 adds a new clause 6 to the end of Schedule 2A to allow the nominated Minister under
the Future Fund Act to provide a written direction requiring the reversal of a debit from the
MRFF to meet bank account, insurance premium or other costs relating to the MRFF. This
reversal is to be effected by debiting the Future Fund Special Account and crediting the MRFF
Special Account. The reversal amount cannot exceed the amount originally debited from the
MRFF Special Account. The nominated Minister's written direction is not to be regarded as a
legislative instrument.
8
Nation-building Funds Act 2008
Item 32 amends paragraph 20(a) to include a reference to the MRFF to confirm that
expenses incurred by the Future Fund Board in establishing and operating bank accounts
related to the BAF can be met from the BAF Special Account to the extent that such expenses
do not relate to any other fund including the MRFF.
Item 33 amends paragraph 20(b) to include a reference to the MRFF to confirm that the cost
of insurance incurred by the Future Fund Board in relation to the BAF can be met from the
BAF Special Account to the extent that such insurance does not relate to any other fund
including the MRFF.
Item 34 amends paragraph 20(c) to include a reference to the MRFF to confirm that
expenses incurred by the Future Fund Board in relation to managing the BAF can be met
from the BAF Special Account, to the extent that such expenses do not relate to any other
fund including the MRFF.
Item 35 amends paragraph 138(a) to include a reference to the MRFF to confirm that
expenses incurred by the Future Fund Board in establishing and operating bank accounts
related to the EIF can be met from the EIF Special Account to the extent that such expenses
do not relate to any other fund including the MRFF.
Item 36 amends paragraph 138(b) to include a reference to the MRFF to confirm that the
cost of insurance incurred by the Future Fund Board in relation to the EIF can be met from
the EIF Special Account to the extent that such insurance does not relate to any other fund
including the MRFF.
Item 37 amends paragraph 138(c) to include a reference to the MRFF to confirm that expenses
incurred by the Future Fund Board in relation to managing the EIF can be met from the EIF
Special Account, to the extent that such expenses do not relate to any other fund including the
MRFF.
Item 38 amends paragraph 219(a) to include a reference to the MRFF to confirm that
expenses incurred by the Future Fund Board in establishing and operating bank accounts
related to the HHF can be met from the HHF Special Account to the extent that such
expenses do not relate to any other fund including the MRFF.
Item 39 amends paragraph 219(b) to include a reference to the MRFF to confirm that the
cost of insurance incurred by the Future Fund Board in relation to the HHF can be met from
the HHF Special Account to the extent that such insurance does not relate to any other fund
including the MRFF.
Item 40 amends paragraph 219(c) to include a reference to the MRFF to confirm that
expenses incurred by the Future Fund Board in relation to managing the HHF can be met
from the HHF Special Account, to the extent that such expenses do not relate to any other
fund including the MRFF.
9
Schedule 2 - Amendments relating to the abolition of the Health
and Hospitals Fund
COAG Reform Fund Act 2008
Item 1 removes a reference to the HHF from the note to subsection 5(2), to reflect that credits to
the COAG Reform fund can no longer be made by debiting the HHF Special Account.
Item 2 amends subparagraph 7(1)(b)(v) as a result of item 3. Item 3 will repeal subparagraph
7(1)(b)(vi) to remove references to requirements for grants from the COAG Reform Fund to be
covered by terms and condition relating to the HHF if the grants are being made using funds
debited from the HHF Special Account.
Item 4 amends the Note 1 to subsection 7(3) to removes reference to the HHF.
DisabilityCare Australia Fund Act 2013
Items 5, 6 and 7 amend subparagraphs 16(a)(iii), 16(b)(iii) and 16(c)(iii) to remove references
to the HHF. These subparagraphs prescribe certain expenses in relation to the HHF that can be
met from the DCAF Special Account. These provisions will no longer be necessary following
the abolition of the HHF.
Future Fund Act 2006
Item 8 repeals the definitions of the Health and Hospitals Fund and the HHF Special Account
in section 5 as a consequence of subsequent provisions of the Bill that abolish the HHF through
repealing relevant provisions of the Nation-building Funds Act.
Item 9 removes a reference to the HHF from Note 2A to section 13 as a consequence of item 18
that will amend Schedule 2A to remove references to the HHF from that Schedule. Note 2A
currently reminds the reader that Schedule 2A of the Future Fund Act includes provisions to
allow for transfers from the Future Fund to the HHF which will no longer be necessary.
Item 10 repeals paragraph 28(5)(f) as following abolition of the HHF it will no longer be
necessary to allow for investment managers employed in relation to Future Fund assets to also
be employed for the purposes of managing HHF assets.
Item 11 repeals subsections 81(1C) and (2C) to no longer require the annual report prepared by
the Chair of the Future Fund Board to include information in relation to the HHF.
Item 12 repeals paragraph 83B(1)(d) as it will no longer be necessary to allow for the Future
Fund Board to delegate powers in relation to the HHF Fund to the Chair, SES employee or
acting SES employee of the Agency.
Item 13 repeals subparagraph 84(1)(b)(vi) which is a reference to the HHF Special Account
which is being abolished.
Item 14 repeals subsection 84(4) which relates to the transfer of amounts from the Future Fund
to the HHF Special Account.
Items 15 and 16 amend paragraph 84(5)(b) and subsection 84(6) to remove references to
subsection 84(4).
10
Item 17 repeals subparagraphs 2(2)(a)(v), (b)(v) and (c)(v) of Schedule 2. This will remove
references to certain expenses of the HHF which can be a purpose of the Future Fund Special
Account.
Item 18 removes a reference to the HHF in clause 1 of Schedule 2A. Clause 1 provides a
simplified outline to Schedule 2A.
Item 19 repeals clause 4 of Schedule 2A as it is no longer necessary to allow for transfers from
the Future Fund to the HHF.
Health Insurance Act 1973
Item 20 inserts a new Part IVAA and new sections 46AA, 46AB and 46AC to the Health
Insurance Act in relation to payments relating to the former HHF. New Part IVAA will allow
the remaining HHF commitments to be met from the 'general' CRF, as a result of the transfer of
the balance of the HHF Special Account (not transferred to the MRFF) to the 'general' CRF
following abolition of the HHF. New section 46AA will allow the Health Minister to authorise
(by written direction) payments to meet commitments made prior to the abolition of the HHF.
The direction can only be made if the payments relate to the creation or development of health
infrastructure that met the requirements specified for approval of projects prior to the abolition
of the HHF, namely:
a recommendation by the HHF Advisory Board that projects satisfied the HHF
evaluation criteria;
the Health Minister had previously recommended payments in relation to the
projects; and
the recipients of payments are not a State or Territory--noting that remaining
Health and Hospitals Fund payments to the States and Territories will be made
under the Federal Financial Relations Act 2009.
The Health Minister's written direction(s) authorising payments following the abolition of the
HHF will not be a legislative instrument and will not be subject to requirements under the
Legislative Instruments Act. This is in line with the written determinations authorising payments
under the Nation-building Funds Act prior to the abolition of the HHF.
Under new section 46AB health infrastructure payments following the abolition of the HHF are
to be bound by the terms and conditions of a written agreement between recipients and the
Commonwealth.
New section 46AC establishes an appropriation for the purpose of amounts payable under new
section 46AA.
New section 46AD details the Constitutional basis upon which payments made in relation to
ongoing HHF projects rely.
Medical Research Future Fund 2015
Items 21, 22 and 23 amend subparagraphs 17(a)(iii), 17(b)(iii) and 17(c)(iii) to remove
references to the HHF from the definition of the purposes of the Future Fund Special Account
for which debits from this account are permissible.
11
Nation-Building Funds Act 2008
Item 24 removes a reference to the HHF from the Title of the Act.
Item 25 removes a reference to the HHF from section 3 of the Act which sets out a simplified
outline of the Act.
Item 26 repeals a number of definitions in section 4 related to the HHF.
Item 27 amends the definition of person in section 4.
Item 28 makes a consequential amendment to paragraph (b) of the definition of value in
section 4 as a consequences of item 29.
Item 29 repeals paragraph (c) which refers to the HHF in the definition of value of an
investment.
Item 30 repeals subparagraphs 20(a)(iv), (b)(iv) and (c)(iv). This will remove references to
the HHF in the definition of the purposes of the BAF Special Account for which debits from
this account are permissible.
Item 31 repeals section 29 as it will no longer be necessary to provide for transfers from the
BAF to HHF.
Items 32 and 33 amend subsections 122(1) and (3) as a consequence of the repeal of
section 29 by item 31. It will no longer be necessary to include references to transfers
between the BAF and HHF in the description of powers in relation to the BAF that can be
delegated by the Finance Minister.
Item 34 repeals subparagraphs 138(a)(iv), (b)(iv) and (c)(iv) which will remove references to
the HHF in the definitions of the purposes of the EIF Special Account for which debits from
this account are permissible.
Item 35 repeals section 148 which provides for transfers from the EIF to the HHF.
Items 36 and 37 make consequential changes to subsections 207(1) and 207(3) as a result of
item 35 repealing section 148. It will no longer be necessary to include a reference to
transfers between the EIF and HHF in the description of powers in relation to the EIF that can
be delegated by the Finance Minister.
Item 38 repeals Chapter 4. This will abolish the HHF by repealing the all provisions of the
Act relating to the establishment and management of the HHF.
Item 39 is a transitional provision that ensures that agreements relating to payments from the
HHF in force under section 261 of the Act immediately before the repeal of that section are
taken immediately after repeal to be agreements for the purposes of new section 46AB of the
Health Insurance Act as inserted by item 20 of Schedule 2.
12
Schedule 3 - Amendments contingent on the Acts and
Instruments (Framework Reform) Act 2015
Medical Research Future Fund Act 2005
Items 1, 1A, 2 and 3 change any reference to Legislative Instruments Act 2003 to Legislation
Act 2003 should the Acts and Instruments (Framework Reform) Bill 2015 pass Parliament.
13
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