Details of the Financial Framework (Supplementary Powers) Amendment (Communications and the Arts Measures No. 1) Regulations 2017

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Communications and the Arts Measures No. 1) Regulations 2017.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation. 

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedules to the Regulations.

 

Schedule 1 - Amendments

 

Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)

 

This item adds three new table items to Part 4 of Schedule 1AB to establish legislative authority for government spending on certain activities administered by the Department of Communications and the Arts.

 

New table item 210 establishes legislative authority for government spending on a loan to NBN Co Limited (NBN Co). 

 

The Government has capped the amount of equity contributions to NBN Co at $29.5 billion which is expected to be fully utilised in 2017.  NBN Co will require an additional $19.5 billion to complete the rollout of the National Broadband Network, which the Government has decided to provide through a loan on commercial terms from 2017-18, with the full amount of the loan to be repaid by 30 June 2021.  The loan will ensure that NBN Co has certainty that the full cost of funding the rollout is secured on commercial terms and will enable the company to focus on completing the rollout.

 

Funding of up to $19.5 billion commencing in 2017-18 was included in the 2016-17 Mid-Year Economic and Fiscal Outlook under the measure 'NBN Co Limited - loan'.  Details are set out in the Mid-Year Economic and Fiscal Outlook 2016-17, Appendix A: Policy decisions taken since the 2016 PEFO at page 103.

 

The loan to NBN Co was announced on 18 November 2016 by the Minister for Finance, Senator the Hon Mathias Cormann, and the Minister for Communications, Senator the Hon Mitch Fifield.

 

A delegate of the Minister for Communications within the Department of Communications and the Arts will make decisions about the loan expenditure based on the executed loan agreement between NBN Co and the Commonwealth.

 

Decisions made in connection with the loan will not be subject to independent review, as the expenditure is non-recurrent, targeted, and time-limited.

 

Funding for this item will come from Program 1.1: Digital Technologies and Communications, which is part of Outcome 1.  Details are set out in the Portfolio Additional Estimates Statements 2016-17, Communications and the Arts Portfolio at page 16.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the communications power (section 51(v)) of the Constitution.

 

This program involves providing a government loan on commercial terms to NBN Co to complete the rollout of the National Broadband Network.

 

New table item 211 establishes legislative authority for further government spending through the Mobile Black Spot Program (the Program).

 

The Government has committed $220 million through the Program to invest in telecommunications infrastructure to improve mobile phone coverage and competition.

 

The Government's commitment of $160 million towards rounds 1 and 2 of the Program is delivering 765 mobile base stations across regional and remote Australia by Telstra, Optus and Vodafone between 2015 and 2018.

 

In May 2016, the Prime Minister, the Hon Malcolm Turnbull MP, and the Minister for Regional Communications, Senator the Hon Fiona Nash, announced an additional $60 million for the Program to target specific locations.  The announcement was part of the election commitment 'The Coalition's Policy to Tackle Mobile Phone Black Spots' which is available at https://www.liberal.org.au/coalitions-policy-tackle-mobile-phone-black-spots. 

 

Rounds 1 and 2 were confined to mobile black spots in regional and remote Australia, whereas black spots being targeted by the $60 million election commitment are located in all parts of Australia, including metropolitan areas.

 

Funding of $60 million was included in the 2016-17 Mid-Year Economic and Fiscal Outlook under the measure 'Mobile Black Spot Programme - round three' for a period of three years commencing in 2017-18.  Details are set out in the Mid-Year Economic and Fiscal Outlook 2016-17, Appendix A: Policy decisions taken since the 2016 PEFO at pages 139 to 140.

 

A competitive process to allocate funding is expected to commence in mid-2017, with the rollout of infrastructure expected to commence in late 2017.  The program guidelines, which will be published at www.communications.gov.au, will invite mobile network operators to apply for funding to deliver improved mobile coverage to the priority locations.

 

The Minister for Regional Communications will make funding decisions for the Program.  Funding decisions will be based on consideration of funding recommendations provided by the Department of Communications and the Arts, following a competitive assessment of the funding applications received.  The assessment will be undertaken by the Department in accordance with the selection criteria outlined in the program guidelines.

 

Funding decisions will be made in accordance with applicable legislative requirements under the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines.  Funding decisions will be published on the Department of Communications and the Arts' website at www.communications.gov.au.   

 

The Program is not considered suitable for independent merits review as it involves the allocation of finite resources through funding rounds.  As each funding round has a capped amount, only a proportion of proposed mobile base stations may receive funding.  The re-making of a decision under merits review would necessarily affect funding made available to other parties.  An application for merits review would delay the deployment of funded base stations, which would affect the timely provision of improved mobile coverage at the identified priority locations. 

 

The guaranteed right of review under section 75(v) of the Australian Constitution, and review under section 39B of the Judiciary Act 1903, would be available.  Parties affected by the decisions would also have recourse to the Commonwealth Ombudsman, where appropriate.

 

Funding for this item will come from Program 1.1: Digital Technologies and Communications, which is part of Outcome 1.  Details are set out in the Portfolio Additional Estimates Statements 2016-17, Communications and the Arts Portfolio at pages 16 and 17.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the communications power (section 51(v)) of the Constitution.

 

Under the Program, funding will be provided to deliver telecommunications infrastructure to improve mobile telephone voice and data coverage to identified mobile black spot locations.

 

New table item 212 establishes legislative authority for the Government to provide a grant to the Sunshine Coast Regional Council (the Council) to undertake a feasibility study into a potential international submarine telecommunications cable to the Sunshine Coast.

 

The feasibility study would assess the costs and benefits of such a cable and examine how to leverage private sector investment to unlock the economic value of such a cable.  In relation to unlocking economic value, it is envisaged the study would examine how investment in downstream activities that could make use of such a cable could be realised, as well as examining investment in such a cable itself.

 

The Council will conduct an open tender process to find a suitable person to conduct the feasibility study.  It is envisaged that the study will take three to four months to complete.

 

Funding of $0.3 million was included in the 2016-17 Mid-Year Economic and Fiscal Outlook under the measure 'Community Infrastructure Projects - new announcements'.  Details are set out in the Mid-Year Economic and Fiscal Outlook 2016-17, Appendix A: Policy decisions taken since the 2016 PEFO at page 181.

 

Funding for the feasibility study was announced on 23 June 2016 as an election commitment by the Minister for Immigration and Border Protection, the Hon Peter Dutton MP, the Member for Fairfax, Mr Ted O'Brien MP, and the Member for Fisher, Mr Andrew Wallace MP.

 

A non-competitive, one-off grant will be provided to the Council.  The grant will be provided through a funding deed between the Department of Communications and the Arts and the Council.  The Department will administer and monitor the grant in line with the funding deed and the grant guidelines.  The Minister for Communications will be the decision-maker for the grant expenditure.

 

Details of the grant will be published on the Department of Communications and the Arts' website at www.communications.gov.au. 

 

The grant will not be subject to merits review as it is non-competitive, targeted and one-off in nature.

 

Funding for this item will come from Program 1.1: Digital Technologies and Communications, which is part of Outcome 1.  Details are set out in the Portfolio Additional Estimates Statements 2016-17, Communications and the Arts Portfolio at page 22.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         the communications power (section 51(v)); and

*         the external affairs power (section 51(xxix)).

 

With respect to the communications power, a new international submarine telecommunications cable would provide communications services, including internet and other telecommunications services, to Australian homes and business.

 

With respect to the external affairs power, an international submarine telecommunications cable would involve construction of telecommunications infrastructure outside of Australia to connect to infrastructure inside Australia.

 

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (Communications and the Arts Measures No. 1) Regulations 2017

 

These Regulations are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations.  Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs.  The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013. 

 

The Regulations amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for government spending on a number of initiatives in the Communications and the Arts portfolio that arise from 2016 election commitments and decisions in the 2016-17 Mid-Year Economic and Fiscal Outlook which was released on 19 December 2016.  The initiatives will be administered by the Department of Communications and the Arts.

 

Funding will be provided for:

*         a loan to NBN Co Limited to complete the rollout of the National Broadband Network;

*         further funding through the Mobile Black Spot Program to invest in telecommunications infrastructure to improve mobile phone coverage and competition at identified mobile black spot locations; and

*         the Sunshine Coast Regional Council to undertake a feasibility study into a potential submarine telecommunications cable.

 

The Minister for Communications has portfolio responsibility for these matters.

 

Human rights implications

 

The Regulations do not engage any of the applicable rights or freedoms.

 

 

Conclusion

 

These Regulations are compatible with human rights as they do not raise any human rights issues.

 

 

 

Senator the Hon Mathias Cormann

Minister for Finance