Details of the Financial Framework (Supplementary Powers) Amendment  

(Health Measures No. 5) Regulations 2020

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Health Measures No. 5) Regulations 2020.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after the instrument is registered 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 Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Financial Framework (Supplementary Powers) Regulations 1997

 

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

 

This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending on an activity administered by the Department of Health (the department).

 

New table item 444 establishes legislative authority for government spending on the Support for Australia's Thalidomide Survivors package of measures (the support package).

 

The objective of the support package is to address a number of recommendations of the Senate Community Affairs References Committee inquiry into Support for Australia's Thalidomide Survivors (the Inquiry). The terms of reference for the Inquiry had particular reference to:

*         adequacy of compensation and support;

*         responsibility for providing support;

*         provision of financial compensation;

*         the role of the Australian Government in compensation and support; and

*         any related matters.

 

The Committee handed down its Final Report on 22 March 2019, which is available at https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/ThalidomideSurvivors/Report.

 

Thalidomide was predominantly sold over the counter in Australia, between 1 August 1960 and 29 November 1961, as a tranquilliser and pain killer that was effective for treating insomnia and headaches as well as nausea and morning sickness during pregnancy. It caused babies to be born with a range of disabilities such as malformed limbs, facial features and internal organs. Thalidomide was developed and manufactured by a German pharmaceutical company Chemie Grünenthal, now Grünenthal GmbH (Grünenthal). Grünenthal licensed thalidomide for sale globally, including to the distributor of the drug in Australia, the Distillers Company (Distillers), which was purchased in 1997 by Diageo.

 

There are two groups of recognised thalidomide survivors in Australia: the group recognised as part of the 2010 ex gratia scheme and the group recognised through the class action that concluded in 2014.

 

As set out in the Final Report of the Inquiry, Distillers reached a compensation settlement in the 1970s with a group of Australian and New Zealand thalidomide survivors. In 2009, Diageo agreed to make a further ex gratia payment to the survivors. All of the thalidomide survivors who were recognised in the 1970s were assessed in early 2010 before the ex gratia payments commenced.

 

A further group of Australian and New Zealand thalidomide survivors was recognised through a class action which was brought against Diageo through the Victorian Supreme Court. It was settled in 2014 and recognised survivors who had not previously been compensated.

 

All recognised Australian thalidomide survivors will be eligible for support under the support package. In addition, currently unrecognised survivors who meet requirements through an eligibility assessment process will also be entitled to receive support.

 

The measures which will be funded under the support package include:

*         a scaled lump sum payment (exempt from tax and the income test);

*         an Extraordinary Assistance Fund (EAF);

*         a Health Care Assistance Fund (HCAF);

*         scaled annual payments (exempt from tax and the income test);

*         third party organisations to administer payments and to establish a national disability support service; and

*         a national site of recognition.

 

Lump sum payment

 

This measure relates to recommendations 2 and 3 of the Final Report of the Inquiry.

 

A one-off lump sum payment ranging from $75,000 to $500,000 (exempt from tax and the income test), scaled according to level of disability, will be paid to each recognised survivor in 2020-21 to acknowledge the pain and suffering experienced by survivors throughout their lives. Payments will be administered by a third party service provider funded by the department.

 

EAF

 

This measure relates to recommendation 7 of the Final Report of the Inquiry.

 

An EAF will be established, to be administered by Services Australia, to support activities of daily living which are adversely affected due to the nature of an individual survivor's thalidomide related disabilities or impaired functional capacity. This may include home and vehicle modifications, as well as assistance with personal and household tasks. Survivors will be required to submit an application, supported by a registered health care professional, for reimbursement of services.

 

HCAF

 

This measure relates to recommendation 8 of the Final Report of the Inquiry.

 

A HCAF will be established, to be administered by Services Australia, to provide reimbursement of out-of-pocket health care expenses required as a direct consequence of the survivor's thalidomide related injuries. Survivors will be required to submit an application, supported by a registered health care professional, for reimbursement of out-of-pocket health care expenses.

 

Annual payments

 

This measure relates to recommendation 4 of the Final Report of the Inquiry

 

An annual payment mechanism will be established, with payments exempt from tax and the income test, and scaled according to level of disability. Annual payments will commence in 2021-22. Payments will be made by a third party service provider funded by the department.

 

Administration and national disability support service

 

This measure relates to recommendation 5 of the Final Report of the Inquiry.

 

Funding will be provided for the administration of payments, and for a national disability support service to assist survivors to identify and gain access to specific thalidomide supports and services. This element will include the making of lump sum and annual payments, the establishment of a website detailing available funding and supports for thalidomide survivors and other related activities. Having an external body administer payments and services to thalidomide survivors will enable the separation of administration from policy making within government.

 

National site of recognition

 

This measure relates to recommendation 1 of the Final Report of the Inquiry.

 

Funding will be provided to establish a site of national recognition for thalidomide survivors and their families in the form of a public memorial. The site of recognition will be located within the Parliamentary Triangle (outside of Parliament House) in Canberra. The National Capital Authority will work with thalidomide survivors to determine the appropriate form and site for the artwork.

 

Payments to thalidomide survivors under the support package are grants, which may be provided using a demand driven selection process, in accordance with the Commonwealth resource management framework including the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines 2017. Grant opportunity guidelines, setting out eligibility and access requirements, will be developed and published on GrantConnect at www.grants.gov.au. Details relating to recipients of thalidomide payments, including amount of funding received, will not be made publicly available due to privacy considerations.

 

Decisions in relation to eligibility for support under the package as a 'recognised Australian thalidomide survivor', including successful applications under either the EAF or the HCAF, will be made by a delegate of the Secretary of the department.

 

No decision has currently been made on the third party service provider to provide the administration services or to deliver the national disability support service. The decision maker regarding the selection of the third party service provider will also be a delegate of the Secretary of the department. The service provider/s may be engaged through a closed, non-competitive grant process conducted by the department, in accordance with the Commonwealth Grants Rules and Guidelines 2017.   

 

Decisions made in connection with payments to thalidomide survivors are not considered suitable for independent review, as these decisions may be described as automatic or mandatory. The automatic or mandatory nature of such decisions arises as a direct consequence of the level of disability established through the previous settlements of 2010 and 2014 with Diageo. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraph 3.8 of the guide, What decisions should be subject to merit review?).

 

Decisions in relation to new applicants seeking to be recognised as a thalidomide survivor and decisions on the thalidomide survivor's level of disability may be subject to a merits review process. If an applicant is not satisfied that their application for eligibility was assessed correctly, or is not satisfied with the assessment of their level of disability, they will be able to seek an internal review by the Secretary of the department. The Secretary will take advice from the Chief Medical Officer, taking into account the facts, law and aspects of the original decision, and determine whether the decision settled upon was the most appropriate that could have been made on the basis of relevant facts and information available.

 

Decisions made in connection with the selection of service providers (for the delivery of the EAF and HCAF payments, the administration of payments, the national disability support service, and the establishment of the site of national recognition) are not considered suitable for independent review, as these relate to provision of one-off funding to certain service providers over other service providers (see paragraphs 4.11 to 4.19 of the Administrative Review Council's guide, What decisions should be subject to merit review?). In addition, since the site of national recognition will be located in the Parliamentary Triangle in Canberra, its establishment will require the involvement of the National Capital Authority, as the decision making body for the land on which the site will be located.

 

Thalidomide survivors have contributed to the development of the support package through Thalidomide Group Australia and also through the Inquiry. Thalidomide survivors are supportive of a government financial support package.

 

Thalidomide Group Australia has made a request to government for financial support. The request, as outlined in its submission to the Inquiry, is as follows:

*         a one-time upfront payment of up to $500,000 (scaled) to each thalidomide survivor;

*         an annual payment of $2,190,260 (exempt from tax and the social security income tests) paid to the Thalidomide Australia Fixed Trust, which will distribute to the beneficiaries as per current support programs;

*         a Gold Card (similar to the Department of Veterans' Affairs health card) to assist with health care needs;

*         an EAF of $500,000 to allow survivors to adapt their homes, environment, and vehicles;

*         a formal apology to Australian survivors and their parents;

*         a plaque in recognition of Australia's thalidomide survivors and their parents to be mounted in a place of significance.

 

The complex and varied range of health issues and impairments associated with the maternal use of thalidomide has resulted in the need to provide a diverse range of health and disability supports for survivors. With this in mind, the department has consulted broadly with other relevant government agencies regarding the development and implementation of the thalidomide package, including the Department of the Prime Minister and Cabinet, the Department of Finance, and the Department of the Treasury, as well as the Attorney-General's Department, Services Australia, the Department of Social Services, and the National Disability Insurance Agency.

 

Funding for the support package of $44.9 million over four years from 2020-21 will be included in the 2020-21 Budget and the 2020-21 Portfolio Budget Statements for the Health Portfolio and the Social Services Portfolio. Funding for the department will come from Program 2.4: Preventive Health and Chronic Disease Support, which is part of Outcome 2. Funding for Services Australia, which is included in total funding, will come from Program 1.2: Services to the Community - Health, which is part of Outcome 1. Funding for the support package will be ongoing.

 

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));

*         the pharmaceutical benefits, sickness benefits and medical services power, including incidental aspects (section 51(xxiiiA));

*         the external affairs power (section 51(xxix)); and

*         the territories power (section 122).

 

Communications power

 

Section 51(v) of the Constitution empowers the Parliament to make laws with respect to 'postal, telegraphic, telephonic and other like services'.

 

Funding will be provided for a range of activities including disseminating information online for thalidomide survivors relating to the availability of, and access to, health and disability services and programs. 

 

Social welfare power

 

The social welfare power in section 51(xxiiiA) of the Constitution empowers the Parliament to make laws with respect to the provision of certain social welfare benefits including the pharmaceutical benefits, sickness benefits and medical services.

 

Funding will be provided for a one-off lump sum payment to support the health needs of survivors which may support the provision of medical services by medical practitioners or allied health professionals. Funding will be provided for the establishment of the EAF to assist sick survivors with activities of daily living, including adapting their homes, environment and vehicles. Funding will also be directed at improving the quality and effectiveness of Commonwealth-funded 'medical services' by ensuring that persons access the kinds of service required in their particular medical circumstances.

 

External affairs power

 

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affair power supports legislation implementing Australia's obligations under international treaties to which it is a party.

 

Convention on the Rights of Persons with Disabilities [2008] ATS 12 (CRPD)

 

Article 4 of the CRPD requires States Parties to undertake to ensure and promote the full realisation of all human rights and fundamental freedoms for all persons with disabilities without discrimination of any kind on the basis of disability. Article 25 of the CRPD recognises the right of persons with disabilities to the enjoyment of the 'highest attainable standard of health without discrimination on the basis of disability' and, in particular, that the States Parties shall '[p]rovide those health services needed by persons with disabilities specifically because of their disabilities ... and services designed to minimize and prevent further disabilities, including among children and older persons' (paragraph (b)).

Funding will be provided to support thalidomide survivors who suffer or may be suffering from health conditions secondary to disabilities with which they were born, including, for example, one-off lump sum payments to support the health needs of survivors which may support the provision of medical services by medical practitioners or allied health professionals.

 

International Covenant on Economic, Social and Cultural Rights [1976] ATS 5 (ICESCR)

 

Article (2) of the ICESCR requires States Parties to undertake to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realisation of the rights recognised in the Covenant by all appropriate means, including particularly the adoption of legislative measures. Pursuant to Article 2(1), Australia relevantly undertakes to 'take steps ... to the maximum of its available resources, with a view to achieving progressively the full realization' of this right by all appropriate means. Article 12(1) of the ICESCR recognises the 'right of everyone to the enjoyment of the highest attainable standard of physical and mental health'. Article 12(2) further provides a non-exhaustive list of 'steps' to be taken by the Parties to achieve the full realisation of the right to health, including:

*         steps necessary for 'the prevention, treatment and control of epidemic, endemic, occupational and other diseases' (Article 12(2)(c)); and

*         steps necessary for 'the creation of conditions which would assure to all medical service and medical attention in the event of sickness' (Article 12(2)(d)).

 

Funding will be provided to ensure that health services are accessible to thalidomide survivors in the sense that survivors are made aware of the services and are directed towards appropriate services for their particular needs, which should improve the standard of care survivors receive for medical conditions relating to their exposure to thalidomide.

 

Territories power

 

Section 122 of the Constitution empowers the Parliament to 'make laws for the government of any territory'.

 

Funding will be provided to thalidomide survivors who may be located in territories. Funding will be provided for the establishment of a memorial located within the Australian Capital Territory.

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 (Health Measures No. 5) Regulations 2020

 

This disallowable legislative instrument is 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 powers in the FF(SP) Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by 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 Financial Framework (Supplementary Powers) Amendment (Health Measures No. 5) Regulations 2020 amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for government spending on the Support for Australia's Thalidomide Survivors package of measures (the support package). The Department of Health has responsibility for the support package.

 

The support package addresses a number of recommendations of the Senate Community Affairs References Committee inquiry into Support for Australia's Thalidomide Survivors. The Committee handed down its Final Report on 22 March 2019.

 

The measures to be funded under the package include:

*         a one-off lump sum payment scaled according to level of disability

*         an Extraordinary Assistance Fund to support activities of daily living which are adversely affected due to the nature of disability or impaired functional capacity, such as home and vehicle modifications;

*         a Health Care Assistance Fund to provide reimbursement of out-of-pocket health care expenses required as a result of the thalidomide related injuries;

*         annual payments scaled according to level of disability;

*         third party organisations to administer payments and to establish a national disability support service to identify and coordinate specific thalidomide support services for the survivors; and

*         a national site of recognition for thalidomide survivors and their families in the form of a public memorial to be located within the Parliamentary Triangle in Canberra.

 

All Australians recognised as thalidomide survivors, either through the 2010 ex gratia scheme established by the distributor of the drug in Australia or the 2014 class actions, or an identification/eligibility assessment process under the support package, will be provided with access to support measures under the package.

 

Human rights implications

 

This disallowable legislative instrument engages the following rights:

*         the right to health (Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), read with Article 2 of the ICESCR); and

*         the right to health without discrimination on the basis of disability (Article 25 of the Convention on the Rights of Persons with Disabilities (CRPD), read with Article 4 of the CRPD).

 

Article 12 of the ICESCR provides:

 

(1)   The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

(2)   The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for:

...

(d) The creation of conditions which would assure to all medical service and medical attention in the event of sickness.

 

Pursuant to Article 2(1), each State Party to the ICESCR is required to 'take steps ... to the maximum of its available resources, with a view to achieving progressively the full realization' of this right by all appropriate means.

 

Article 25 of the CRPD provides:

 

States Parties recognize that persons with disabilities have the right to the enjoyment of the highest attainable standard of health without discrimination on the basis of disability. States Parties shall take all appropriate measures to ensure access for persons with disabilities to health services that are gender-sensitive, including health-related rehabilitation. In particular, States Parties shall:

...

(b) Provide those health services needed by persons with disabilities specifically because of their disabilities ...

 

Article 4 of the CRPD requires States Parties to undertake to ensure and promote the full realisation of all human rights and fundamental freedoms for all persons with disabilities without discrimination of any kind on the basis of disability.

 

Funding will be provided to support Australian thalidomide survivors with much needed assistance to improve their quality of life. Alongside their existing disability, survivors are experiencing the health impacts of premature ageing and the associated increase in health care and disability support costs.

 

Conclusion

 

This disallowable legislative instrument is compatible with human rights because it promotes the protection of human rights.

 

 

 

 

 

Senator the Hon Mathias Cormann

Minister for Finance