Commonwealth Numbered Regulations - Explanatory Statements

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FINANCIAL MANAGEMENT AND ACCOUNTABILITY AMENDMENT REGULATIONS 2011 (NO. 4) (SLI NO 163 OF 2011)

EXPLANATORY STATEMENT

Select Legislative Instrument 2011 No. 163

Issued by the authority of the Minister for Finance and Deregulation

                  Financial Management and Accountability Act 1997

Financial Management and Accountability Amendment Regulations 2011 (No. 4)

The Financial Management and Accountability Act 1997 (FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act Agencies.

Subsection 65(1) of the FMA Act provides that the Governor-General may make regulations prescribing matters required or permitted by the FMA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FMA Act.

Section 5 of the FMA Act provides that for the purposes of the FMA Act, a prescribed Agency means a body, organisation or group of persons prescribed by the regulations for the purposes of that definition. Agencies are currently prescribed in Schedule 1 to the Financial Management and Accountability Regulations 1997 (the Principal Regulations).

The amending Regulations prescribe the Interim Independent Hospital Pricing Authority (Interim IHPA) as an FMA Act Agency by amending Schedule 1 to the Principal Regulations.  The Interim IHPA has also been established as an Executive Agency under subsection 65(1) of the Public Service Act 1999.

The establishment of the Interim IHPA as an Executive Agency was agreed by the Commonwealth and the States as an interim measure prior to legislation establishing a statutory authority under the FMA Act to be called the Independent Hospital Pricing Authority. 

Under the National Health Reform Agreement, the Council of Australian Governments (COAG) agreed to establish a national approach to activity based funding (ABF) and to funding public hospital services, where possible, on the basis of a national efficient price for each service. 

The Interim IHPA would: start to develop and specify national classifications to classify public hospitals' activities for ABF; determine the national efficient price for services; and resolve disputes on cross-border issues. 

The amending Regulations also correct a numbering error in the Principal Regulations.  There were two Regulations numbered 22D.  One covered "Estimates" and the other covered "Special arrangements for audit committees".  The amending Regulations re-number the latter as Regulation 22CA, reflecting its link to Regulation 22C "Audit committee".

The amending Regulations also omit the subheading "Part 1 Prescribed agencies that do not handle money other than public money" in Schedule 1 to the Principal Regulations.  This subheading is no longer necessary because the subheading "Part 2 Prescribed agencies that handle money other than public money" was previously omitted when the only prescribed Agency under it, the Australian Reward Investment Alliance, ceased to be a prescribed Agency.

The amending Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Consistent with section 17 of the Legislative Instruments Act 2003, consultation occurred with the Departments of Health and Ageing and Prime Minister and Cabinet.

The amending Regulations commence on 1 September 2011.

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