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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend various Acts relating to tertiary education and
research to:
• insert a new Part IIE establishing the office of the VET Student
Loans Ombudsman and make consequential amendments;
• update indexation against appropriation funding caps for existing
legislated amounts and includes an additional forward estimate
amount
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Portfolio
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Education and Training
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Introduced
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House of Representatives on 16 February 2017
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Bill status
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The bill received Royal Assent on 12 April 2017
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Scrutiny principles
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Standing Order 24(1)(a)(i) and (ii)
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2.23 The committee dealt with this bill in Scrutiny Digest No. 3 of 2017. The Minister responded to the committee's comments in a letter dated 8 May 2017. Set out below are extracts from the committee's initial scrutiny of the bill and the Minister's response followed by the committee's comments on the response. A copy of the letter is at Appendix 2.
The standing committee for the Scrutiny of Bills has made comments on the Education and Other Legislation Amendment Bill (No. 1) 2017 (the Bill) in its Scrutiny Digest No. 3 of 2017. These comments mainly relate to the justifications of including some powers already contained in the Ombudsman Act 1976 (Ombudsman Act).
A number of existing provisions under the Ombudsman Act were included into the Bill to take advantage of already established powers the Commonwealth Ombudsman possesses. This is important especially in consideration to the Committee's first two comments as the Bill does not create any new powers, rather it relies on already existing provisions.
The VET Student Loans Ombudsman is being established due to the widespread unscrupulous behaviour that occurred under the VET FEE-HELP scheme, particularly in relation to student recruitment practices. This unscrupulous behaviour by some providers and their agents led to students being signed up to debts that they were not aware existed and to courses that they had no prospect of completing. The VET Student Loans Ombudsman will investigate VET Student Loans and VET FEEHELP student complaints and provide recommendations.
Throughout the Parliamentary debate, all sides of Parliament commented on the need to ensure the Bill contained strong powers for the VET Student Loans Ombudsman and the Department of Education and Training to rely on to achieve positive outcomes for students. This is particularly necessary given the imbalance of power between vulnerable students and the training providers about whom the complaints will be made.
Initial scrutiny – extract
2.24 Proposed section 20ZS applies certain provisions of the Ombudsman Act 1976 to the VET Student Loans Ombudsman, including section 9 (relating to the power to obtain information and documents). Paragraph 9(4)(aa) of the Ombudsman Act provides that a person is not excused from furnishing any information, producing a document or other record or answering a question when required to do so under the Act on the ground that the furnishing of the information, the production of the document or record or the answer to the question might tend to incriminate the person or make the person liable to a penalty. This provision therefore overrides the common law privilege against self-incrimination which provides that a person cannot be required to answer questions or produce material which may tend to incriminate himself or herself.[7]
2.25 A use immunity is included in subsection 9(4) as the information or documents produced, or answers given, are not admissible in evidence in most proceedings. Although the committee welcomes the inclusion of the use immunity, the explanatory memorandum does not provide a justification for removing the privilege against self-incrimination or for not also providing a derivative use immunity.
2.26 The committee therefore requests the Minister's advice as to why it is proposed to abrogate the privilege against self-incrimination, particularly by reference to the matters outlined in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.[8]
Minister's response
2.27 The Minister advised:
The power requiring a person to produce a document or answer a question when required by the VET Student Loans Ombudsman was included under the already existing subsection 9(4) of the Ombudsman Act. I am advised that the abrogation of the privilege against self-incrimination when required to provide information to the Ombudsman has been a feature of the Ombudsman Act since 1976.
According to the Attorney-General Department's Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide), the privilege against self-incrimination may be overridden by legislation where there is a clear justification for doing so.[9]
As indicated in the background information above, any justification for inclusion of this provision should be considered in light of the context of the behaviour that resulted in negative outcomes for vulnerable students which occurred under the previous VET FEE-HELP scheme. The justification for overriding the privilege includes:
• Vulnerable students were signed up to significant debts (tens of thousands of dollars) which have not only imposed a significant financial burden on these students but also a heavy emotional toll on them whilst they try to seek redress.
• A number of providers and their agents engaged in false and misleading behaviour highlighted in the Guide as one of the three main circumstances in which the privilege against self-incrimination does not apply. The behaviour included enrolling many students by indicating they would not incur a debt.
• The collection of all relevant information relating to a student's debt is a necessary process in order for the VET Student Loans Ombudsman to make an assessment which leads to a recommendation about the complaint, and the VET Student Loans Ombudsman will be a key mechanism offering redress for a large number of these students.
• It is also important that paragraph 9(4)(aa) be read in the context of the whole of section 9, which provides significant protections to a person who provides information to the Ombudsman that might tend to incriminate that person. The rest of subsection 9(4) states that any such information is not admissible in evidence against the person. Furthermore, all information, including information that might tend to incriminate a person, is collected in private (section 8) and is subject to strict confidentiality provisions (section 35). Due to subsection 35(8), Ombudsman staff also cannot be compelled by a court to provide any information, including information that might tend to incriminate a person.
Committee comment
2.28 The committee thanks the Minister for this response. The committee notes the background information provided by the Minister in relation to the unscrupulous behaviour in the VET sector that the bill is designed to address. The committee also notes the Minister's advice that the collection of all relevant information is necessary in order for the VET Student Loans Ombudsman to make a proper assessment, and the VET Student Loans Ombudsman will be a key mechanism offering redress against unscrupulous providers for a large number of students. The committee further notes that a use immunity is provided in subsection 9(4) of the Ombudsman Act 1976 (Ombudsman Act) and that all information, including information that might tend to incriminate a person, is collected in private and is subject to strict confidentiality provisions. Furthermore, Ombudsman staff (or former staff) cannot be compelled by a court to provide any information, including information that might tend to incriminate a person.
2.29 The committee accepts that the privilege against self-incrimination may be overridden where there is a compelling justification for doing so. In general, however, the committee considers that any justification for abrogating the privilege will be more likely to be considered appropriate if accompanied by a use and derivative use immunity (providing that the information or documents produced or answers given, or anything obtained as a direct or indirect consequence of the production of the information or documents, is not admissible in evidence in most proceedings). In this case, the committee notes that the Ombudsman Act includes a use immunity but not a derivative use immunity (meaning anything obtained as an indirect consequence of the requirement to produce a document or answer a question can be used against the person in criminal proceedings). The committee considers it would have been helpful had the information provided by the Minister directly addressed the absence of a derivative use immunity in the Ombudsman Act.
2.30 The committee notes that it would have been useful had the information provided by the Minister been included in the explanatory memorandum. In light of the fact that this bill has already passed both Houses of Parliament the committee makes no further comment on this matter.
Initial scrutiny – extract
2.31 Proposed section 20ZS applies certain provisions of the Ombudsman Act 1976 to the VET Student Loans Ombudsman, including section 36 (relating to offences). Subsection 36(1) of the Ombudsman Act makes it an offence to refuse or fail to attend before the Ombudsman, to be sworn or make an affirmation, to furnish or publish information, answer a question or produce a document or record, or to give a report when so under the Act. Subsection 32(2A) provides an exception (offence specific defence) to this offence, stating that the offence does not apply if the person has a reasonable excuse. The offence carries a maximum penalty of imprisonment for 3 months or 10 penalty units.
2.32 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.
2.33 While the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified. The explanatory materials do not provide reasons for applying the reversal of the evidential burden of proof in subsection 32(2A) of the Ombudsman Act to the VET Student Loans Ombudsman scheme.
2.34 As the explanatory materials do not directly address this issue, the committee requests the Minister's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in this instance. The committee's consideration of the appropriateness of a provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.[11]
Minister's response
2.35 The Minister advised:
The inclusion of section 36 of the Ombudsman Act strengthens this Bill by making it a criminal offence where a person refuses or fails to do the following when required to do so in pursuance of the Ombudsman Act:
• to attend before the VET Student Loans Ombudsman;
• to be sworn or make an affirmation;
• to furnish or publish information;
• to answer a question or produce a document or record; and
• to give a report.
As per subsection 36(2A) of the Ombudsman Act, a person does not commit the offence if the person has a reasonable excuse. This subsection was inserted in 2001, when section 36 of the Ombudsman Act was amended to clarify the elements of the offence as a consequence of the enactment of the Criminal Code Act 1995. As the Committee notes, subsection 36(2A) imposes an evidential burden on the defendant to establish the reasonable excuse.
According to the Guide, the reversal of evidential burden of proofs may be appropriate in certain circumstances. This includes where the facts in relation to the defence might be said to be peculiarly within the knowledge of the defendant, or where proof by the prosecution of a particular matter would be extremely difficult whereas it could be readily provided by the accused.[12]
Consistent with the treatment of reasonable excuse defences in Commonwealth law generally, as the grounds on which any claim of reasonable excuse would be made are within the knowledge of the defendant—for example, that documents requested do not exist or have been destroyed, or that a person required to attend cannot because of illness—it is appropriate that the defendant establish these matters. Further the scope of possible reasonable excuses is very broad, and it would be a practical impossibility for the prosecution to establish the absence of every possible reasonable excuse.
Committee comment
2.36 The committee thanks the Minister for this response. The committee notes the Minister's advice that the reversal of the evidential burden of proof is appropriate in this instance because the grounds on which any claim of reasonable excuse would be made are within the knowledge of the defendant and that the scope of possible reasonable excuses is very broad (and therefore it would be a practical impossibility for the prosecution to establish the absence of every possible reasonable excuse).
2.37 In light of the fact that this bill has already passed both Houses of Parliament the committee makes no further comment on this matter.
Initial scrutiny – extract
2.38 Proposed subsection 34(4) will give the VET Student Loans Ombudsman the power to delegate to a person generally any or all of his or her powers under the Ombudsman Act with some exceptions.[14]
2.39 While the bill provides for these limited exclusions to the broad general power of the Ombudsman to delegate his or her powers under the Ombudsman Act, many significant powers will still be able to be delegated to any person under this provision. These powers include the power to examine witnesses and the power to enter premises.[15]
2.40 The committee has consistently drawn attention to legislation that allows the delegation of administrative powers to a relatively large class of persons, with little or no specificity as to their qualifications or attributes. Generally, the committee prefers to see a limit set either on the scope of powers that might be delegated, or on the categories of people to whom those powers might be delegated. The committee's preference is that delegates be confined to the holders of nominated officers or to members of the Senior Executive Service. Where broad delegations are provided for the committee considers that an explanation of why these are considered necessary should be included in the explanatory memorandum.
2.41 The committee therefore requests the Minister's advice as to why it is considered necessary to allow for the delegation of almost all of the Ombudsman's powers to any person (including significant powers such as the power to examine witnesses and the power to enter premises) and whether the bill can be amended to provide further legislative guidance as to the scope of powers that might be delegated, or the categories of people to whom those powers might be delegated.
Minister's response
2.42 The Minister advised:
The Ombudsman Act currently allows the Ombudsman to delegate to a person all or his or her powers under the Act with some exceptions (refer to section 34). The exceptions generally relate to reports of the Ombudsman.
Similarly, subsections 34(2) to (2B) of the Ombudsman Act also allow the Defence Force Ombudsman, the Overseas Students Ombudsman and the Postal Industry Ombudsman powers to delegate all of their powers under the Act to a person, with some exceptions.
Subsection 34(4) of the Bill similarly gives the VET Student Loans Ombudsman the same powers to delegate to a person generally any or all of his or her powers under the Ombudsman Act with exceptions.
I note the Committee's specific concerns about the delegation of powers relating to examining witnesses (section 13) and entering premises (section 14). Other Ombudsmen under the Act have retained the power to delegate the provisions under sections 13 and 14. Therefore the proposed amendments to the Ombudsman Act are consistent with these other subsections allowing the VET Student Loans Ombudsman these same powers.
The broad intent of this section is included to allow for the occasions where the Commonwealth Ombudsman might need or prefer to use an external investigation service. The external investigation service may be required due to a conflict of interest or some other sensitivity that cannot be resolved in another way; the need for some very specialist skills; or perhaps because of a joint investigation with some other body. One example of this is Australian Federal Police (AFP) investigations, where section 8(12) of the Ombudsman Act requires the Commonwealth Ombudsman to use an AFP appointee with police training to assist if that would be necessary or desirable. There is also scope for joint investigations with the AFP under s 8D of the Ombudsman Act. If either of these were to occur, it might be preferable to delegate Ombudsman Act powers to the AFP investigator.
Section 35 of the Ombudsman Act, states that once a person is delegated powers, they become an 'officer' for the purposes of the Act, and are subject to all the safeguards and controls that follow, such as confidentiality provisions.
Committee comment
2.43 The committee thanks the Minister for this response. The committee notes the Minister's advice that the provisions allowing for the broad delegation of administrative powers in this bill are consistent with other ombudsmen schemes in Commonwealth legislation. The committee also notes the Minister's advice in relation to examples of the circumstances in which it may be desirable for the VET Student Loans Ombudsman to delegate his or her powers, such as if an external investigation service is engaged, specialist skills are required or a joint investigation is conducted. The committee further notes that where a person is delegated powers under the Act, they become an 'officer' for the purposes of the Act, and are subject to all the safeguards and controls that follow, such as confidentiality provisions.
2.44 The committee reiterates its preference that delegations of administrative power be confined to the holders of nominated offices or members of the Senior Executive Service or, alternatively, a limit is set on the scope and type of powers that might be delegated. While the committee notes the Minister's advice as to examples of how it is envisaged this power will be exercised, there is nothing on the face of the bill to limit it in the way set out in the response. For example, there is no guidance in the primary legislation as to when it would be appropriate to delegate the Ombudsman's powers to an external investigation service.
2.45 The committee notes that it would have been useful had the information provided by the Minister been included in the explanatory memorandum. In light of the fact that this bill has already passed both Houses of Parliament the committee makes no further comment on this matter.
[6] Schedule 1, item 4, proposed section 20ZS (application of section 9 of the Ombudsman Act 1976).
[7] Sorby v Commonwealth [1983] HCA 10; (1983) 152 CLR 281; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328.
[8] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 94–99.
[9] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p 95.
[10] Schedule 1, item 4, proposed section 20ZS (application of section 36 of the Ombudsman Act 1976).
[11] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50–52.
[12] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 51.
[13] Schedule 1, item 6, proposed subsection 34(3).
[14] This does not apply to his or her powers under section 20ZV (reports to VET student loan scheme provides), section 20ZW (Minister to table reports about VET student loan scheme provides in Parliament), and section 20ZX (annual and other reports by the VET Student Loans Ombudsman.
[15] See sections 13 and 14 of the Ombudsman Act 1976.
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