Australian Education Amendment Bill 2017 [2017] AUSStaCSBSD 160 (14 June 2017)

• Australian Education Amendment Bill 2017
• Broad delegation of legislative power 36
• Significant matters in delegated legislation38
• Parliamentary scrutiny—section 96 grants to the States40
• Broad delegation of administrative power47

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Australian Education Amendment Bill 2017

Purpose	This bill seeks to amend the Australian Education Act 2013 (the Act) to: • implement a new funding arrangements for schools; • make a number of consequential and technical amendments to the Act; and • amend the Australian Education Regulation 2013
Portfolio	Education and Training
Introduced	House of Representatives on 11 May 2017
Scrutiny principles	Standing Order 24(1)(a)(ii), (iv)and (v)

Broad delegation of legislative power ^[36]

1.46 Proposed section 35A sets out the Commonwealth share of funding for government and non-government schools. However, it states that this share of funding may be amended by the regulations. This could therefore mean that the default funding share which is set out in the bill could be amended by delegated legislation. However, the share of funding payable by the Commonwealth appears to be central to the policy changes proposed to be made by this bill.

1.47 The committee's view is that significant matters should generally be included in primary legislation unless a sound justification for the use of delegated legislation is provided. In this case, the explanatory memorandum justifies this delegation of legislative power by explaining that the 'regulation-making power is designed to ensure that sufficient flexibility is built into the Act for future government decisions on schools funding, while maintaining appropriate and sufficient Parliamentary oversight'.^[37]

1.48 The modification of the share of funding payable by the Commonwealth to government and non-government schools could, depending on the size of the change to the Commonwealth share, be a major change to the policy intent of the bill. While any regulations would be subject to disallowance, the committee's preference from a scrutiny perspective would be that a limit be set on the adjustments to the funding share that could be made via regulations.

1.49 The committee therefore suggests that it may be appropriate for the bill to be amended to set a limit on the extent to which the share of Commonwealth funding for government and non-government schools can be modified by the regulations, and seeks the Minister's response in relation to this matter.

Significant matters in delegated legislation^[38]

1.50 Proposed section 69B provides for the establishment of transition adjustment funding for transition schools. Proposed subsection 69B(1) will enable the Minister to determine an amount of transition adjustment funding for a transition school for a transition year if the Minister is satisfied prescribed circumstances apply in relation to the school for that year.

1.51 In relation to parliamentary oversight of transition adjustment funding, the explanatory memorandum states that funding will be appropriated under annual appropriation Acts, and regulations (made under section 130 of the Australian Education Act 2013) can include:

• the eligibility criteria or preconditions for transition adjustment funding (the 'prescribed circumstances' for subclause 69B(1));

• matters that the Minister may or must take into account in making a funding determination under subclause 69B(1);

• the amount of funding that may be paid for a transition school for a transition year (whether a fixed amount, a capped amount, or an amount worked out by formula) (see subclauses 69B(2) and (3)); and

• the total amount of transition adjustment funding available for a transition year (which could be a fixed amount, a capped amount, or an amount worked out by formula (see subclause 69B(4)).^[39]

1.52 Subclause 69B(5) provides that a funding determination under subclause 69B(1) is not a legislative instrument and therefore these transition adjustment funding determinations will not be subject to parliamentary disallowance. The explanatory memorandum states subclause 69B(5) is included to assist readers, as any determination under subclause 69B(1) is not a legislative instrument within the meaning of section 8 of the Legislation Act 2003.

1.53 In order to ensure that legislative power is delegated to the executive appropriately, the committee's scrutiny view is that significant matters, such as provisions relating to transition funding for schools, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided.

1.54 Given that transition adjustment funding determinations will not be subject to parliamentary disallowance, the committee requests the Minister's advice as to:

• why all of the details of the new transitional adjustment funding scheme are left to be worked out in delegated rather than primary legislation;

• whether at least some high-level eligibility criteria or preconditions for transition adjustment funding can be set out on the face of the bill (rather than the eligibility criteria and preconditions being left entirely to regulations);

• whether circumstances (i.e. eligibility criteria or preconditions for transition adjustment funding) must be prescribed in the regulations in order for the Minister to be able to validly exercise his or her power to make a transition adjustment funding determination under proposed subclause 69B(1) (i.e. if no circumstances are prescribed is the Minister able to exercise an unfettered power to make a non-disallowable transition adjustment funding determination); and

• the appropriateness of amending proposed subsection 69B(2) of the bill to:

- provide that the regulations must (rather than may) prescribe a method for working out transitional adjustment funding amounts; and/or

- provide that the regulations must (rather than may) prescribe a maximum amount that is payable for a school for a year under a transition adjustment funding determination or prescribe a method for working out that maximum amount.

Parliamentary scrutiny—section 96 grants to the States^[40]

1.55 Proposed sections 22 and 22A seek to impose new policy and funding requirements on States and Territories, as conditions of financial assistance provided to them under the Australian Education Act 2013. Specifically, these provisions provide that a payment of financial assistance will be subject to the following conditions:

• that the State or Territory implements national policy initiatives for school education agreed by the Ministerial Council from time to time;^[41]

• that the State or Territory implements national policy initiatives for school education prescribed by regulations;^[42]

• that the State or Territory is party to a national agreement relating to school education reform;^[43]

• that the State or Territory is party to an agreement with the Commonwealth relating to implementation by the State or Territory of school education reform;^[44]

• that the State or Territory complies with the two agreements mentioned above;^[45] and

• that the State or Territory maintains funding levels for school education in accordance with the regulations.^[46]

1.56 The committee makes no comment in relation the conditions of financial assistance prescribed by the regulations, as this will ensure that those conditions are subject to some level of parliamentary scrutiny and disallowance.

1.57 However, in relation to the conditions of financial assistance set out in agreements between the Commonwealth and State executive governments, the committee notes that the power to make grants to the States and to determine terms and conditions attaching to them is conferred on the Parliament by section 96 of the Constitution. If these provisions are agreed to and the Parliament is therefore delegating this power to the Executive in this instance, the committee considers that it is appropriate that the exercise of this power be subject to at least some level of parliamentary scrutiny, particularly noting the terms of section 96 of the Constitution and the role of Senators in representing the people of their State or Territory.

1.58 Noting this, and the fact that the conditions of financial assistance will be of significance to setting the policy framework of the bill, the committee suggests it may be appropriate for the bill to be amended to include at least some high-level policy initiatives and school education reform priorities which States and Territories will be required to implement in order to receive payments of financial assistance. The committee seeks the Minister's response in relation to this matter.

1.59 The committee also suggests that it may be appropriate for the bill to be amended to include a legislative requirement that any relevant agreements with the States and Territories about these grants of financial assistance are (a) tabled in the Parliament within 15 sitting days after being made, and (b) published on the internet within 30 days after being made. The committee also requests the Minister's response in relation to this matter.

Broad delegation of administrative power^[47]

1.60 Item 173 proposes to amend subsection 129(3) of the Australian Education Act 2013 to provide the Secretary with the power to delegate his or her powers under the Act to 'any APS employee'. Currently, the Secretary is restricted to delegating his or her powers to SES employees in the Department.

1.61 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.

1.62 The explanatory memorandum justifies this change by reference to two matters. First, the Minister's powers may be delegated to any APS employee, while the Secretary can only delegate to SES employees. Secondly, it is said that there are a number of powers held by the Secretary which are of a routine administrative nature and it is appropriate they be exercisable by officers below the level of SES employees. For these reasons it is concluded that the 'capacity of the Secretary to delegate his or her powers under the Act and Regulation is being aligned with the capacity of the Minister to delegate his or her powers'.^[48]

1.63 The committee has generally not accepted a desire for administrative flexibility as a sufficient justification for allowing a broad delegation of administrative powers to officials at any level. The consistency of approach between the Minister's powers of delegation and the Secretary's powers does not appear to be a sufficient justification for broadening the Secretary's powers to delegate.

1.64 The committee requests the Minister's further advice as to why it is considered necessary to allow for the delegation of any or all of the Secretary's functions or powers in these provisions and the appropriateness of amending the bill to provide some legislative guidance as to the scope of powers that might be delegated, or the categories of people to whom those powers might be delegated (for example, providing that only powers of a routine administrative nature may be delegated to non-SES employees).

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[36] Schedule 1, item 16, proposed section 35A. The committee draws Senators' attention to this provision pursuant to principle 1(a)(iv) of the committee's terms of reference

[37] Explanatory memorandum, p. 19.

[38] Schedule 1, item 40, proposed section 69B. The committee draws Senators' attention to this provision pursuant to principle 1(a)(iv) of the committee's terms of reference.

[39] Explanatory memorandum, p. 23.

[40] Schedule 1, items 59 and 60, proposed section 22 and 22A. The committee draws Senators' attention to these provisions pursuant to principle 1(a)(v) of the committee's terms of reference.

[41] Proposed paragraph 22(1)(a).

[42] Proposed paragraph 22(1)(b).

[43] Proposed paragraph 22(2)(a).

[44] Proposed paragraph 22(2)(b).

[45] Proposed paragraph 22(2)(c).

[46] Proposed section 22A.

[47] Schedule 1, item 173, proposed subsection 129(3).The committee draws Senators' attention to this provision pursuant to principle 1(a)(ii) of the committee's terms of reference.

[48] Explanatory memorandum, p. 35.