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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 remove trial parameters to establish the Cashless Debit
Card as an ongoing program and to transition Income Management
in the Northern
Territory and Cape York Region to the card. It also seeks to make further
modifications to the operation of the program
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Portfolio
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Social Services
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Introduced
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House of Representatives on 8 October 2020
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1.96 Existing subsection 124PHA(1) of the Social Security (Administration) Act 1999 (the Act) provides that the secretary must determine that a person is not a program participant if the secretary is satisfied that being a program participant would pose a serious risk to the person's mental, physical or emotional wellbeing. Item 32 of Schedule 1 to the bill seeks to insert proposed subsection 124PHA(3) into the Act to provide that an officer or employee of a State or Territory, or of an agency or body of a State or Territory, may request that the secretary reconsider a determination made under subsection 124PHA(1) if the officer or employee considers that is necessary for medical or safety reasons relating to the person or their dependents. If the secretary receives such a request and is no longer satisfied of the matter in subsection 124PHA(1) the secretary must revoke the determination.[82]
1.97 The committee has consistently drawn attention to legislation that allows administrative powers to be exercised by 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 on the categories of people who may exercise administrative powers that may affect a person's rights and liberties. The committee's preference is that those authorised to exercise significant administrative powers be confined to the holders of nominated offices or to members of the Senior Executive Service (or equivalent). The committee has generally not accepted a desire for administrative flexibility as a sufficient justification for allowing broad classes of persons to exercise significant administrative powers.
1.98 Where significant administrative powers may be exercised by a broad class of persons, the committee considers that an explanation of why this is considered necessary should be included in the explanatory memorandum. In this instance, the explanatory memorandum does not provide a justification as to why it is necessary to allow such a broad class of persons to request that the secretary reconsider a determination that a person is not a program participant.
1.99 The committee therefore requests the minister's advice as to:
• why it is considered necessary and appropriate to allow any officer or employee of a State or Territory, or of an agency or body of a State or Territory, to request that the secretary reconsider a determination made under existing subsection 124PHA(1) that a person is not a program participant; and
• whether the bill can be amended to limit the categories of State or Territory officers or employees who may make such a request.
1.100 Item 37 of Schedule 1 seeks to insert proposed subsections 124PHB(7A) and (7B) into section 124PHB of the Act. Proposed subsection 124PHB(7A) provides that the secretary must, in deciding whether a person can demonstrate reasonable and responsible management of the person's affairs (including financial affairs) under existing subsection 124PHB(3), comply with any decision-making principles determined in an instrument under proposed subsection 124PHB(7B). This has the effect that the decision-making principles that the secretary must comply with in deciding whether a person may exit the cashless debit card program (CDC) may be set out in delegated as opposed to primary legislation.
1.101 The committee's view is that significant matters, such as decision-making principles relating to an application to exit the CDC program, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. In this instance the explanatory memorandum states:
New subsection 124PHB(7B) provides that the Minister may, by legislative instrument, determine decision-making principles for the purposes of subsection 124PHB(7A). This instrument is subject to disallowance. Such principles would not introduce new criteria, rather they will help to guide the future exercise of discretion and provide participants with greater clarity relating to the considerations that underpin the determination of exit applications.[84]
1.102 While the committee acknowledges this explanation, and considers that the inclusion of decision-making principles in a disallowable legislative instrument is preferable to these matters being left to internal policy guidance, it is unclear to the committee why at least high level guidance or principles cannot be included in the primary legislation. The committee notes that the explanatory memorandum states that the decision-making principles would not introduce new criteria but would act as a guide to determining exit applications. This appears to indicate that the department is aware of at least the type of decision-making principles or the general guidance that will be used to make up the decision-making principles. Given that it appears the department is (at least broadly) aware of the principles it will rely on in decision-making the committee considers that the explanatory memorandum does not sufficiently justify why these principles should be left to delegated legislation.
1.103 In addition, the committee notes the explanation that the purpose of the decision-making principles is to 'provide participants with greater clarity relating to the considerations that underpin the determination of exit applications'. The committee's view is that greater clarity and certainty on the decision-making principles which underpin exit applications would be achieved by enshrining these principles in primary legislation.
1.104 The committee notes that a legislative instrument, made by the executive, is not subject to the full range of parliamentary scrutiny inherent in bringing proposed changes in the form of an amending bill.
1.105 In light of the above the committee requests the minister's advice as to:
• why it is considered necessary and appropriate to leave the decision-making principles in relation to whether a person may exit the cashless debit card to delegated legislation; and
• whether the bill can be amended to provide for the decision-making principles (or high-level guidance in relation to the principles) on the face of the primary legislation, or, at a minimum, to provide that the minister 'must', rather than 'may', determine decision-making principles for the purposes of proposed subsection 124PHB(7A).
1.106 Proposed subsection 124PD(1A) provides that the minister may determine an area for the purposes of the definition of 'Cape York area' by notifiable instrument (which is not subject to parliamentary disallowance). Such a determination may have the effect of making a person within the defined area a participant in the CDC program.
1.107 In addition, item 64 seeks to amend subsection 124PD(2) to permit the minister to determine, by notifiable instrument, a part of the Northern Territory that is excluded from the definition of 'program area'.
1.108 Where a bill provides that significant matters may be determined in an instrument that is not subject to parliamentary disallowance, the committee expects the explanatory memorandum to the bill to address why it is appropriate to exempt the instrument from the usual disallowance process. In this instance the explanatory memorandum states:
Item 63 inserts a new subsection 124PD(1A) to provide that the Minister may determine an area for the purposes of the definition of Cape York area by notifiable instrument. This is required to establish the area as a program area and ensure consistency with the definition of the Cape York area used by the FRC. This new power to make a notifiable instrument is consistent with the existing power under section 124PD(2), which is to be modified to establish the NT as a program area.[86]
1.109 The committee does not consider the fact that there is an existing power under section 124PD(2) to make notifiable instruments to exclude part of an area from the program is a sufficient justification for exempting such significant matters from parliamentary scrutiny, particularly noting that bill seeks to establish the CDC as an ongoing measure. In this regard the committee considers that the explanatory memorandum does not provide a sufficient explanation as to why it is necessary and appropriate to set out the definition of 'Cape York area', and to determine areas excluded from the definition of 'program area', in a notifiable instrument.
1.110 The committee notes that notifiable instruments are not subject to the tabling, disallowance and sunsetting requirements that apply to legislative instruments under the Legislation Act 2003. Parliamentary scrutiny of the determinations would therefore be very limited. The committee's longstanding scrutiny view is that significant matters, such as the areas in which the cashless welfare arrangements are to apply, should be included in primary legislation or at least in delegated legislation that is subject to parliamentary disallowance.
1.111 The committee therefore requests the minister's advice as to:
• why it is considered necessary and appropriate for determinations made under proposed subsection 124PD(1A) and existing subsection 124PD(2) to be notifiable instruments which are exempt from parliamentary scrutiny including disallowance; and
• whether the bill can be amended to:
- set out the definition of 'Cape York area' on the face of the primary legislation or, at a minimum, to provide that determinations made under proposed subsection 124PD(1A) are legislative instruments subject to parliamentary disallowance; and
- provide that determinations made under existing subsection 124PD(2) (relating to the exclusion of part of an area from the program) are legislative instruments subject to parliamentary disallowance.
1.112 Item 84 of the bill seeks to amend section 124PJ of the Social Security (Administration) Act 1999 (the Act). The amendments would specify the portion of restrictable payments that are designated 'restricted' and 'unrestricted' for certain program participants.[88]
1.113 Proposed subsection 124PJ(2A) would permit the minister to determine, by notifiable instrument, the percentage of income that is designated as 'restricted' for persons who are program participants under subsection 124PGE(1) whose usual place of residence is, becomes or was within an area specified in the instrument. The 'restricted' portion may be varied to a percentage higher than 50% but no higher than 80%, and the 'unrestricted portion' may be varied to a percentage lower than 50%.
1.114 In relation to this the explanatory memorandum states:
This subsection will enable the Minister to increase the restricted portion to a maximum of 80 per cent, for program participants under 124PGE(1) for specific communities in the NT to reflect community requests. This subsection is included to allow communities that wish to increase the restricted portion to 80 per cent. This is consistent with arrangements for existing CDC program areas where the maximum restricted portion is 80 per cent. It is appropriate for these variations to be made by determination because the Secretary has a power under subsection 124PJ(3) to determine the restricted and unrestricted portions for an individual which...will prevail over any Ministerial determination in accordance with new subsection 124PJ(2C).
A notifiable instrument made under subsection 124PJ(2A) or 124PJ(2B) is not subject to disallowance.
1.115 Proposed subsection 124PJ(2B) would similarly permit the minister to determine, by notifiable instrument, the percentage of income that is designated as 'restricted' for persons who are program participants under subsection 124PGE(2) or (3). The restricted portion may be varied to a percentage not exceeding 80% and including 0%, and the unrestricted portion may be varied to a percentage not exceeding 100%.
1.116 In relation to this the explanatory memorandum states:
This subsection will enable the Minister to either increase or decrease the restricted and unrestricted portions for the entire cohort of program participants under subsection 124PGE(2) or (3), to reflect requests made by a recognised State/Territory authority in the NT or a child protection officer.
The power for the Minister to vary the percentages in subsections 124PJ(2A) and 124PJ(2B) is consistent with the approach of the measure that was introduced by the Social Security and Other Legislation Amendment (Welfare Reform and Reinstatement of Racial Discrimination Act) Act 2010. That is, it is not appropriate to specify the requirements of this in legislation to ensure the format of these requests and the nature of any necessary engagement with the community following a request, is flexible to respond to the specific circumstances of that community. The Minister will only exercise this power following a request from the community. The measure recognises the different approaches that different communities may take to submit a request. For example, some communities may prefer to use a local Aboriginal corporation, local government organisation or other representative body to act on behalf of the community in making such a request.
When considering a community request, the Minister will undertake necessary consultation before deciding whether to make an instrument varying the restricted portions.
1.117 While noting the information provided in the explanatory memorandum, the committee is concerned that proposed subsections 124PJ(2A) and (2B) would confer on the minister broad powers to determine, in relation to classes of program participants, the portion of payments that are restricted, with little or no guidance on the face of the bill as to how these powers are to be exercised. For example, it does not appear that the minister would be required to consider any particular matter before exercising the powers, or that the exercise of the powers would be required to follow a request from the community or from a relevant officer. In this regard, the committee has generally not accepted a desire for flexibility to be a sufficient justification for providing ministers with broad discretionary powers.
1.118 The explanatory memorandum notes that the secretary's power under existing subsection 124PJ(3) to determine the restricted and unrestricted portions of income in relation to an individual prevails over a determination of the minister under proposed subsections 124PJ(2A) or (2B). However, it is unclear how the secretary's power under subsection 124PJ(3) would be effective to ensure that the minister's powers are exercised appropriately, noting that the minister's powers apply to classes of participants while the secretary's powers apply to individuals.
1.119 In this case, the committee's scrutiny concerns are heightened because ministerial determinations would be made by notifiable instruments, which are not subject to the tabling, disallowance and sunsetting requirements that apply to legislative instruments under the Legislation Act 2003. Parliamentary scrutiny of the determinations would therefore be very limited. The committee's longstanding view is that significant matters, such as the restricted and unrestricted portions of social security payments, should be included in primary legislation or at least in delegated legislation which is subject to parliamentary disallowance.
1.120 The committee therefore requests the minister's more detailed advice as to:
• how the secretary's powers in subsection 124PJ(3) would be effective to ensure the minister's powers under proposed subsections 124PJ(2A) and (2B) (relating to the percentage of payments that are designated as 'restricted') are exercised appropriately;
• whether (at least high-level) rules or guidance in relation to the exercise of powers under proposed subsections 124PJ(2A) and (2B) could be included in the bill, including a requirement that the minister only exercise these powers after community consultation and a subsequent community request; and
• whether the bill could be amended to provide that determinations made under proposed subsections 124PJ(2A) and (2B), to vary the restricted portion of social security benefits for a class of program participants, are to be made by disallowable legislative instrument, rather than notifiable instrument
1.121 Item 93 seeks to add proposed sections 124POB, 124POC and 124POD at the end of Division 4 of Part 3D of the Act. Each of those provisions would allow the secretary, and specified state and territory government officials, to share information relating to current or prospective program participants. The information must be relevant to the operation of Part 3D of the Administration Act (which relates to the cashless welfare arrangements).[90]
1.122 In relation to these proposed sections the explanatory memorandum states:
Item 93 adds new sections 124POA, 124POB, 124POC and 124POD at the end of Division 4 of Part 3D, which authorises certain information disclosures to be made to the Secretary by an officer or employee of a financial institution or by a member, officer or employee of a community body (as well as certain reverse disclosures).
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New sections 124POB, 124POC and 124POD replicate the current information sharing provisions in place for IM in Part 3B of the Social Security Administration Act. This will support information sharing between the Secretary on the one hand and, on the other, the FRC, child protection officers in the NT or other officers or employees of recognised State/Territory authority of the NT. These powers are essential to ensure that the cashless welfare arrangements operates effectively and that people can, or are only required to, enter and exit the cashless welfare arrangements as is appropriate to their circumstances.[91]
1.123 The statement of compatibility adds:
Proposed sections 124POA to 124POD of the Bill expand the existing disclosure provisions for the disclosure of information under IM to the CDC program provisions. The purpose of disclosures by the Secretary under these provisions is to ensure that the CDC program is properly administered and appropriate information can be shared about a participant to provide protective support.
Any limitation on a person’s right to privacy is reasonable and proportionate given the extensive social harm that exists in the program areas. There are also effective community safeguards over the extent of the restrictions imposed. [92]
1.124 In addition, item 96 seeks to amend paragraph 192(db) of the Act to extend the Secretary's power in section 192 of that Act to Part 3D. In effect, this would permit the secretary to require a person to give information or produce a document to the department where the secretary considers that the information or document may be relevant to the operation of Part 3D (relating to cashless welfare arrangements). In relation to this provision, the explanatory statement explains:
This amendment is essential to allow the Secretary to determine whether a person should not participate in the cashless welfare arrangements on the basis of their mental, physical or emotion wellbeing or where they can demonstrate reasonable or responsible management of their affairs (including their financial affairs).[93]
1.125 The committee acknowledges the importance of ensuring that the CDC program is properly administered—including by ensuring that the program only extends to appropriate persons. However, the committee is concerned that allowing the sharing of information about program participants and extending the secretary's power to require information and documents may trespass unduly on individuals' privacy. In this respect, the committee notes that neither the explanatory memorandum nor the statement of compatibility provide detail as to the type of information that may be shared under proposed sections 124POB, 124POC and 124POD, nor the type of information or documents that may be required to be produced under paragraph 192(db).
1.126 In relation to proposed sections 124POB, 124POC and 124POD, the statement of compatibility states that there are 'effective community safeguards' in place. However, it does not provide any further detail (for example, expressly identifying the safeguards or explaining how they will operate in practice).
1.127 As the explanatory materials do not adequately address this matter, the committee requests the minister's detailed advice as to:
• the type of information that would be collected under paragraph 192(db) of the Social Security (Administration) Act 1999 as amended by the bill;
• the type of information that would be shared under proposed sections 124POB, 124POC and 124POD; and
• any relevant safeguards in place to protect individuals' privacy.
[81] Schedule 1, item 32, proposed subsection 124PHA(3). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).
[82] Proposed subsection 124PHA(3A).
[83] Schedule 1, item 37, proposed subsection 124PHB(7B). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[84] Explanatory memorandum, p. 10.
[85] Schedule 1, items 63 and 64, proposed subsections 124PD(1A) and (2). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[86] Explanatory memorandum, p. 15.
[87] Schedule 1, item 87 proposed subsections 124PJ(2A) and (2B). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[88] A 'restrictable payment', in relation to a participant, refers to a variety of tax and social security benefits (set out in section 124PD of the Act). The 'restricted portion' is the portion that may not be used to obtain alcoholic beverages, for gambling, or to obtain certain 'cash-like' products. The 'unrestricted portion' may be used at the recipient's discretion.
[89] Schedule 1, item 93 proposed subsection 124POB, 124POC and 124POD, and Schedule 1, item 96, proposed paragraph 192(db). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[90] Proposed paragraphs 124POB(1)(b), 124POC(1)(b) and 124POD(1)(b).
[91] Explanatory memorandum, p. 23.
[92] Explanatory memorandum, p. 33.
[93] Explanatory memorandum, p. 24.
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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2020/187.html