|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
|
Purpose
|
This bill, along with the Financial Regulator Assessment Authority
(Consequential Amendments and Transitional Provisions) Bill 2021, seeks to
establish the Financial Regulator Assessment Authority to assess the
effectiveness and capability of each of the Australian
Prudential Regulation
Authority and Australian Securities and Investments Commission
|
|
Portfolio
|
Treasury
|
|
Introduced
|
House of Representatives on 13 May 2021
|
|
Bill status
|
Received the Royal Assent on 29 June 2021
|
2.12 In Scrutiny Digest 8 of 2021 the committee requested the Treasurer's advice as to whether clause 17 of the bill can be amended to provide that the minister must arrange for a copy of a report prepared under paragraph 12(1)(c) to be tabled in each House of the Parliament within 15 sitting days of the House after the report is given to the minister.
2.13 The committee also requested the Treasurer’s advice as to why clause 17 provides that biennial reports must be tabled in Parliament within 20 sitting days after the report is received by the minister, rather than the standard 15 sitting days.[9]
Treasurer's response[10]
2.14 The Treasurer advised:
Background
Clause 12 of the Bill sets out the Authority's functions, which include assessing and reporting on the effectiveness and capability of both the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC). The Authority must provide each of these reports to the Minister biennially (clause 13).
Clause 17 of the Bill provides that the Minister must cause a copy of a biennial report to be tabled in each House of the Parliament within 20 sitting days of receiving the report.
Clause 12 also allows the Authority to make a report to the Minister on any matter relating to APRA or ASIC's effectiveness or capability where they are requested to do so by the Minister. There is no requirement for these ad hoc reports to be tabled in the Parliament.
Ad hoc reports
The power for the Minister to request ad hoc reports from the Authority is a broad one, and allows the Minister to request a report on any matter relating to the effectiveness or capability of APRA or ASIC. Such a report may relate to sensitive matters concerning the operation of APRA or ASIC.
I do not consider it necessary to amend the Bill to require ad hoc reports to be tabled. These reports may identify potential systematic issues with APRA or ASIC identified by the Authority, or make recommendations to Government about APRA or ASIC. While the Minister may choose to table an ad hoc report, it is not appropriate for this to be compulsory.
I note that biennial reports provided by the Authority will always be required to be tabled. These reports are expected to provide a comprehensive review of the function of each regulator, and will provide opportunity for public debate about how APRA and ASIC are undertaking their respective roles.
Biennial reports
The Bill requires that biennial reports must be tabled in each House of the Parliament within 20 sitting days, rather than 15 sitting days. Tabling within 20 sitting days was recommended by Commissioner Hayne in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
2.15 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that ad hoc reports may relate to sensitive matters concerning the operation of APRA or ASIC and may identify potential systematic issues with APRA or ASIC or may make recommendations to the government about APRA or ASIC. As such, the Treasurer advised that it would not be appropriate to require that ad hoc reports be tabled in Parliament. The Treasurer also noted that the requirement that biennial reports be tabled in Parliament will provide opportunities for public debate about the functions of APRA and ASIC.
2.16 The Treasurer further advised that the requirement that biennial reports be tabled within 20 days after the report is received by the minister, rather than the standard 15 sitting days, is based on a recommendation by Commissioner Hayne in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
2.17 While noting this advice, the committee reiterates that not providing for reports to be tabled in Parliament reduces the scope for parliamentary scrutiny. The process of tabling documents in Parliament alerts parliamentarians to their existence and provides opportunities for public debate that are not otherwise available. The fact that a report may identify issues with Commonwealth bodies, or may make recommendations, is not a sufficient justification for failing to provide for the usual tabling requirements. Rather, the committee considers that the need to table reports may be heightened in those circumstances. From a scrutiny perspective, the committee therefore does not consider that the Treasurer's response has provided a sufficient justification in relation to the tabling of ad-hoc reports.
2.18 The committee notes Commissioner Hayne's recommendation in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that "the Minister should be required to cause a copy of the report to be laid before each House of the Parliament within 20 sitting days of that House after the report is received by the Minister."[11] However, it remains unclear to the committee why it is necessary and appropriate to deviate from the standard requirement that reports be tabled within 15 sitting days of receipt, noting that neither the royal commission report nor the explanatory memorandum to the bill provide an explanation for this approach.
2.19 The committee notes that the bill has already passed both Houses of the Parliament. The committee considers that when future changes to the Financial Regulator Assessment Authority Act 2021 are being formulated consideration should be given to amending section 17 of the Act to provide that ad hoc reports must be tabled in each House of the Parliament.
2.20 In Scrutiny Digest 8 of 2021 the committee requested the Treasurer's advice as to the rationale for, and the appropriateness of, abrogating legal professional privilege in the bill.[13]
Treasurer's response
2.21 The Treasurer advised:
Clause 20 of the Bill requires APRA and ASIC, as well as their members and staff, to cooperate with the Authority, including by providing the Authority with information or documents. Clause 21(1) provides that the information or documents must be provided to the Authority regardless of whether legal professional privilege applies to the documents. Clause 21(2) confirms that the giving of information to the Authority under clause 21(1) does not affect a claim of legal professional privilege.
The provisions are necessary to ensure the ability of the Authority to conduct its core functions. Due to the nature of the work undertaken by the regulators, a large proportion of information handled by them that would be relevant to assessing their performance (particularly under their enforcement remit), may be covered by legal professional privilege. If the information or documents could not be disclosed to the Authority it would severely impede the ability of the Authority to conduct an objective assessment of the effectiveness of the regulators, as the Authority would either be unable to access many documents relevant to their assessment, or encounter great difficulty in accessing them.
Further, as the Committee has noted, the Bill also includes protections for information or documents that are covered by legal professional privilege. Such information or documents will be "protected information" and protected from disclosure by the Authority.
Committee comment
2.22 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that it is necessary to require that the relevant information or documents must be provided to the Authority regardless of legal professional privilege in order to ensure the ability of the Authority to conduct its core functions. The Treasurer advised that a large portion of the information and documents of interest to the Authority may be covered by legal professional privilege and that, as such, the ability of the Authority to carry out its functions would be severely impeded if this information could not be accessed.
2.23 In light of the fact that the bill has already passed both Houses of the Parliament, and noting the information provided, the committee makes no further comment on this matter.
2.24 In Scrutiny Digest 8 of 2021 the committee requested the Treasurer's more detailed justification as to the appropriateness of including the specified matters as offence-specific defences.
2.25 In addition, from a scrutiny perspective, the committee suggested that it may be appropriate if the bill were amended so that the offence-specific defences in subclauses 40(2) and 40(3) are instead framed as elements of the relevant offence. The committee also requests the Treasurer's advice in relation to this matter.[15]
Treasurer's response
2.26 The Treasurer advised:
Clause 40 of the Bill prohibits a person who is or was an "entrusted person" from disclosing "protected information" in certain circumstances. Broadly, entrusted persons will be the staff and members of the Authority, the Secretary of the Treasury, APS employees, and consultants or others engaged to provide services to the Authority (including officers or employees of consultants or other service providers) ( clause 5).
The prohibition on the unauthorised disclosure of protected information is important because of the range of sensitive information that will be provided to the Authority by APRA and ASIC. For example, this includes information that is otherwise prohibited from being disclosed by legislation, information subject to legal professional privilege, and documents that would reveal Cabinet deliberations.
The Bill also allows for the disclosure of information in a limited number of circumstances (see Subdivision B, Division 3 of Part 4 to the Bill), and it is not anticipated that a disclosure would take place outside of those circumstances. In this way, the prohibition serves as a general deterrent against the unauthorised disclosure of information.
It is appropriate to reverse the evidential burden of proof in the offence-specific defence in relation to the prohibition, because the matter is peculiarly within the knowledge of the defendant, and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.
Committee comment
2.27 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that it is appropriate to reverse the evidential burden of proof in this instance, because the matter is peculiarly within the knowledge of the defendant, and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.
2.28 While noting this advice, it is not clear from this justification why the relevant knowledge will be peculiarly within the knowledge of the defendant in respect of the offence-specific defences set out at subclauses 40(2) and (3) of the bill. It is not clear to the committee which specific 'matter' the Treasurer is referring to in his response. However, it would appear that several elements of the defences set out at clause 40 would be readily ascertainable by the prosecution. For example, as noted in the committee's previous comment, whether disclosure of information is authorised by another Commonwealth law would appear to be a matter that the prosecution could establish.
2.29 The committee also notes that the Treasurer's response does not address the committee's concerns in relation to the assertion in the explanatory memorandum that the relevant matters are 'in many cases' within the knowledge of the defendant. As noted in the committee's previous comments on the bill, the committee considers that the matter must be, as a matter of course, peculiarly within the defendant’s knowledge and not available to the prosecution.
2.30 As such, from a scrutiny perspective, the committee does not consider that the Treasurer has adequately addressed the committee's scrutiny concerns in relation to the reversal of the evidential burden of proof in clause 40 of the bill.
2.31 The committee continues to have scrutiny concerns regarding provisions of the bill that allow for the reversal of the evidential burden of proof. However, in light of the fact that the bill has already passed both Houses of the Parliament, the committee makes no further comment on these matters.
2.32 In Scrutiny Digest 8 of 2021 the committee requested the Treasurer's advice as to why it is considered necessary and appropriate to confer immunity from liability on members and staff members of the Authority and on consultants, contractors, and members and staff members of cooperating agencies.[17]
Treasurer's response
2.33 The Treasurer advised:
Clause 47 of the Bill protects members, staff members, consultants and contractors of the Authority, and members and staff of cooperating agencies from liability in specified circumstances related to the Authority.
This protection from civil liability is required for the Authority to be able to conduct its functions. The Authority's functions involve providing reports to the Minister relating to the functioning and performance of APRA and ASIC. These functions rely on the Authority being able to provide frank advice and may involve the provision of advice that is critical of agencies in question. As a result, it is necessary that protected persons are able to perform their functions and exercise their powers without being obstructed by challenges to the performance of those functions or the exercise of those powers through civil proceedings for loss, damage or injury. The lack of a liability protection could limit the Authority's ability to undertake its functions and discourage the Authority from providing comprehensive advice to Government.
Committee comment
2.34 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the protection from civil liability afforded by clause 47 is required for the Authority to be able to conduct its functions. The Treasurer advised that the Authority's reporting functions rely on the Authority being able to provide frank advice and may involve the provision of advice that is critical of APRA and ASIC. The lack of a liability protection could limit the Authority's ability to provide comprehensive advice to government.
2.35 In light of the fact that the bill has already passed both Houses of the Parliament, and noting the information provided, the committee makes no further comment on this matter.
2.36 In Scrutiny Digest 8 of 2021 the committee requested the Treasurer's advice as to why it is considered necessary and appropriate to allow the Authority to delegate its information-gathering powers under subclause 20(2) to Executive Level 2 staff members, rather than restricting the delegation of these powers to members of the Senior Executive Service or to holders of nominated offices.[19]
Treasurer's response
2.37 The Treasurer advised:
As the Committee has noted, the Authority is permitted to delegate its information-gathering powers to certain of its staff members, including to an Executive Level 2 staff member.
The staff members of the Authority will be made available by the Secretary of the Treasury. It is expected that there will be a relatively small number of employees of the Authority, and that the most senior full-time staff member of the Authority will be an Executive Level 2 employee of the Treasury. As such, the Authority must be able to delegate certain of its functions to an Executive Level 2 staff member.
I note that this delegation only applies to the information-gathering powers of the Authority. All other powers set out in the Bill that may be delegated may only be delegated to the Secretary of the Treasury or a SES employee (or acting SES employee) of the Treasury.
Committee comment
2.38 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the Authority will have a relatively small number of employees, and that the most senior full-time staff member of the Authority will be an Executive Level 2 employee of the Treasury. The Treasurer advised that, as such, the Authority must be able to delegate certain of its functions to an Executive Level 2 staff member. Delegations to an Executive Level 2 staff member are limited to the Authority's information-gathering functions.
2.39 In light of the fact that the bill has already passed both Houses of the Parliament, and noting the information provided, the committee makes no further comment on this matter.
[8] Paragraph 12(1)(c) and clause 17. The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(v).
[9] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 17–18.
[10] The Treasurer responded to the committee's comments in a letter dated 23 June 2021. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 10 of 2021 available at: www.aph.gov.au/senate_scrutiny_digest.
[11] Commonwealth of Australia, Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, 2019, vol. 1, p. 478.
[12] Clause 21. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[13] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 18–19.
[14] Clause 40. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[15] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 19–20.
[16] Clause 47. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[17] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 20–21.
[18] Subclause 49(2). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).
[19] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2021, pp. 21–22.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2021/152.html
