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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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The bill seeks to make various amendments to the National Disability
Insurance Scheme Act 2013, including to: introduce a new definition
of ‘NDIS supports’; expand National Disability Insurance Scheme
(NDIS) rules
relating to access requirements; empower the CEO to request
information and reports relating to the participant; provide for new
framework
plans; and allow for the imposition of conditions on approval of quality
auditors.
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Portfolio
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National Disability Insurance Scheme
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Introduced
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House of Representatives on 27 March 2024
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Bill status
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Before the Senate
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2.137 The National Disability Insurance Scheme Act 2013 (the NDIS Act) provides the minister with extensive rule-making powers. Existing section 209 of the NDIS Act provides that the minister may, by legislative instrument, make rules called the National Disability Insurance Scheme rules and sets out four categories of rules which require different levels of consultation and agreement with the Commonwealth and host jurisdictions.
2.138 Item 123 of Schedule 1 to the bill seeks to introduce new table item 42AC into section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015 (LEOM) to include the National Disability Insurance Scheme rules, within the meaning of the NDIS Act, and any other instrument made under the NDIS Act. The effect of this provision is that the NDIS rules and any other instrument made under the NDIS Act are exempt from sunsetting.
2.139 The committee’s concerns are heightened in this instance given the extensive rule-making powers that exist in the NDIS Act and which are proposed to be expanded in the bill.[214]
2.140 In Scrutiny Digest 6 of 2024 the committee requested the minister’s advice as to:
• why it is considered appropriate to provide for a blanket exemption from sunsetting for the NDIS rules and all instruments made under the NDIS Act, with particular consideration to the implications this would have on parliamentary rather than executive oversight;
• why it is appropriate to include such extensive rule-making powers, and
• whether more specific consultation requirements with people impacted by the NDIS rules can be included in the bill, namely the disability community.[215]
2.141 The Minister for the National Disability Insurance Scheme (the minister) advised the committee that the NDIS is an intergovernmental scheme. As such, the minister advised that the rules are likely already exempt from sunsetting under subsection 54(1) of the Legislation Act 2003 and that this amendment seeks to clarify the exemption from sunsetting.
2.142 The minister advised that it is not appropriate for the Commonwealth to unilaterally repeal instruments that require agreement from state and territory governments to be made. The minister provided further explanation as to the consultation requirements for policy matters under the NDIS by the Ministerial Council in section 12 of the NDIS Act and graded levels of consultation for NDIS rules in section 209 of the NDIS Act. The minister explained that these requirements create a unique operating environment for the NDIS in terms of legislative instruments, compared to other Commonwealth legislative schemes, and that is why exemption from sunsetting is appropriate in this particular statutory context.
2.143 The minister further advised that these instruments are made in the best interests of people with disability and are subject to consultation and co-design with the disability community, and as such it would be disempowering for the disability community for them to sunset.
2.144 In relation to the committee’s concerns on the appropriateness of including extensive rule-making powers, the minister advised that the inclusion of detail in legislative instruments rather than the Act enables deeper engagement on operational matters through consultation and co-design. Additionally, this detail ensures that how the NDIS operates is not decided by the Commonwealth in isolation and is, instead, co-designed by NDIS participants and is consistent with the intergovernmental nature of the NDIS.
2.145 The minister further stated that the expanded rule-making powers allow for the National Disability Insurance Agency (NDIA) Operational Guidelines to become legislative instruments and the inclusion of these in rules rather than primary legislation improves flexibility in response to changing circumstances. The minister advised this will provide greater transparency and parliamentary oversight as well as greater clarity and certainty for participants as to the basis of their eligibility to the NDIS.
2.146 In relation to whether more specific consultation requirements with people impacted by the NDIS rules could be included in the bill, the minister advised that the NDIS Act requires the Minister to have regard to the NDIS Act’s objects and principles when making NDIS rules and, further, subsection 4(9A) provides that ‘[p]eople with disability are central to the National Disability Insurance Scheme and should be included in a co-design capacity.’
2.147 The minister further advised that section 17 of the Legislation Act 2003 requires rule-makers to undertake appropriate consultation before an instrument is made, including representatives of persons who are likely to be affected by the proposed instrument.
2.148 The minister advised that the inclusion of any additional reference to consultation with the disability community beyond what appears in the NDIS Act and the Legislation Act 2003 is unnecessary and may lead to unintended consequences. For example, as there is no accepted process for ‘co-design’ and no existing statutory definition, the inclusion of an express reference to co-design could result in legal uncertainty on whether an instrument is made legitimately, therefore impacting the operation of the NDIS.
2.149 The committee thanks the minister for this response.
2.150 While acknowledging the minister’s advice that the rules are exempt from sunsetting because the NDIS is an intergovernmental scheme subject to separate consultation requirements with states and territories and the disability community, the committee reiterates its view that it does not consider the fact that a number of executive governments have reached agreement in relation to a particular matter precludes the need for parliamentary oversight of the laws resulting from such agreement.
2.151 The committee notes that the making of the NDIS rules is an exercise by the Commonwealth Executive of legislative power that has been delegated to it by the Commonwealth Parliament in pursuance of the objectives of a scheme legislated by the Parliament. As such, the committee is of the view that it would be entirely appropriate for the Parliament to maintain oversight of such instruments through the sunsetting process.
2.152 The committee strongly disagrees with the characterisation of the operation of the sunsetting scheme in the Legislation Act 2003 as a unilateral decision by the Commonwealth to repeal rules agreed to under the NDIS with the effect of disempowering the disability community. Sunsetting provides for the automatic repeal of delegated legislation ten years after registration on the Federal Register of Legislation in order to provide the opportunity for Parliament, ministers and agencies to reconsider the content of delegated legislation and ensure it remains appropriate. Sunsetting allows Parliament to maintain effective, regular oversight over powers it has delegated to the Executive.[217] The sunsetting process therefore operates to ensure appropriate consideration is made as to whether rules made remain fit for purpose and can encourage ongoing consultation with the disability community.
2.153 In relation to the minister’s advice that the extensive rule-making powers are appropriate to enable greater consultation and co-design, it is unclear to the committee how including greater detail in the NDIS Act itself would preclude co-design with the disability community. The committee notes with concern the minister’s advice that inclusion of matters in a bill means that the Commonwealth is acting in isolation rather than in a co-designed process, instead of consulting appropriately on the development of primary legislation.
2.154 In relation to the minister’s advice that the inclusion of extensive rule-making powers is necessary to ensure flexibility as to the NDIS Act’s operation, the committee has generally not accepted a desire for administrative flexibility to be a sufficient justification, in itself, for leaving significant matters to delegated legislation. While making NDIS Operational Guidelines as rules as opposed to non-legislative guidance would improve transparency, parliamentary oversight, clarity and certainty, the committee considers that including significant matters such as eligibility for access to the NDIS in the NDIS Act itself would achieve this to a greater extent.
2.155 The committee further acknowledges the minister’s advice that it is unnecessary to include more specific consultation requirements in the NDIS Act than already exist. The committee notes, however, that while the general principles provision in section 4 of the NDIS Act, as well as section 17 of the Legislation Act 2003, may guide ministerial action, these provisions are not binding and do not provide a legislative requirement to consult with the disability community.[218]
2.156 The committee rejects the proposition that including a specific consultation requirement in the NDIS Act would lead to unintended consequences including legal uncertainty and may impact the operation of the NDIS. The committee notes that numerous other bills and Acts include specific consultation requirements where appropriate, for example sections 33 and 36 of the New Vehicle Efficiency Standard Act 2024 includes specific requirements for the minister to publicly consult before making a determination, and proposed section 826M of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 includes requirements for the Australian Securities and Investments Commission to consult with the Reserve Bank and any other person or body prescribed by the regulations before making certain kinds of rules. The committee further notes that the House of Representatives agreed to two amendments to proposed subsections 32K(3) and 32L(10) of this bill to require the minister to have regard to the principle that people with disability are central to the NDIS. The amendments provide that people with disability should be included in a co-design capacity under subsection 4(9A) when making, respectively, a determination as to the method to work out an amount in a participant’s reasonable and necessary budget, and a legislative instrument to determine assessment requirements for a participant’s support needs.[219] The committee considers that specific consultation requirements beyond those in the Legislation Act 2003 can be appropriate, particularly where significant matters are included in delegated legislation.
2.157 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of providing for extensive rule-making powers in the National Disability Insurance Scheme Act 2013 that are exempt from sunsetting.
2.158 The committee draws this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.
2.159 Various amendments within the bill propose to expand the decisions that the Chief Executive Officer (CEO) can make.[221] In addition, subsection 202(1) of the NDIS Act provides that the CEO may, in writing, delegate to an agency officer any or all of their powers or functions under the Act, the regulations or the NDIS rules. The proposed introduction of new decisions that the CEO may or must make can therefore also be delegated to any Agency officer. An Agency officer means a member of staff of the National Disability Insurance Agency or a person assisting the Agency.[222]
2.160 It is unclear to the committee whether all of these decisions are subject to independent merits review. Items 100 to 102 of Schedule 1 seek to add some decisions to section 99 of the NDIS Act (which lists reviewable decisions and decision-makers). It is unclear whether all decisions of the CEO proposed to be introduced by the bill are subject to review and, if not, the justification for this.[223]
2.161 In Scrutiny Digest 6 of 2024 the committee requested the minister’s advice as to:
• why it is considered necessary and appropriate to expand the scope of the CEO’s powers, noting that these powers may be delegated to any Agency officer under subsection 202(1) of the NDIS Act;
• whether consideration had been given to whether the breadth of the delegation power should be legislatively constrained with respect to any of the new powers or functions and if not, why not;
• whether those exercising the delegated powers or functions will possess appropriate training, qualifications, skills, and experience; and
• whether independent merits review is available for decisions under proposed subsections 32F(6), 43(2A) and 73(3A), paragraph 74(4)(b) and subsection 74(4A) and, if not, whether an explanation can be provided of the characteristics of the decisions which justify the omission of merits review, by reference to the Administrative Review Council’s guidance document, What decisions should be subject to merit review?[224]
2.162 The minister advised that the bill does not expand the scope of the CEO’s powers but rather confers necessary and appropriate powers that ensure the operation and implementation of new measures included in the bill. The minister noted that the powers conferred are comparable to existing powers under the Act and, as such, are consistent with the CEO’s existing statutory responsibilities required for the operation of the NDIS.
2.163 In relation to whether consideration has been given to constraining the breadth of the delegation power with respect to the new powers or functions, the minister advised that the CEO’s powers introduced in the bill are administrative in nature and consistent with existing powers and functions under the Act. The minister stated that it is appropriate for the delegation structure to remain consistent with the structure already in operation.
2.164 The minister noted that there are over 650,000 participants in the NDIS, necessitating tens of thousands of decisions made every day by delegates of the CEO on matters such as access to the NDIS and supports in a participant’s plan. As such, the minister advised that restricting the delegation of the CEO’s decision-making powers would not be feasible for a scheme of such size and nature. The minister further advised that decisions are guided heavily by criteria and considerations set out in the NDIS Act, legislative instruments and policy guidance.
2.165 The minister further noted that decisions that require a particular level of training, qualification, skills or experience are managed by delegates with appropriate training in administrative decision-making in line with current operational practice and therefore there is no need to change the delegation structure in the NDIS Act.
2.166 In relation to the availability of independent merits review for particular decisions, the minister advised that under the existing planning framework, the only reviewable decision about the contents of a participant’s plan is the decision to approve the statement of participant supports under subsection 33(2). The minister advised that other considerations and decisions are not separate reviewable decisions but instead are considerations as part of a single reviewable decision to approve the participant’s statement of participant supports. The minister further advised that even if these could each be characterised as administrative decisions, they are all preliminary decisions that lead to the making of the substantive final decision, and are therefore not suitable for independent merits review consistent with the Administrative Review Council’s guide, What decision should be subject to merit review? The minister noted that all identified provisions are capable of being reviewed as part of a review of the final decision to approve the participant’s statement of participant supports.
2.167 The committee thanks the minister for this response.
2.168 The committee considers that the inclusion of new measures in the bill that provide for the CEO to make additional decisions is an expansion of the scope of the CEO’s powers. The committee does not consider the fact that the powers are comparable to existing powers and statutory responsibilities means that there is no expansion of power. As noted in Scrutiny Digest 6 of 2024, the committee’s concern lies in the breadth of the delegation power in light of the additional new measures introduced in the bill, and whether the broad delegation powers remain appropriate in light of this.[226]
2.169 The minister has advised that the CEO’s powers are administrative powers and therefore it is appropriate for the delegation structure to remain consistent with the existing structure in operation. However, the committee considers that administrative powers can and do impact upon individuals’ rights, liberties or obligations, and where there is a broad delegation of these powers the committee expects to see that these powers are appropriately constrained or exercised by individuals exercising appropriate training, qualifications, skills or experience. In this case, while the committee acknowledges the large scope of the NDIS and necessity to delegate powers and functions in order for the scheme to function, the committee considers it is still appropriate for those powers and functions to be appropriately limited to individuals possessing appropriate training, qualifications, skills or experience, and this can be set out within the NDIS Act itself rather than relying on non-legislative operational guidance.
2.170 In relation to the minister’s advice on the availability of independent merits review in respect of certain decisions, the committee welcomes the information provided that the kinds of decisions not subject to merits review are preliminary decisions or considerations that operate to inform the final decision which is subject to review.
2.171 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of providing for the Chief Executive Officer to delegate any or all of their powers or functions under the National Disability Insurance Scheme Act 2013, the regulations or the National Disability Insurance Scheme rules to any member of staff of the National Disability Insurance Agency or person assisting.
2.172 Item 114 of Schedule 1 to the bill seeks to amend subsection 209(2) of the NDIS Act to clarify the reference to the Legislation Act 2003. The effect of the provision remains the same, that the NDIS rules may make provision for or in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force from time to time. Item 36 also seeks to introduce subsections 32K(6) and 32L(11), and item 39 seeks to introduce subsection 33(2F), similarly to provide that determinations made under those sections may make provision for or in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.
2.173 The committee previously commented on subsection 209(2) of the NDIS Act in Alert Digest 1 of 2013.[228] The minister explained that reference material will be available either direct or via links on the Agency website, and where changes directly affect individuals, these individuals will be notified by letter or equivalent.[229] At that time, the committee requested that a general requirement to this effect be included in the bill.
2.174 In Scrutiny Digest 6 of 2024 the committee requested the minister’s further advice as to:
• whether it remains the case that reference material will be available and individuals directly affected by any changes will be notified by letter or equivalent;
• if so, whether an addendum to the explanatory memorandum containing this information can be tabled in the Parliament as soon as practicable; and
• whether the bill can be amended to include a requirement that any changes to reference material will be widely publicised and affected individuals will be directly notified.[230]
2.175 The minister advised that incorporating external materials as existing from time to time in legislative instruments is fundamental to the operation of the Act as this ensures that decisions under the NDIS Act are made on the basis of the most current document without requiring a new legislative instrument to be made, and will also capture any intergovernmental agreements that may be updated over time.
2.176 The minister provided the examples of the documents ‘NDIS Pricing Arrangements and Price Limits’ which is frequently updated as well as evidence-based assessment tools which may be relevant to proposed section 32L. The minister advised that any reference material incorporated will be clearly identified in the explanatory statement for the relevant instrument and available on the NDIA’s website in an accessible format, including any updated material.
2.177 The minister further advised that an addendum to the explanatory memorandum can be tabled including the advice provided on this matter before the bill is introduced in the Senate.
2.178 In relation to whether the bill can be amended to include a requirement that any changes to reference material will be widely publicised and affected individuals directly notified, the minister advised that it is a general and fundamental principle of the rule of the law that any member of the public should be able to readily and freely access the terms of the law and that the bill should be read as subject to this general operation. The minister advised that all incorporated documents will be readily and freely available to affected persons, and the public more generally, including on the NDIA’s website.
2.179 The committee thanks the minister for this response.
2.180 The committee welcomes the minister’s advice that any incorporated reference material will be readily and freely available on the NDIA’s website and welcomes the minister’s undertaking to include this information in an addendum to the explanatory memorandum to the bill.
2.181 In light of this response, the committee makes no further comment on this matter.
[212] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No. 1) Bill 2024, Scrutiny Digest 7 of 2024; [2024] AUSStaCSBSD 125.
[213] Schedule 1, item 123, proposed table item 42AC in section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iv) and (v).
[214] See, for example, Schedule 1, items 14 (subsections 10(b) and (c)), 25 (section 27), 28 (subsection 29(3)), 31 (subsection 30A(2), 36 (subsections 32B(1) and (3), paragraph 32D(4)(a), subparagraph 32D(6)(b)(ii), paragraph 32D(6)(f), subsection 32D(8), subsection 32E(4), paragraph 32F(7)(c), subsection 32G(4), paragraph 32H(2)(d), section 32J, subsection 32K(2), subsection 32L(8)), 39 (subsection 33(2E)), 59 (subsection 41(3)), 63 (subsection 43(2D)), 72 (subsection 44(3)), 73 (subsections 44(4) and (5)), 74 (subsection 45(6)), 78 (subparagraph 47A(1AB)(j)(iii)), 82 (subsection 47A(1B)), 83 (paragraph 47A(2A)(f)), 96 (paragraph 74(3C)(c)), 99 (subsection 74(6)). The committee further notes that some amendments have passed the House of Representatives on 5 June 2024 which further seek to expand the rule-making powers in the NDIS Act: see for example, items 5 and 8 to sheet SK113.
[215] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 26–28.
[216] The minister responded to the committee’s comments in a letter dated 30 May 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
[217] Senate Standing Committee for the Scrutiny of Delegated Legislation, Parliamentary scrutiny of delegated legislation (3 June 2019) p. 140.
[218] The committee further notes that if the term ‘co-design’ is considered by the minister to create such legal uncertainty, it is unclear why the inclusion of the term in subsection 4(9A) is considered by the minister to amount to an appropriate guiding principle and effective consultation in the NDIS Act.
[219] Items 5 and 8 to sheet PA110 passed the House of Representatives on 5 June 2024.
[220] Schedule 1, item 36, subsection 32F(6), subsections 32F(6), 43(2A), 73(3A) and paragraphs 74(4)(b) and subsection 74(4A). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(ii) and (iii).
[221] See, for example, Schedule 1, items 17 (paragraph 19(2)(b)), 22 (paragraph 25(1)(d)), 30 (subsection 30(5)), 31 (subsections 30A(1) and (7)), 36 (subsections 32D(2) and 32F(6)), 54 (paragraph 36(3)(b)), 63 (subsection 43(2A)), 69 (subsection 69(2AA)), 70 (paragraph 44(2A)(c)), 74 (subsection 45(5)), 78 (paragraphs 47A(1AB)(g), (h) and (j)), 83 (subsection 47A(2A)), 96 (subsection 74(3A)), 97 (paragraph 74(4)(b)) and 98 (paragraph 74(4A)(b)).
[222] National Disability Insurance Act 2013, section 9.
[223] For examples of provisions being unclear in respect to subjection to independent merits review see item 36, proposed subsection 32F(6); item 63, proposed subsection 43(2A); and items 96 to 98, subsection 73(3A), and paragraph 74(4)(b) subsection 74(4A) of the bill.
[224] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 29–31.
[225] The minister responded to the committee’s comments in a letter dated 30 May 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
[226] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 29–31.
[227] Schedule 1, item 114, subsection 209(2); item 36, subsection 36K(6) and 32L(11) and item 39, subsection 33(2F). The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(v).
[228] Senate Scrutiny of Bills Committee, Alert Digest 1 of 2013 (6 February 2013) pp. 65–66.
[229] Senate Scrutiny of Bills Committee, Fourth Report of 2013 (20 March 2013) pp. 130–131.
[230] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 31–32.
[231] The minister responded to the committee’s comments in a letter dated 30 May 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).
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