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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 establish the Net Zero Economy Authority (Authority) to
assist with the economic transformation to a net zero economy.
The Authority
seeks to do this by helping to facilitate the achievement of Australia’s
greenhouse gas emissions reduction targets
and by supporting Australia’s
regions and workers through the associated economic transformation.
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Portfolio
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Prime Minister and Cabinet
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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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2.182 Clause 20 of the bill provides that the minister may, by legislative instrument, give directions to the Board of the Net Zero Economy Authority (the Authority) about the Board’s performance of its functions or exercise of its powers, or the performance of the Authority’s functions or exercise of its powers. A note to the provision confirms that section 42 of the Legislation Act 2003 does not apply, which means that instruments made under clause 20 are exempt from disallowance.
2.183 In Scrutiny Digest 6 of 2024 the committee requested the minister’s advice as to:
• why it is considered necessary and appropriate for directions made under clause 20 not to be subject to disallowance;
• how the possibility of disallowance could be seen to be a ‘barrier to the Authority functioning effectively and efficiently’; and
• whether the bill could be amended to provide that these directions are subject to disallowance to ensure that they are subject to appropriate parliamentary oversight.[234]
2.184 The Assistant Minister to the Prime Minister (the assistant minister) advised that directions given by the minister to the Board of the Authority are administrative directions about the general policy focus and functions of the Authority. The possibility of disallowance would, the assistant minister advised, provide uncertainty about the policy environment for potential investors and government entities. The assistant minister further advised that the intention of clause 20 is to provide for consistency between the Authority’s actions and government policies, especially in relation to investments facilitated under proposed paragraph 16(1)(b) of the bill.
2.185 The assistant minister also noted that there are a range of accountability mechanisms in the bill to ensure transparency and accountability of these directions, including by providing for annual reports to be tabled in Parliament, and that directions under clause 20 are legislative instruments subject to registration on the Federal Register of Legislation.
2.186 Further, the assistant minister noted that similar powers are provided for in other legislation including section 57 of the Climate Change Authority Act 2011 and section 11 of the High Speed Rail Authority Act 2022.
2.187 The assistant minister concluded that the Government does not intend to amend the bill to provide that instruments made under clause 20 of the bill are subject to disallowance.
2.188 The committee thanks the assistant minister for this advice. However, while noting the information provided, the committee remains of the view that it would be more appropriate for directions issued under clause 20 to be subject to parliamentary disallowance, noting that they appear to contain policy directions as to the operation of the Authority.
2.189 Given the significant activities that are proposed to be undertaken by the Authority, the committee welcomes the fact that directions made under clause 20 are legislative instruments and are thus subject to some level of parliamentary oversight. However, the committee remains concerned that these instruments are exempt from parliamentary disallowance. The committee does not consider the fact that an instrument falls within one of the classes of exemption in the Legislation Act 2003 to be, of itself, a sufficient justification for excluding parliamentary disallowance.
2.190 The committee reiterates that disallowance is the primary means by which the Parliament exercises control over the legislative power that it has delegated to the executive and that exempting an instrument from disallowance therefore has significant implications for parliamentary scrutiny. The committee's concerns in this regard reflect the longstanding view of the Senate.
2.191 The committee does not consider that a desire to minimise barriers to the effective functioning of the Authority is a sufficient justification for exempting instruments made under clause 20 from disallowance.
2.192 In relation to the assistant minister’s advice that similar powers exist in other Commonwealth legislation, the committee notes that it raised scrutiny concerns in relation to section 11 of the High Speed Rail Authority Act 2022 in Scrutiny Digest 5 of 2022 and Scrutiny Digest 6 of 2022.[236]In that instance the committee concluded that it was inappropriate for ministerial directions made under clause 11 of that bill to be exempt from disallowance. The committee notes that a similar justification has been provided in relation to the current bill.
2.193 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of exempting ministerial directions made under clause 20 from disallowance.
2.194 Subclause 68(3) provides that the CEO of the Authority must conduct, or cause to be conducted, a review into the operation of Part 5 of the bill, including consideration of whether any amendments to that Part are desirable. Subclauses 68(5) and (6) provide for the giving of reports of these reviews to the minister. Similarly, paragraph 72(1)(a) provides that the minister may request that the CEO of the Authority provide to the minister a report or advice on a matter relating to the CEO’s or the Authority’s functions, powers or duties. There is no requirement that the reports or advice provided under these provisions be subsequently tabled in the Parliament.
2.195 In addition, subclause 75(1) provides that the minister may publish reports, documents or information given to the minister or the Finance Minister under paragraph 19(1)(b) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Subclause 75(2) provides that the minister must omit from the published report, document or information any information that the Board is satisfied is commercial‑in‑confidence.[238] Subclause 75(4) provides that the minister must also omit any national security or sensitive financial intelligence information.
2.196 In Scrutiny Digest 6 of 2024 the committee requested the minister’s advice as to whether the following provisions of the bill can be amended to require the tabling of the relevant reports in both Houses of the Parliament:
• clause 68, concerning reports of reviews of Part 5 of the bill;
• clause 72, concerning any reports requested by the Minister concerning the functions, powers or duties of the Net Zero Economy Authority or the CEO of the Authority; and
• clause 75, concerning reports given to the minister or the Finance Minister under paragraph 19(1)(b) of the PGPA Act.[239]
2.197 The assistant minister advised, in relation to clause 68, that the Government will consider the matters raised by the committee noting that reports made under clause 68 are likely to be of ‘significant interest’ to stakeholders.
2.198 Regarding clause 72, the assistant minister advised that the clause would provide the minister with the ability to request a broad range of advice on any matter relating to the CEO, board or Authority’s functions, powers or duties. The assistant minister further advised that requiring the tabling of reports in both Houses of the Parliament would result in a significant amount of administrative advice having to be tabled which may be overly burdensome. Further, the assistant minister noted that clause 75 allows the minister to publish reports or information on the internet, and provides flexibility to table reports or advice in Parliament when appropriate.
2.199 The committee thanks the assistant minister for this advice, and notes the undertaking to consider the committee’s position that clause 68 of the bill be amended to provide for reports made under the clause to be tabled in the Parliament.
2.200 The committee further notes the advice that the level of administrative detail to be provided under clause 72 would mean that tabling reports in the Parliament may be overly burdensome on the Government and the Parliament, and that information provided under clause 75 will be available online.
2.201 In light of the above the committee makes no further comment in relation to this matter.
[232] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Net Zero Economy Authority Bill 2024, Scrutiny Digest 7 of 2024; [2024] AUSStaCSBSD 126.
[233] Clause 20. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iv).
[234] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 33–35.
[235] 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).
[236] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 5 of 2022 (28 September 2022) pp. 28–30; Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 6 of 2022 (26 October 2022) pp. 83–85.
[237] Subclauses 68(5), 68(6) and 75(1) and paragraph 72(1)(a). The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(v).
[238] The definition of ‘commercial-in-confidence’ for the purposes of this subsection is set out in subsection 75(3).
[239] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2024 (15 May 2024) pp. 35–36.
[240] 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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URL: http://www.austlii.edu.au/au/other/AUSStaCSBSD/2024/126.html