Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Bill 2024 - Commentary on Ministerial Responses [2024] AUSStaCSBSD 128 (26 June 2024)

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Purpose	The bill seeks to amend the Therapeutic Goods Act 1989 (the TG Act) to prohibit the importation, domestic manufacture, supply, commercial possession and advertisement of non-therapeutic and disposable vaping goods. Therapeutic vaping goods will continue to be available and subject to regulation under the TG Act in line with other medicines and therapeutic goods.
Portfolio	Health and Aged Care
Introduced	House of Representatives on 21 March 2024
Bill status	Before the Senate

Reversal of the evidential burden of proof
Strict liability offences
Significant matters in delegated legislation^[250]

2.220 Schedule 1 to the bill inserts multiple new offence provisions into the Therapeutic Goods Act 1989 (the TG Act).

2.221 Item 6 of Schedule 1 to the bill amends the definitions in subsection 3(1) of the TG Act to provide that the quantity of a kind of vaping goods that will be a ‘commercial quantity’ will be the amount set out in regulations. In addition, item 10 of Schedule 1 to the bill amends the definitions in subsection 3(1) of the TG Act to provide that the meaning of a ‘unit’ of vaping goods will have the meaning to be prescribed by the regulations.

2.222 This has the effect of altering significant components of the offence within delegated legislation rather than primary legislation. Additionally, most if not all new offences are introduced alongside offence-specific defences which reverse the evidential burden of proof. Other new offence clauses in the bill, relating to matters of manufacturing and possession of vaping goods, broadly follow the same framework.^[251]

2.223 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to why it is necessary and appropriate for the definition of a ‘unit’ of vaping goods (in item 10 of Schedule 1) or the quantity of a kind of vaping goods that would amount to a commercial quantity (item 6 of Schedule 1) to be left to delegated legislation, noting the importance of these definitions to the offence provisions proposed to be inserted by the bill.^[252]

2.224 In Scrutiny Digest 6 of 2024, the Minister for Health and Aged Care (the minister) provided an extensive response to the committee’s concerns, including by advising that the definition of a ‘unit’ of vaping goods only applied in relation to the civil penalty provisions of the bill, with the definition needing to be ‘flexible and adaptable’ to meet changing public health, technological and market circumstances.^[253]

2.225 As such, in Scrutiny Digest 6 of 2024 the committee requested that an addendum to the explanatory memorandum to the bill containing the key information provided by the minister in relation to the prescription of the definition of a ‘unit’ or ‘commercial quantity’ of vaping goods in delegated legislation be tabled in the Parliament as soon as practicable.^[254] The committee also drew the matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation, and to the attention of senators.^[255]

Minister for Health and Aged Care’s response^[256]

2.226 The minister advised they will include the additional information on the prescription of a unit and commercial quantity of vaping goods, as well as the delegation of powers and functions to state and territory officers, in an addendum to the explanatory memorandum to be tabled in Parliament as soon as practicable.

Committee comment

2.227 The committee welcomes the minister’s undertaking to prepare an addendum to the explanatory memorandum relating to the bill.

Broad discretionary powers^[257]

2.229 Item 11 of Schedule 1 to the bill would insert proposed section 41RC into the TG Act. Proposed subsection 41RC(1) would empower the secretary to give consent to applications to manufacture, supply or possess vaping goods. Proposed subsection 41RC(2) empowers the secretary to grant an application subject to conditions.

2.230 However, there is no guidance on the face of the bill, nor in the explanatory memorandum, as to what criteria may be considered by the secretary when deciding whether to grant or refuse such an application, or in deciding which conditions to impose, if any. These concerns are heightened noting the relevance of consent granted under proposed subsection 41RC(1) to the offence provisions of the bill.

2.231 In Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to:

2.232 In Scrutiny Digest 6 of 2024^[259] the minister advised the committee that the broad discretionary power provided to the minister in the consent scheme is necessary and appropriate to ensure all legitimate participants in the scheme along the supply chain have clear lawful authority, including in cases where relevant actors do not have ‘a pre-existing license, approval, authority or permit under the Customs Act 1901, TG Act or a state or territory law’.

2.233 The minister further advised that the bill identifies multiple situations where persons involved in the importation, manufacture, supply and commercial possession of vaping goods will have clear lawful authority to do so. The consent scheme is designed to cover other situations, and the broad discretionary power is necessary to deal with such gaps. The minister stated that without a broad discretionary power, a cohort of potential legitimate actors may be inadvertently left without a mechanism to legitimise their relationship with the vaping scheme, and would otherwise expose such persons to regulatory action.

2.234 The minister explained that where a decision not to grant a person consent is made, or a person disagrees with conditions imposed, internal and external merits review and judicial review will be available.

2.235 In relation to the criteria for granting approval the minister advised that these will be set out in a policy document and would be consistent with the objects of the TG Act. The minister provided further detail in relation to the criteria including:

2.236 In response the committee commented that it remained unclear why important detail regarding the determination of applications was being left to policy guidance rather than set out on the face of the bill. The committee stated its view that, at a minimum, basic criteria in relation to resourcing, technical skills, ability to meet safety requirements, and good character tests could be set out on the face of the bill while preserving the ability for further criteria to be set out in delegated legislation.

2.237 As such, the committee requested the minister’s advice as to the consideration of moving amendments to the bill to provide for appropriate legislative guidance relating to the granting of consent under proposed subsection 41RC(1), including criteria on resourcing, technical skills, ability to meet safety requirements, and character requirements.

2.238 Alternatively, the committee sought the minister’s advice as to whether consideration could be given to any other mechanisms by which additional parliamentary scrutiny could be provided in relation to the consent scheme, for instance by providing for relevant factors to be considered in the exercise of the discretion to be set out in delegated legislation.^[260]

Minister for Health and Aged Care’s response^[261]

2.239 In response to the committee’s concerns regarding the broad discretionary powers in proposed section 41RC of the bill, the minister stated they are agreeable to facilitating amendments to the bill that would require the secretary to have regard to specific criteria determined by the minister in a legislative instrument when granting consents. The minister advised that amendments would be moved in the Senate.

Committee comment

2.240 The committee welcomes the minister’s undertaking to propose amendments to the bill that would require the secretary to have regard to specific criteria determined by the minister in a legislative instrument when granting consents.

Enforcement notices
Availability of independent merits review^[262]

2.242 Item 51 of Schedule 1 to the bill would insert proposed section 42YT into the TG Act, which would enable the secretary to issue enforceable directions under the TG Act or an instrument made under the TG Act. Proposed subsection 42YT(1) provides that the section applies if the secretary believes, on reasonable grounds, that a person is not complying with the TG Act or TG Act instrument in relation to particular goods, and it is necessary to exercise powers under this section to protect the health and safety of humans. Proposed subsection 42YT(2) provides that the secretary can issue directions to the person requiring the person to take a specified measure, within a specified period and at the person’s own cost, including, for example, to relabel, or label, the goods in compliance with the TG Act or TG Act instrument (paragraph (a)), or repackage the goods in compliance with the TG Act or TG Act instrument (paragraph (b)).

2.243 Proposed subsection 42YT(4) would provide that it is an offence to fail to comply with a notice given under proposed subsection 42YT(2), with a penalty of up to 12 months imprisonment or 1000 penalty units, or both.

2.244 As such, in Scrutiny Digest 5 of 2024 the committee requested the minister’s advice as to the criteria that will be considered by the secretary when determining whether they believe on reasonable grounds that a person is not complying with the TG Act or its instruments, and whether proposed independent merits review is available for directions issued under proposed subsection 42YT(2) of the bill, and if not, why not.^[263]

2.245 In Scrutiny Digest 6 of 2024 the minister wrote to the committee pointing to the common law definition of ‘reasonable grounds’ to advise that ‘a decision maker will need to point to facts (such as information or documents) which are sufficient to induce in the mind of a reasonable person that the person is in contravention of the elements of the relevant provision’. Next, the decision maker will turn their mind to whether the exercise of powers under proposed subsection 42YT(2) is necessary to protect human health and safety, which the minister advises requires a proportionality assessment of the alternative measures available. The minister also referred to the existing powers to issue infringement notices under section 42YT of the TG Act which have no legislated criteria for consideration.

2.246 In relation to merits review the minister advised that independent merits review is not available for the decision to issue an enforceable notice to ensure that timely enforcement action can be taken to deal with alleged unlawful goods. The minister noted that this approach is appropriate to ensure there is a balance between the protection of health and safety and a right to review of administrative decisions.

2.247 The minister further advised that procedural fairness requirements will apply and provide for a check on the use of this power, including an opportunity for the directed person to make submissions, comment on any adverse information provided for, and propose alternative methods to ameliorate the concerns.

2.248 The minister also noted that judicial review is available to a person affected by a decision.

2.249 The committee responded to the minister’s advice by stating its view that the application of the criteria for making a decision in relation to proposed subsection 42YT(2) is necessarily discretionary. The committee’s preferred position is that independent merits review is provided for any rights-affecting decisions of a discretionary nature.

2.250 While the committee acknowledged the minister’s explanation for the counterbalancing need for the protections of health and safety and procedural fairness requirements as well as the constraints placed upon the secretary in the making of an enforceable direction, the committee noted that the decision to make an enforceable direction involved a final or operative determination of substantive rights. The committee concluded that, as such, it was of the view that a decision of this nature would ordinarily be subject to independent merits review.

2.251 The committee made further note that, as stated in the Administrative Review Council’s guidelines, What decisions should be subject to merit review?, the availability of judicial review is not ordinarily a reason to exclude merits review, noting that judicial review is complementary to, but distinct from, merits view.

2.252 As such, in Scrutiny Digest 6 of 2024, the committee requested the minister’s further advice as to the justification for exclusion from merits review of decisions made under proposed subsection 42YT(2) of the TG Act with reference to principles set out in the Administrative Review Council’s guidelines.^[264]

Minister for Health and Aged Care’s response^[265]

2.253 The minister advised that proposed section 42YT is not confined to vaping goods and applies to therapeutic goods generally. The minister drew parallels between the proposed power to similar circumstances outlined in the Agricultural and Veterinary Chemicals Code Act 1994 and the Great Barrier Reef Marine Park Act 1975,^[266] which provide for enforceable directions without independent merits review.

2.254 The minister advised that consideration of the committee’s comments has led to the decision to progress amendments to the bill to provide that decisions made under proposed section 42YT will be subject to internal merits review and external merits review by the Administrative Appeals Tribunal.

Committee comment

2.255 The committee welcomes the minister’s undertaking to propose amendments to the bill with the effect of providing for internal and external merits review of decisions made under proposed section 42YT.

^[249] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Bill 2024, Scrutiny Digest 7 of 2024; [2024] AUSStaCSBSD 128.

^[250] A range of clauses in Schedule 1 to the bill. The committee draws senators’ attention to these provisions pursuant to Senate standing order 24(1)(a)(i) and (iv).

^[251] For example, item 11 would insert proposed section 41Q into the TG Act which would create a new criminal offence, an additional offence of strict liability, and a new civil offence, in relation to the importation of vaping goods into Australia. Proposed subsection 41Q(4) would provide that a person who contravenes the civil offence provision in proposed subsection 41Q(3) would commit a separate contravention in respect of each unit of vaping goods imported by the person into Australia. In addition, proposed section 41QC provides for a range of offences of possession where the person possesses differing amounts exceeding the commercial quantity of vaping products, with higher penalties for the larger amounts.

^[256] The minister responded to the committee’s comments in a letter dated 4 June 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 7 of 2024).

^[257] Schedule 1, item 11, proposed section 41RC. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(ii).

^[261] The minister responded to the committee’s comments in a letter dated 4 June 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).

^[262] Schedule 1, item 51, proposed section 42YT. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i) and (iii).

^[265] The minister responded to the committee’s comments in a letter dated 4 June 2024. A copy of the letter is available on the committee’s webpage (see correspondence relating to Scrutiny Digest 6 of 2024).

Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests