Australian Research Council Amendment (Review Response) Bill 2023 - Initial Scrutiny [2024] AUSStaCSBSD 3 (18 January 2024)

• Australian Research Council Amendment (Review Response) Bill 202332
• Broad discretionary powers
• Availability of merits review33

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Australian Research Council Amendment (Review Response) Bill 2023^[32]

Purpose	The Australian Research Council Amendment (Review Response) Bill 2023 (the bill) amends the Australian Research Council Act 2001 (ARC Act) to enhance the Australian Research Council’s (ARC) role to better support Australia’s dynamic research landscape. The amendments in the bill are in response to the Final Report of the Trusting Australia’s Ability: Review of the Australian Research Council Act 2001 (Review).
Portfolio	Education
Introduced	House of Representatives on 29 November 2023
Bill status	Before the House of Representatives.

Broad discretionary powers
Availability of merits review^[33]

1.40 Item 6 of Schedule 3 introduces proposed subsection 50(1) into the Australian Research Council Act 2001, which provides that the Chief Executive Officer (CEO) of the Australian Research Council may terminate or vary a funding agreement if the CEO is satisfied that the organisation that is a party to the agreement has breached a term or condition of the agreement.^[34] Proposed subsection 50(2) provides that the CEO may vary the funding agreement in any other circumstances.^[35]

1.41 Similarly, proposed subsections 50(4) and 50(5) provide that the Australian Research Council Board (the board) or the minister may terminate or vary a funding approval in relation to an organisation if: the CEO gives the board or the minister notice of a term or condition of the funding agreement that relates to the funding approval; and if the board or the minister is satisfied that the organisation has breached the term or condition. Under proposed subsections 47(5) and 48(4), the board and CEO respectively have general powers to vary a funding approval.^[36]

1.42 The committee expects that the inclusion of broad discretionary powers be justified in the explanatory memorandum and that guidance be provided as to the exercise of such powers. In this instance, the explanatory memorandum only provides a description of the provisions in relation to the board and the minister, such as:

New subsection 47(5) provides that the Board may, in writing, vary an approval under subsection 47(1).

[...]

New subsection 48(4) provides that the Minister may, in writing, vary an approval under subsection 48(1).

[...]

New subsection 50(1) provides that, if the CEO is satisfied that the organisation that is a party to a funding agreement has breached a term or condition of the funding agreement, the CEO may, on behalf of the Commonwealth:

• at paragraph (a), terminate the funding agreement; or

• at paragraph (b), vary the funding agreement. For example, the CEO may vary the terms and conditions relating to the periods in which payments of financial assistance are made to an organisation.^[37]

1.43 It is unclear when the board or minister are able to vary funding approvals and in what ways they are able to vary funding approvals. It appears that only the CEO is constrained by the requirement to be satisfied of a breach of a condition of the funding agreement, but may vary a funding agreement even in other circumstances. Further, there is no guidance provided as to what would satisfy the CEO that a breach of a condition of a funding agreement has occurred. The committee considers that some guidance as to the CEO, board and the minister’s powers to terminate and vary funding agreements and approvals would be of assistance in constraining how their discretionary powers may be exercised.

1.44 The committee’s concerns are heightened in this instance in the absence of a provision that allows for merits review of a decision to vary a condition of or terminate a funding agreement. The committee considers that, generally, administrative decisions that will, or are likely to, affect the interests of a person should be subject to independent merits review unless a sound justification is provided by reference to the Administrative Review Council's guidance document, What decisions should be subject to merits review?^[38]

1.45 The committee understands that in this instance, a variation or a termination of a funding agreement is likely to affect funding that is provided to an organisation for the purpose of research, which may have detrimental consequences for the organisation. The committee queries the exclusion of a right to independent merits review in this instance and whether affected parties will be provided an opportunity to present their case prior to contract variation or termination.

1.46 In light of the above, the committee requests the minister's advice as to:

• why it is necessary and appropriate to provide the minister and the board with a broad power to vary funding approvals under proposed subsections 47(5) and 48(4);

• why it is necessary and appropriate to provide the CEO with a broad power to vary funding agreements under proposed subsection 50(2);

• whether guidance can be provided as to how the CEO must be satisfied that a breach of a condition of the funding agreement has occurred under proposed subsections 50(1);

• whether independent merits review will be available in relation to a decision made under proposed subsection 50(1), 50(4) or 50(5) of the bill or if not, why not; and

• why it is necessary and appropriate to exclude independent merits review of a decision made under proposed subsection 50(1), 50(4) or 50(5) of the bill, with reference to the Administrative Review Council's guidance document, What decisions should be subject to merits review?

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^[32] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Australian Research Council Amendment (Review Response) Bill 2023, Scrutiny Digest 1 of 2024; [2024] AUSStaCSBSD 3.

^[33] Schedule 3, item 6, proposed subsections 50(1), 50(2), 50(4) and 50(5). The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(ii) and 24(1)(a)(iii).

^[34] Proposed subsection 50(1).

^[35] Proposed subsection 50(2).

^[36] Proposed subsections 47(5) and 48(4).

^[37] Explanatory memorandum, pp. 29, 32, 34.

^[38] Administrative Review Council, What Decisions Should be Subject to Merits Review? (1999) What decisions should be subject to merit review? 1999 | Attorney-General's Department (ag.gov.au).