Australian Jobs (Australian Industry Participation) Rule 2014 [F2014L00125]-Continuing matters [2014] AUSStaCSDLM 142 (16 July 2014)

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Purpose	This instrument provides for exceptions under the Australian Jobs Act 2013, information required for compliance and notification, and further functions for the Australian Industry Participation Authority
Last day to disallow^[1]	13 May 2014
Authorising legislation	Australian Jobs Act 2013
Department	Industry

[The committee first reported on this instrument in Monitor No. 2 of 2014, and subsequently in Monitor Nos 5 and 6 of 2014. The committee raised concerns and sought further information in relation to the prescribing of matters by legislative rules].

The committee notes that this instrument relies on section 128 of the Australian Jobs Act 2013, which allows for various matters in relation to that Act to be prescribed, by the minister, by 'legislative rules'. While the explanatory statement (ES) for the instrument does not address the issue, as far as the committee can ascertain this is a novel approach to the prescribing of matters in Commonwealth legislation, insofar as Acts usually provide for matters to be prescribed, by the Governor-General, by 'regulation'. The committee notes that the latter approach to prescribing matters is consistent with the definition in section 2B of the Acts Interpretation Act 1901, which provides that, in any Act, 'prescribed' means 'prescribed by the Act or by regulations under the Act'. This being so, the committee is uncertain as to whether the prescription of matters by 'legislative rules' is also consistent with the Acts Interpretation Act 1901.

More generally, the committee notes that the making of regulations is subject to the drafting and approval requirements attached to the Office of Parliamentary Counsel (OPC) and Executive Council, respectively. To the extent that these requirements may be taken as an additional layer of scrutiny in the prescribing of matters by regulation, it is not clear whether these requirements will also apply to legislative rules and, if not, what the ramifications may be for both the quality of, and level of scrutiny applied to, such instruments [the committee requested further information from the minister (Monitor No. 2 of 2014)].

In relation to the issue of whether the prescribing of matters by legislative rules is novel, First Parliamentary Counsel (FPC) provided a number of examples of legislation allowing matters to be prescribed other than by regulation as the basis for his apparent view that the approach taken in section 128 of the Australian Jobs Act 2013 is 'longstanding'.

[The committee thanked the minister for his response and made the following comments (Monitor No. 5 of 2014)].

However, the committee noted that its inquiry regarding the prescribing of matters by 'legislative rules' in the instrument goes firstly to the specific form of the power, as opposed to the more general provision in Acts for the 'making of instruments rather than regulations'. That is, the regulation-making power is commonly provided as a broad power to make regulations required or permitted by the authorising Act, or necessary or convenient for carrying out or giving effect to the Act. For example, section 62 of the Legislative Instruments Act 2003 provides:

In the committee's view, the broadly-construed regulation-making power may be contrasted with the usually more specific or constrained provisions allowing for the making of other types of instruments. However, in the present case, section 128 of the Australian Jobs Act 2013 provides:

Further, the Australian Jobs Act 2013 does not contain a regulation-making power. The committee notes that the broadly-expressed power to make legislative rules in the Australian Jobs Act 2013 therefore effectively replaces the regulation-making power.

With this context, the committee notes that many of the examples referred to by FPC appear to be distinguishable from this broad power to make legislative rules in the absence of a regulation-making power. A number of these may be distinguished on the basis that:

• the relevant instrument-making power is not expressed in as broad a manner in which the legislative-rule making power is expressed in the present case (for example, they are limited to matters 'required or permitted' by the Act, but not to things 'necessary or convenient');

• the rule-making power is complemented by the inclusion of a broadly defined regulation-making power expressed in the usual terms; and

• the rule-making power is constrained by being permitted only in relation to specific parts or subdivisions of the relevant Act (or to specific items).

However, with the exception of the Income Tax Assessment Act 1997, the committee notes that seven of the remaining eight examples listed in paragraph 12 provide analogous powers to the legislative rule-making power in the Australian Jobs Act 2013. That is, the following Acts provide for a broad rule-making power that appears to take the place of a general power to make regulations:

The committee notes that these Acts are all dated 2013 and, according to FPC's advice, were drafted 'since the transfer of the subordinate legislation drafting function to the Office of Parliamentary Counsel in 2012'.

In light of the above, the committee considers that FPC's advice tends to confirm the view that the provision for a broadly-expressed power to make legislative rules in place of the regulation-making power is a novel approach, employed in the drafting of Acts only since 2013. Further, the committee notes that on 6 March 2014 (subsequent to the committee's initial comments on this matter), OPC circulated revised Drafting Direction No. 3.8, which included the addition of extensive instruction on the use of 'general instrument-making powers' of this kind. The committee notes that Drafting Direction No. 3.8 appears to confirm the inclusion of such powers in delegated legislation as a novel approach. It states:

With the exception of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the committee is not aware of any reference to the inclusion of a general rule-making power in place of the regulation-making power in the explanatory memorandums (EMs) for these Acts. The EM for the PGPA Act stated (p. 58):

In the committee's view, the EMs for these Acts did not provide a sufficient opportunity for the Parliament to identify and consider the potential consequences of the introduction of a general rule-making power in place of the regulation-making power. The committee's current inquiries seek to provide that opportunity.

While the committee acknowledges that agencies must seek to best use often limited resources, the committee considers that what appears to be a potentially significant change or addition to the use of the general regulation-making power should not be effected solely through agency policy.

The committee notes that the broader thrust of its comments on the prescribing of matters by the general instrument-making power relate to the ramifications of this approach for the quality and level of executive and Parliamentary scrutiny applied to such instruments.

FPC's advice notes that instruments made under the general instrument-making making power may now be drafted by agencies (unlike regulations, which are required to be drafted by OPC). OPC may, however, draft or assist agencies 'within the limits of available resources'. In the committee's experience, regulations are characterised by the highest drafting standards, and it seems unlikely that agencies are equipped to achieve the same standards in the drafting of instruments under the general instrument-making power. In particular, the committee notes that regulations may be lengthy and complex, covering a range of matters as permitted by the general power on which they are based. Given this, the Parliament's ability to scrutinise instruments that are of a similar character, but not drafted, and subject to only limited oversight, by OPC, may be adversely affected where the highest standards are not maintained.

[The committee requested the minister's advice on the matters outlined above, and on the particular questions set out below:

• Regarding FPC's advice that 'some types of provisions should be included in regulations and be drafted by OPC [without] strong justification for prescribing those provisions in another type of legislative instrument', in the event that such provisions are required for the Acts listed on page 3 above, how will the required measures be introduced in the absence of a regulation-making power?

• Will the drafting of complex and lengthy instruments by departments and agencies based on the general instrument-making power achieve the same levels of quality and accuracy as achieved by OPC in its drafting of regulations?

• What is the minister's understanding of the fundamental or original reason for requiring regulations to be drafted by OPC and made by the Governor-General? Do such requirements ensure higher standards in such instruments by mandating greater executive responsibility and scrutiny?]

Minister's concerns

In addition, the minister prefaced FPC's advice by noting that 'the committee's queries do not relate to the substance of the rule itself, but rather to the underlying power authorising the making of the instrument'. The minister also expressed his concern that the rule:

The minister requested that the committee give consideration to the offer of a meeting with FPC to facilitate resolution of this matter, noting that the committee's concerns 'relate to the appropriateness of the provision in the Act that creates a general rule-making power, which is an issue that cannot be resolved in the context of scrutiny of this rule'.

[The committee thanked the minister for his response and agreed to a meeting to discuss the committee's concerns; and made the following comments (Monitor No. 6 of 2014)].

The committee notes that the content of any such meeting will form part of the committee's public scrutiny of the instrument, and be included in subsequent reports on this matter (in addition to further written responses to the committee's comments below).

In relation to the minister's view that the matters in question 'cannot be resolved in the context of scrutiny of this rule', the committee notes that the question of whether the Parliament regards the new general rule-making power as appropriate to the exercise of the Parliament's delegated legislative powers goes fundamentally to the committee's institutional role and the principles which inform its operation.

The delegation of the Parliament's legislative power to executive government involves a 'considerable violation of the principle of separation of powers, the principle that laws should be made by the elected representatives of the people in Parliament and not by the executive government'.^[2] This principle is effectively preserved through the committee's work scrutinising delegated legislation, and the power of the Parliament to disallow delegated legislation.

In accordance with this critical role, the committee's scrutiny principles are 'interpreted broadly to include every possible deficiency in delegated legislation affecting parliamentary propriety and personal rights'.^[3]

It follows from this understanding of the committee's role, and the powers and procedures through which it operates, that the committee could make no practical distinction between the substance and form of the rules if it were to conclude that the general rule-making power did not accord with the committee's scrutiny principles, in relation to the proper exercise and oversight of the Parliament's delegated powers by the executive.

More generally, the committee notes that, notwithstanding its concerns in relation to the current instrument, recent bills for proposed Acts continue to make provision for a general-rule making power. The management of risk attendant on use of the general rule-making power while the committee's concerns remain unresolved is a consideration falling outside the scope of the committee's scrutiny functions.

The committee notes FPC's acknowledgement that the use of a general rule-making power to displace the use of the general regulation-making power is a 'development' in longstanding practice, a view which supports the committee's initial characterisation of the approach as 'novel' (since 2013). The mis-characterisation of the approach taken in section 128 of the Australian Jobs Act 2013 as 'longstanding' provided no basis for a response to the concerns raised by the committee. The committee hopes that clarity as to the nature of the change will facilitate a full appreciation of the committee's concerns.

4 Before turning to the particular questions raised by the Committee, it may be helpful to deal with some general issues.

5 The Parliamentary Counsel Act 1970 gives OPC a broad range of functions in relation to the drafting and publishing of legislation. Since the transfer of functions of the former Office of Legislative Drafting and Publishing (OLDP) to OPC in October 2012, these functions have included the drafting of subordinate legislation. Subordinate legislation is broadly defined in the Act and includes all legislative instruments.

6 The fact that an activity is within the functions of OPC does not itself exclude other persons or bodies from engaging in the activity. However, the Legal Services Directions 2005 made under section 55ZF of the Judiciary Act 1903 provide for the extent to which other persons or bodies may engage in drafting work.

7 The Legal Services Directions provide that certain drafting work is tied so that only OPC is to undertake the work (or arrange for it to be undertaken). This work consists of the drafting of government Bills, government amendments of Bills, regulations, Ordinances and regulations of non-self-governing Territories, and other legislative instruments made or approved by the Governor-General.

8 The explanatory statement for the Legal Services Directions provides the following general policy background to the Directions:

9 In relation to the provision of the Directions providing for tied work, the explanatory statement provides the following explanation:

10 Outside these tied areas of legal work the Directions give agencies the responsibility of managing the risks involved in their legal work and, in the case of their drafting work, the freedom to choose whether their legislative instruments will be drafted in-house or will be drafted by OPC or another legal services provider.

11 The drafting of legislative instruments to be made or approved by the Governor-General is an important function of OPC. However, even a cursory examination of the Select Legislative Instruments series (in which most of these instruments are published) makes it clear that many provisions of legislative instruments presently made by the Governor-General do not have particular sensitivities, or create particular risks for the Commonwealth, such that it could be said that it is appropriate that their drafting should be subject to centralised legal service provision and thus tied to OPC. The reason that the drafting of these instruments is tied to OPC under the Legal Services Directions is that they are made or approved by the Governor-General and not by another rule-maker, rather than because of their content.

12 Under section 61 of the Constitution the Governor-General exercises the executive power of the Commonwealth. It seems reasonable that the drafting of legislative instruments to be made or approved by the Governor-General is ''otherwise so bound to the work of the executive" that it should be subject to centralised legal service provision and thus tied to OPC. The special constitutional status of the Governor-General as a rule-maker of legislative instruments is recognised in the Legislative Instruments Act 2003 (see paragraph 4(3)(a)).

13 Drafting Direction No.3.8—subordinate legislation (DD3.8) sets out OPC's approach to instrument-making powers, including the cases in which it is appropriate to use legislative instruments (as distinct from regulations). The development of DD3.8 involved consideration of the following matters.

14 Under section 16 of the Legislative Instruments Act 2003, I have a responsibility to take steps to promote the legal effectiveness, clarity, and intelligibility to anticipated users of legislative instruments.

15 I am also required to manage the affairs of OPC in a way that promotes proper use of the Commonwealth resources that OPC is allocated (see section 44 of the Financial Management and Accountability Act 1997), including resources allocated for the drafting of subordinate legislation.

16 I consider that DD3.8 is an appropriate response to these responsibilities in relation to the drafting of Commonwealth subordinate legislation.

17 In 2012 and 2013, Federal Executive Council (ExCo) legislative instruments drafted by OPC (or OLDP before the transfer of functions to OPC in 2012) made up approximately 14% of all instruments registered on the Federal Register of Legislative Instruments (FRLI) and 25% to 30% of the number of pages of instruments registered. In addition, in 2013 OPC drafted approximately 4% of all non-ExCo legislative instruments registered and 13% of the number of pages of non-ExCo legislative instruments registered. This meant that in 2013 OPC drafted approximately 35% of all the pages of legislative instruments registered on FRLI.

18 As mentioned in my previous letter, OPC does not have the resources to draft all Commonwealth subordinate legislation, nor is it appropriate for it to do so.

19 The question of the centralisation of drafting of all Commonwealth subordinate legislation was considered by the Administrative Review Council in its 1992 report "Rule Making by Commonwealth Agencies". The Council stated that:

21 It is correct that departments and agencies have a choice under the Legal Services Directions to draft untied instruments in-house or to engage OPC or another legal service provider to draft them. This is consistent with departments and agencies managing their risks, including in relation to the drafting of their legislative instruments, except in areas where for policy reasons it is appropriate to tie the work to OPC. OPC has no difficulty with having to compete for untied instrument drafting work in accordance with the Legal Services Directions and the Competitive Neutrality Principles.

22 My view is that OPC should use its limited resources to draft the subordinate legislation that will have the most significant impacts on the community. This would comprise the narrower band of regulations as specified in DD3.8, which only OPC could draft and which would also receive the highest level of executive scrutiny because of the special nature of the matters dealt with, as well as a range of other more significant instruments. The narrowing of the band of regulations will mean that OPC resources do not have to be committed to drafting instruments dealing with matters that have in the past often been included in regulations but that are of no great significance. Drafting resources will therefore be freed up to work on other more significant instruments, or to assist agencies to draft them.

23 OPC has a strong reputation among Commonwealth Departments and agencies, and I strongly believe that they will recognise the benefits of having significant instruments drafted by OPC and will direct a greater proportion of this work to OPC, or will at least seek OPC's assistance. OPC will also actively seek more of this work. Because this work is billable, OPC will be in a better position to increase its overall drafting resources and to take further steps to raise the standard of instruments that it does not draft. All this will contribute to raise the standard of legislative instruments overall.

24 Before the issue of DD3.8, the division of material between regulations and other legislative instruments seems largely to have been decided without consideration of the nature of the material itself. This has resulted in the inclusion of inappropriate material in regulations and the inclusion of material that should have been professionally drafted in other instruments. This in turn has meant that the resources of OPC and the Federal Executive Council have been taken up with matters that are presently inappropriately included in regulations, while more significant matters have been drafted in other instruments outside of OPC.

25 DD3.8 addresses this matter by outlining the material that should (in the absence of a strong justification to the contrary) be included in regulations and so be drafted by OPC and considered by the Federal Executive Council. I would welcome any views that the Committee may have on the appropriate division of material between regulations and other legislative instruments and would be happy to review DD3.8 to take account of any views the Committee may have.

26 As long ago as 1992, the Administrative Review Council, in its report "Rule Making by Commonwealth Agencies'', stated:

28 The Council also suggested the use of "rule" as an appropriate description for delegated legislative instruments.

29 Before the issue of DD3.8, it was not unusual for Acts to contain a number of specific instrument-making powers (in addition to a general regulation-making power). These may have resulted in a number of separate instruments of different kinds being made under an Act (for example determinations, declarations and directions, as well as regulations).

30 DD3.8 notes that the inclusion of a general instrument-making power in an Act means that it is not then necessary to include specific provisions conferring the power to make particular instruments covered by the general power. DD3.8 notes that the approach of providing for legislative instruments has a number of advantages including:

(a) it facilitates the use of a single type of legislative instrument (or a reduced number of types of instruments) being needed for an Act; and

(b) it enables the number and content of the legislative instruments under the Act to be rationalised; and

(c) it simplifies the language and structure of the provisions in the Act that provide the authority for the legislative instruments; and

31 In my view, a general instrument-making power also simplifies the task of drafting instruments under the power. Instruments drafted under a general instrument-making power will not necessarily be complex or lengthy. Nor will a general instrument-making power necessarily broaden substantially the power to make instruments under an Act. The power given by a general instrument-making power in an Act is shaped and constrained by the other provisions of the Act and is not a power at large. A general instrument-making power in an Act may add little to the power to make instruments under the Act, but will add substantially to the ability to rationalise the number and type of instruments under an Act.

(e) OPC's aim is to raise legislative instrument standards and support Parliamentary scrutiny

33 I remain of the view that OPC's drafting approach to instrument-making powers is measured and appropriate and will, over time, raise standards in the drafting of legislative instruments and support the ability of the executive and Parliament to scrutinise instruments appropriately.

34 I should also emphasise that I would be happy to consider any views that the Committee has in relation to the material that should (or should not) be included in regulations, or any alternative approach the Committee may have in mind.

The committee notes the advice of FPC regarding the basis for tying the drafting of regulations to OPC, and particularly the view that:

As noted previously, the committee's inquiry regarding the prescribing of matters by 'legislative rules' goes firstly to the specific form of the power, being a broadly expresed power which enables the executive to make laws covering a range of matters necessary or convenient, or required or permitted, to achieve the objects of an Act. The committee notes that today, and increasingly, Acts commonly provide the 'skeleton' of a legislative scheme, with the general regulation-making power relied on to provide for a vast range of matters required to effectively implement and support the operation of the Act.

The committee notes that for some considerable time, and up until the implementation of a general rule-making power by OPC in 2013, the executive exercise of the Parliament's delegated legislative power via a broadly expressed regulation-making power has been accompanied by the concomitant responsibility of close executive oversight. The requirements for such instruments to be made by the Governor-General, and the tying of the drafting of such instruments to OPC, may therefore be seen as a necessary accompaniment to the exercise of the broadly expressed delegated power to make regulations, given its nature and critical role in informing the operation of primary legislation. Clearly, such a view stands in contrast to the proposition that the requirement for OPC to draft regulations is a mere consequence of their being made by the Governor-General.

With reference to FPC's advice regarding the Legal Services Drafting Directions (at paragraph 1b), the making of regulations via a broadly expressed power to effect and implement the objects of primary legislation may therefore be properly seen as being so bound to the work of the executive as to justify the longstanding procedural and drafting requirements (effectively to be removed by FPC's implementation of legislative rules). Further, any one case aside, the nature of the power and its intended purpose to broadly effect and implement the objects of primary legislation may reasonably be said to carry potentially significant sensitivities and risks, appropriate to the tying of the drafting of such instruments to OPC.

[The committee requested FPC's response to the committee's views outlined above (Monitor No. 6 of 2014)].

Drafting quality and executive and Parliamentary scrutiny of legislative instruments

36 The Committee has not raised any issues with the content of the Rule. The Rule was drafted by OPC and deals only with matters for which there are specific authorising powers in the Australian Jobs Act 2013.

37 There appears to be nothing in the content of the Rule that would suggest that a higher level of executive scrutiny should have been applied to its making, nor that the Rule should have been made by the Governor-General rather than the Minister. The Rule is subject to Parliamentary scrutiny in the same way as any other disallowable legislative instrument. In short, in this case I do not see any adverse effects on the quality of drafting or the level of executive or Parliamentary scrutiny flowing from this instrument being a Rule rather than a regulation.

38 The types of provisions referred to above that should be included in regulations include provisions dealing with offences and powers of arrest, detention, entry, search or seizure. Such provisions are not authorised by a general rule-making power (or a general regulation-making power). If such provisions are required for an Act that includes only a general rule-making power, it would be necessary to amend the Act to include a regulation-making power that expressly authorises the provisions.

39 The quality and accuracy of the drafting of an instrument not tied to OPC under the Legal Services Directions is a matter for the responsible agency (and the rule-maker). As discussed above, in my view, the approach taken in DD3.8 will contribute to raise the standard of legislative instruments overall.

40 Regulations are required to be drafted by OPC because they are made by the Governor-General: see paragraphs 11 and 12. Commonwealth Acts have traditionally provided for regulations to be made by the Governor-General and not any other rule-maker.

41 In relation to the second part of the question, requiring regulations to be drafted by OPC and made by the Governor-General provides for higher drafting standards and an additional level of executive scrutiny. However, OPC does not have the resources to draft all Commonwealth subordinate legislation, nor is it appropriate for it to do so, and the approach taken in DD3.8 ensures that the resources of OPC and the Federal Executive Council Secretariat are directed at the matters that most warrant the application of OPC's drafting expertise and the Council's attention.

The committee notes the advice of FPC that, where provisions that should continue to be included in regulations (according to the recent OPC drafting directions relating to the use of legislative rules) are required, 'it would be necessary to amend the Act to include a regulation-making power that expressly authorises the provisions'.

However, the committee notes that there is no absolute requirement for such matters to be included in regulations, and it is unclear how, and by whom, decisions will be made regarding whether or not there is a 'strong justification' for not including such matters in regulations. The committee notes that the stated effect of implementing legislative rules is to make agencies and departments responsible for the drafting of such instruments; and that FPC has previously advised that OPC will draft or assist agencies only 'within the limits of available resources'. The committee considers that, on its face, the new arrangement carries a significant risk that drafting standards may suffer, and that matters will be improperly included in rules. This is particularly so given FPC's advice that 'requiring regulations to be drafted by OPC and made by the Governor-General provides for higher drafting standards and an additional level of executive scrutiny'.

The committee notes that, to the extent that the implementation of the general rule-making power leads to a diminution in the quality of drafting standards, there is likely to be a corresponding increase in the level of scrutiny required to be applied by the Parliament. Such an outcome would effectively fracture the longstanding requirement of direct executive control of, and responsibility for, the standards of drafting in relation to the exercise of the broadly expressed power delegated by the Parliament to the executive.

The committee notes FPC's general assurance that ceding responsibility for the drafting of significant instruments to departments and agencies (unless provided to OPC as billable work) will enable OPC to 'take steps' to 'contribute to raise [sic] the standard of legislative instruments overall'. However, in the committee's view, it is incumbent on FPC to properly substantiate how, in practice, such outcomes will be achieved with OPC drafting fewer such instruments and providing only limited oversight to agencies and departments.

[The committee requested FPC's response to the committee's views outlined above (Monitor No. 6 of 2014)].

It may be helpful if I were to make some brief comments on the form and breadth of the standard general rule-making power set out in Drafting Direction 3.8 (DD3.8). The power follows the standard general regulation-making power that has been used for some time. The principles applying to its interpretation are, therefore, well established.

Paragraph (a) is commonly called the “required or permitted” power and paragraph (b) is commonly called the “necessary or convenient” power.

5 It is important to stress that the scope of each of these powers in the general rule-making power is dependent on the other provisions of the Act.

6 This point is perhaps clearest in relation to the “required or permitted” power. The scope of this power depends on the existence and terms of other provisions of the Act that require or permit the making of rules. Put simply, the “required or permitted” power gives no power to make rules beyond that authorised by the other provisions of the Act. If there is no other provision of the Act that requires or permits the making of rules, the “required or permitted” power does not authorise the making of rules.

7 Again, the “necessary or convenient” power is not a power at large. The scope of the power varies according to the content of the other provisions of the Act. To be valid, a rule (or regulation) made under the power must “complement” rather than “supplement” the other provisions of the Act. “(A)n examination of the Act...will usually indicate whether an attempt is being made to add something to the operation of the Act which cannot be related to the specific provisions of the Act, or whether the regulation-making power has been used merely to fill out the framework of the Act in such a way as to enable the legislative intention to operate effectively.” (Pearce, D and Argument, S Delegated Legislation in Australia, 4th Edition, 2012 at 14.5). Only a provision of the latter kind is valid.

8 Thus, the form of a general rule-making power of an Act is not conclusive of the scope of the power. In my view it is, therefore, not correct to suggest that it is the form of the power itself that enables the making of laws “covering a range of matters”. For what is commonly called “skeleton legislation”, it is also not correct to suggest that a general rule-making power can necessarily be relied on to provide for “a vast range of matters” required to effectively implement and support the operation of the Act. In each case the scope of the power conferred by a general rule-making power depends on the exact terms of the other provisions of the Act. In some cases the power may be extensive. In other cases the power will be limited.

9 In my view, it is not appropriate to focus solely (or unduly) on the form of any power in deciding its scope. For a general rule-making power this is particularly the case because the scope of the power can be decided only in the context of the other provisions of the Act.

Tying of drafting work to OPC not dependent on the form of the power or type of instrument

10 There is, in my view, no basis for suggesting that it is the form of the general regulation-making power that is the basis for tying regulation drafting work to OPC. First, as I have explained, the form of the power is not conclusive of its scope. A general regulation-making power may give only a limited power to make regulations. Second, broad non-regulation subordinate legislation-making powers have existed in the Commonwealth for many years and these instruments are not tied to OPC. Finally, the drafting of all legislative instruments (not just regulations) made or approved by the Governor-General is tied to OPC. The tying of these instruments to OPC is not dependent on the form of the power under which the legislative instruments are made nor indeed the type of legislative instrument concerned. They are tied to OPC because they are legislative instruments made or approved by the Governor-General.

Drafting quality and executive and parliamentary scrutiny of legislative instruments

11 As mentioned in my previous letters, OPC does not have the resources to draft all Commonwealth subordinate legislation, nor is it appropriate for it to do so.

12 In my view, the approach set out in DD3.8 will allow OPC to ensure that it has the capacity to draft the instruments that have the most significant impacts on the community. It will enable OPC to draft the most significant instruments itself and allow it either to draft or assist agencies to draft other instruments. OPC can provide a range of services to assist agencies in drafting instruments. These services include instrument design and template development, editing, commenting on draft instruments and providing advice. In my view this approach will enhance, and not diminish, the overall quality of legislative instruments and ensure that the most significant matters receive the highest level of drafting expertise and executive scrutiny.

13 In the past there has been no clear guidance about the appropriate division of material between regulations and other legislative instruments. As a result, material seems to have been allocated between regulations and other legislative instruments without any consideration of the nature of the material itself. Less important matters of detail have sometimes been included in regulations while more important matters have been included in a wide range of other types of legislative instruments. DD3.8 deals with this lack of guidance as well as the previous proliferation of the number and kinds of legislative instruments.

14 DD3.8 outlines the material that should, in OPC’s view, be included in regulations (in the absence of a strong justification to the contrary) and so be drafted by OPC and considered by the Federal Executive Council. However, any decision in a particular case is, of course, a decision for the Government, and ultimately the Parliament, to make.

15 I would welcome any views that the Committee (or the Senate Standing Committee on the Scrutiny of Bills) may have on the appropriate division of material between regulations and other legislative instruments and would be happy to review DD3.8 to take account of them.

Scope of general rule-making power and likelihood of matters being inappropriately included in rules

16 I note that in Alert Digest No. 6 of 2014 the Senate Standing Committee on the Scrutiny of Bills has queried whether a general rule-making power would permit a rule-maker to make the following types of provisions:

• provisions which set the amount to be appropriated where an Act provides the appropriation and the authority to set the amount of the appropriation.

17 I note that this list differs only slightly from the list in DD3.8 and is substantially similar to the list included by the Australian Government Solicitor in Legal Briefing Number 102 dated 26 February 2014 (http://www.ags.gov.au/publications/legal-briefing/br102.html).

18 In my view, and taking into account the view expressed in that Legal Briefing, none of the kinds of provisions mentioned in the list would be authorised by either a general regulation-making power or a general rule-making power. Provisions of any of these kinds would require an express provision to authorise their inclusion in a regulation or any other kind of subordinate legislation. Accordingly, I think that there is no real risk of such provisions being inappropriately included in rules or regulations. Any such provision included without express legislative authority would be invalid.

19 However, it may be possible to make the matter even more certain. For example, the standard form of rule-making power (as set out in paragraph 4) could be revised so that it expressly provides that the power does not enable the making of rules dealing with provisions of these kinds. This would ensure that the scope of rule-making powers in relation to these kinds of provisions was clear on the face of the provisions themselves, regardless of whether the resulting rule were to be drafted by OPC, in-house or by another legal services provider.

20 Depending on the Committee’s views on the matters that should be included in regulations rather than other types of legislative instruments, other measures may also be appropriate. For example, if any of the matters were inappropriate to be dealt with in express provisions of the kind that I have outlined, it may be possible to deal with them through the issue of drafting standards under the Legislative Instruments Act 2003 and the introduction of a requirement for explanatory statements to include a statement about compliance with the standards. This would achieve a high level of transparency and should facilitate the Committee’s scrutiny function.

21 I would be happy to consider any views that the Committee has about this or other measures the Committee may have in mind.

22 I note that the Committee seems to assume that the approach in DD3.8 will lead to OPC drafting fewer instruments. I do not think that this will be the case (see paragraph 17 of my letter of 23 May 2014 on the volume of OPC drafted instruments). OPC will continue to be available to draft, and assist agencies to draft, instruments that are not tied to OPC. OPC will be actively seeking more of this work and I expect that it will continue to draft a substantial proportion of all legislative instruments, including the most significant and sensitive of them.

Drafting quality and executive and Parliamentary scrutiny of legislative instruments

As the advice of FPC notes, the scope of the general regulation and rule-making powers is governed by the provisions of the Act under which they are made, and the exercise of such powers to fill out the framework of an Act may in some cases be 'extensive'. This goes to one of the key concerns raised by the committee in relation to the general rule-making, which is the question of whether it is appropriate for Parliament's delegated legislative power to be exercised without the longstanding requirements for close executive oversight.

While the committee notes FPC's view that 'broad non-regulation subordinate legislation-making powers have existed in the Commonwealth for many years', the committee's inquiries have been directed at the apparent consequences of the new general rule-making power. In particular, the committee has noted that, while regulations have traditionally been subject to formal requirements for its exercise and making (that is, have been required to be made by the Governor-General and drafted by OPC), legislation made under the general rule-making power will not be subject to the same level of executive oversight. Notwithstanding FPC's view that these requirements do not relate to the general form of the regulation-making power, the question remains as to whether it is appropriate that the new general power should not be similarly subject to close executive oversight. With particular reference to cases where the provisions of an Act effectively provide an extensive power to make rules, the thrust of the committee's inquiries has gone to the extent to which the making and drafting of such rules by persons other than the Governor-General and OPC, respectively, could lead to a diminution in the quality of drafting standards. The committee has previously noted its concern that such an outcome would see a corresponding increase in the level of scrutiny required to be applied by the Parliament.

On this question, the committee notes that FPC's view and assurances that the new general-rule making power will 'enhance, and not diminish, the overall quality of legislative instruments'. However, it remains unclear to the committee how this outcome will be achieved in practice, given that departments and agencies will have responsibility for the drafting of rules. With reference to FPC's advice that the general rule-making power will not lead to OPC drafting fewer instruments, the committee has understood that one of the aims of instigating the general rule-making power was to reduce the number of instruments required to be drafted by OPC. In particular, FPC has advised:

In addition to these questions, it is unclear to the committee what mechanisms are available to OPC to monitor the quality of drafting of instruments based on the new general rule-making power; and what resources and mechanisms may be available to OPC to respond in the event that drafting standards do in fact suffer.

Division of material between regulations and other legislative instruments

The committee notes FPC's statement that certain types of provisions such as offence, entry, search, seizure, and civil penalty provisions would not be authorised by either a general regulation-making power or a general rule-making power:

However, FPC's statement leaves open the question of whether the inclusion of these types of provisions in a rule is both generally appropriate, and appropriate in a given case, thus supporting the inclusion of an express power in a rule to allow for the prescribing of such matters. The determination of this question appears to turn on the policy considerations which will inform judgements as to what is a 'strong justification' as provided for in Drafting Direction 3.8. The committee's inquiries to date have shed little light on would constitute a 'strong justification' for the inclusion of such matters in rules or, indeed, who will be responsible for the making of such judgements.

The committee notes that these questions are particularly pertinent in light of its inquiries in relation to the Jervis Bay Territory Rural Fires Ordinance 2014 [F2014L00443]. The committee's report on that instrument below outlines a number of matters on which the committee seeks a response from OPC.

The committee notes that, due to the Parliamentary program, the committee was unable to meeting with FPC and officers of the Department of Industry in July as previously scheduled. The committee will seek to reschedule that meeting and, in addition, seeks the written response of FPC to the matters outlined above.

Noting the continued engagement of FPC with the committee over this matter, and the proposals for resolving the committee's concerns in FPC's most recent correspondence (at paragraph 19 and 20), the committee agreed at its meeting on 9 July 2014 to withdraw the 'protective' notice of motion on the Australian Jobs (Australian Industry Participation) Rule 2014 [F2014L00125].^[4]

^[1] 'Last day to disallow' refers to the last day on which notice may be given of a motion for disallowance in the Senate.

^[2] Odgers' Australian Senate Practice, 13th Edition (2012), p. 413.

^[3] Odgers' Australian Senate Practice, 13th Edition (2012), p. 438.

^[4] For details on the disallowance of instruments, see the Disallowance Alert at http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Regulations_and_Ordinances/Alerts

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Australian Senate Standing Committee for the Scrutiny of Delegated Legislation - Monitor

Australian Jobs (Australian Industry Participation) Rule 2014 [F2014L00125]-Continuing matters [2014] AUSStaCSDLM 142 (16 July 2014)

Australian Jobs (Australian Industry Participation) Rule 2014 [F2014L00125]

Minister's concerns

Drafting quality and executive and Parliamentary scrutiny of legislative instruments

Drafting quality and executive and Parliamentary scrutiny of legislative instruments

Division of material between regulations and other legislative instruments