Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No 5) Regulations 2017 [F2017L01211]-Response required [2017] AUSStaCSDLM 389 (15 November 2017)

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Instrument	Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No. 5) Regulations 2017 [F2017L01211]
Purpose	Establishes legislative authority for spending on two activities administered by the Department of Agriculture and Water Resources
Authorising legislation	Financial Framework (Supplementary Powers) Act 1997
Portfolio	Finance
Disallowance	15 sitting days after tabling (tabled Senate 16 October 2017) Notice of motion to disallow currently must be given by 7 December 2017
Scrutiny principle	Standing Order 23(3)(c), (a) and (d)

Scrutiny principle 23(3)(c) of the committee’s terms of reference requires the committee to ensure that instruments do not unduly make the rights and liberties

of citizens dependent upon administrative decisions which are not subject to review of their merits by a judicial or other independent tribunal.

The instrument adds two new items to Part 4 of Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997 (FF(SP) Regulations), establishing legislative authority for activities in the agriculture sector. One of these is item 244, the Agricultural Trade and Market Access Cooperation Program.

The ES explains that the Program will include provision of grants to eligible individuals and organisations for activities that build relationships with trading partners, neighbouring countries and international organisations in support of access to overseas markets for Australian agricultural products. The Department of Agriculture and Water Resources will consider and determine applications for grants as they are received, until all funds have been allocated. Applications are assessed

by a five-member panel of departmental officials, against criteria and considerations set out in the program guidelines. The department's website advises potential applicants for the grants that their applications will be assessed based on merit.^[1]

While the committee acknowledges that grant funding decisions under the Program are made on a rolling basis, it is not clear to the committee that the absence of

a competitive or comparative element of decision-making is an established ground for the exclusion of merits review.^[2] Accordingly, the committee considers that the ES does not provide sufficient information to establish that grant funding decisions made under the Program possess characteristics that would justify their exclusion from merits review.

The committee requests the minister's advice regarding the characteristics of the grant scheme offered under the Agricultural Trade and Market Access Cooperation Program that would justify its exclusion from merits review.

Scrutiny principle 23(3)(a) of the committee's terms of reference requires the committee to ensure that an instrument is made in accordance with statute.

This principle requires that instruments are made in accordance with their authorising Act as well as any constitutional or other applicable legal requirements.

the government's spending on the Agricultural Trade and Market Access Cooperation Program, including the grants scheme under that Program, by adding item 244

20 September 2017. The ES states that grant funding of $3.1 million has been available under the Program over four years since 2015-16, and that applications for the grants scheme opened in March 2016. The department's website indicates that grants were made under the scheme amounting to $55,000 in financial year 2015-16, $1.65 million in 2016-17, and an unspecified amount so far in 2017-18.^[3]

The committee notes that, in Williams No. 1, the High Court held that in most circumstances, the Commonwealth executive requires statutory authority before

The committee is unclear in this instance as to the legislative authority under which spending on the grants scheme was funded prior to 20 September 2017, and if

such legislative authority previously existed, why it is necessary to establish a new legislative authority by inserting item 244 into Schedule 1AB of the FF(SP) Regulations now.

The committee requests the minister's advice as to the legislative authority under which funds were spent on the Agricultural Trade and Market Access Cooperation Program grants scheme prior to 20 September 2017; and if such legislative authority was already in existence, the rationale for the addition of item 244 into the Financial Framework (Supplementary Powers) Regulations.

Scrutiny principle 23(3)(d) of the committee's terms of reference requires the committee to consider whether an instrument contains matters more appropriate for parliamentary enactment (that is, matters that should be enacted via principal rather than delegated legislation).

Under the provisions of the Financial Framework (Supplementary Powers) Act 1997 (FF(SP) Act), executive spending may be authorised by specifying schemes in regulations made under that Act. The money which funds these schemes is specified in an appropriation bill, but the details of the scheme may depend on the content

of the relevant regulations. Once the details of the scheme are outlined in the regulations, questions may arise as to whether the funds allocated in the appropriation bill were inappropriately classified as ordinary annual services of

The Senate has resolved that ordinary annual services should not include spending on new proposals because the Senate's constitutional right to amend proposed laws appropriating revenue or moneys for expenditure extends to all matters not involving the ordinary annual services of the government.^[5] In accordance with

the committee's scrutiny principle 23(3)(d), the committee's scrutiny of regulations made under the FF(SP) Act therefore includes an assessment of whether measures may have been included in the appropriation bills as an 'ordinary annual service of the government', despite being spending on new policies. The committee's considerations in this regard are set out in the guideline relating to the Financial Framework (Supplementary Powers) Regulations published on the committee's website.^[6]

This instrument adds two new items to Part 4 of Schedule 1AB to the FF(SP) Regulations, establishing legislative authority for activities in the agriculture sector. One of these is item 243, the Livestock Global Assurance Program. The instrument describes this program as establishing and supporting an entity for certification and assurance of overseas importers and facilities used by livestock exporters.

The ES indicates that funding for the Program commenced in 2017-18 for four years, under the department's Program 2.1, Biosecurity and Export Services.

It appears to the committee that item 243 implements a new policy, in establishing a new entity not previously authorised by special legislation, and that the initial appropriation in relation to this new policy may have been inappropriately classified as 'ordinary annual services' and therefore improperly included in Appropriation Bill (No. 1) 2017-18 (which is not subject to amendment by the Senate).

The committee draws this matter to the attention of the minister, the Senate and the relevant Senate committees.

9 November 2017), which states that applications will be assessed by a panel based on: merit in accordance with the ATMAC grant program guidelines; and the order in which applications are received.

[5] In order to comply with the terms of a 2010 Senate resolution relating to the classification of appropriations for expenditure, new policies for which no money has been appropriated in previous years should be included in an appropriation bill that is not for the ordinary annual services of the government (and which is therefore subject to amendment by the Senate).

The complete resolution is contained in Journals of the Senate, No. 127—22 June 2010,

pp. 3642-3643. See also Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 2 of 2017, pp. 1-5.

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

Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No 5) Regulations 2017 [F2017L01211]-Response required [2017] AUSStaCSDLM 389 (15 November 2017)

Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No. 5) Regulations 2017 [F2017L01211]