Northern Australia Infrastructure Facility Investment Mandate Direction 2021 [F2021L00942]-Exempt instruments raising significant scrutiny issues [2021] AUSStaCSDLM 157 (29 September 2021)

• Northern Australia Infrastructure Facility Investment Mandate Direction 2021

Northern Australia Infrastructure Facility Investment Mandate Direction 2021

FRL No.	[F2021L00942][1]
Purpose	To provide a direction to the Northern Australia Infrastructure Facility’s Board in relation to the performance of the functions of the Facility.
Authorising legislation	Northern Australia Infrastructure Facility Act 2016
Portfolio	Infrastructure, Transport, Regional Development and Communications
Source of exemption	Item 2 of section 9 of Legislation (Exemptions and Other Matters) Regulation 2015

Overview

1.1 The Northern Australia Infrastructure Facility (the Facility) provides financial assistance to States, Territories and other entities to develop economic infrastructure in Northern Australia.

1.2 The Northern Australia Infrastructure Facility Investment Mandate Direction 2021 (the instrument) provides an investment mandate to the Facility to guide the functions of the Facility and how it invests.

Scrutiny concerns

Exemption from disallowance

1.3 Senate standing order 23(4A) empowers the committee to scrutinise delegated legislation that is exempt from disallowance against all scrutiny principles set out in standing order 23. For such instruments the committee may also consider whether it is appropriate for the instrument to be exempt from disallowance.

1.4 At a minimum, the committee expects all explanatory statements to exempt instruments to identify the source of the exemption and justify why the exemption is appropriate in the specific context of the instrument.

1.5 In this regard, the explanatory statement identifies the source of the exemption from disallowance as section 9 of the Legislation (Exemptions and Other Matters) Regulation 2015, as it is a ministerial direction. However, it makes no attempt to justify why it is appropriate for this ministerial direction to be exempt.

1.6 In its final report of the inquiry into the exemption of delegated legislation from parliamentary oversight (the final report), the committee highlighted specific concerns in relation to the use of framework laws which leave crucial details regarding how public money will be spent or invested to delegated legislation which is exempt from disallowance.^[2] The committee takes this opportunity to express its significant concern that the government has not yet responded to the final report which was tabled in the Senate on 16 March 2021.

1.7 Noting the above, the committee's clear view is that it is inappropriate for this instrument to be exempt from disallowance. This accords with the Senate's requirement that that exemptions should only be made in exceptional circumstances and will only be justified in rare cases.^[3] The classification of this instrument as exempt from disallowance prevents parliamentary oversight of how public money will be invested by the Facility. The committee notes the following explanation of the measures in the explanatory statement:

It is a major initiative of the Commonwealth's White Paper on Developing Northern Australia (Our North, Our Future), and integral to the Commonwealth’s strategy for Northern Australia. The Facility is a $5 billion Corporate Commonwealth Entity offering equity, and/or concessional debt to encourage investment in infrastructure in Northern Australia.^[4]

1.8 The explanatory statement indicates the importance of the measures for the government's strategy for Northern Australia, and the significant funding of $5 billion. As such, the committee considers that it is not appropriate for the Parliament's role to be so limited by the exemption from disallowance.

1.9 The committee notes that commercial and operational certainty of the measures can be maintained while still providing for effective parliamentary oversight. As set out in the final report, many concerns in relation to subjecting an instrument to disallowance could be addressed by an instrument not coming into force until such time as the disallowance period has passed, by shorter disallowance periods in some limited cases, or by providing for an instrument to be approved through a vote of the Houses of the Parliament. This latter option could potentially allow for an instrument to be approved and enter into force more quickly than might otherwise occur under the typical 15 sitting day disallowance period.^[5]

1.10 In light of the above, the committee requests the minister's detailed advice as to why it is considered necessary and appropriate for the instrument to be exempt from disallowance.

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[1] Accessible on the Federal Register of Legislation at https://www.legislation.gov.au/.

[2] Senate Standing Committee for the Scrutiny of Delegated Legislation, Final report of the inquiry into the exemption of delegated legislation from parliamentary oversight, 16 March 2021, pp. 32-3, available at

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Scrutiny_of_Delegated_Legislation/Exemptfromoversight/Final_report.

[3] Senate resolution 53B: Delegated legislation—disallowance and sunsetting, agreed to on 16 June 2021, https://www.aph.gov.au/Parliamentary_Business/Chamber_documents/Senate_chamber_documents/standingorders/d00/Resolutions_expressing_opinions_of_the_Senate/.

[4] Explanatory statement, p. 2.

[5] A recent instance of this was the Australian Charities and Not-for-Profits Commission Amendment (2021 Measures No. 1) Regulations 2021, which was tabled and approved by the Senate in two sitting days. See Senate Standing Committee for the Scrutiny of Delegated Legislation, Final report of the inquiry into the exemption of delegated legislation from parliamentary oversight, 16 March 2021, p. 109, available at

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Scrutiny_of_Delegated_Legislation/Exemptfromoversight/Final_report.