Revised Explanatory Memorandum
VI. NOTES ON SCHEDULE 3 - Amending the Legislative Instruments Act 2003
47. This Schedule seeks to update the Legislative Instruments Act 2003 (Legislative Instruments Act) in two ways. Firstly, it seeks to make consequential amendments to the Legislative Instruments Act following the amendments to the Financial Management and Accountability Act 1997 (FMA Act) contained in Schedule 2. Secondly, Schedule 3 seeks to remove references, in two places in the Legislative Instruments Act, to an instrument made under the FMA Act that is now redundant.
48. An explanation of the amendments proposed in Schedule 3 is provided in sequential order.
Legislative instruments not subject to the disallowance process under the Legislative Instruments Act
49. Item 1 amends the table in subsection 44(2) of the Legislative Instruments Act to repeal items 19, 20 and 21, which list legislative instruments made under the FMA Act that are not subject to the disallowance process in the Legislative Instruments Act.
50. The amendments in Schedule 2 to the FMA Act will establish the disallowance exemptions for the instruments described in items 19 and 21 of the table in subsection 44(2) in the Legislative Instruments Act. It is therefore no longer necessary to include items 19 and 21 in the table in subsection 44(2) of the Legislative Instruments Act. Further, item 20 of the table in subsection 44(2) refers to an instrument that no longer exists and will also be removed.
51. Item 19 of the table in subsection 44(2) of the Legislative Instruments Act concerns two types of instruments made under the FMA Act, which are:
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- Determinations under subsection 20(3) of the FMA Act, which enable the Finance Minister to abolish a Special Account; and
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- Chief Executive's instructions (CEIs) made under section 52 of the FMA Act, which enable a Chief Executive to provide instructions to officials in that Chief Executive's agency on any matter on which regulations may be made under the FMA Act (although, such instructions cannot create offences or impose penalties).
52. Special Account determinations made under subsection 20(3) of the FMA Act are not subject to the disallowance process under the Legislative Instruments Act, as Executive control is intended to be exercised in these determinations that simply revoke the abolition of a Special Account. As noted in the Explanatory Memorandum for the Legislative Instruments Bill 2003 , instruments made where Executive control is intended may be exempted from disallowance.
53. As noted in Part V of this Explanatory Memorandum, item 3 of Schedule 2 will clarify, definitively, that CEIs are not legislative instruments. The disallowance process set out in the Legislative Instruments Act concerns legislative instruments. Should the Financial Framework Legislation Amendment Bill (No. 1 ) 2011 (FFLA Bill 2011) be enacted, CEIs will no longer need to be included in the table in subsection 44(2) of the Legislative Instruments Act.
54. Item 20 of the table in subsection 44(2) of the Legislative Instruments Act provides that determinations made under Order 6.2.1 of the Financial Management and Accountability Orders 1997 (Orders) (made under section 63 of the FMA Act) are exempt from disallowance under the Legislative Instruments Act. These determinations formerly specified the business operations of an FMA Act agency. However, this item is no longer required as the business operations of an agency are no longer set out in the Orders and have instead been moved to regulation 5A of the FMA Regulations. Written determinations under regulation 5A are not a legislative instrument but are required to be published on the Department of Finance and Deregulation's website as soon as practicable under sub-regulation 5A(2).
55. Item 21 of the table in subsection 44(2) of the Legislative Instruments Act concerns guidelines issued by Ministers under regulations. These guidelines are made pursuant to section 64 of the FMA Act, which enables a Minister to issue guidelines to officials for matters that can be addressed through the Financial Management and Accountability Regulations 1997 (FMA Regulations) and which are within the Minister's responsibility (although, such guidelines cannot create offences or impose penalties). Instruments made where Executive control is intended may be exempted from disallowance arrangements. Guidelines made by Ministers under section 64 of the FMA Act another existing example of instruments where Executive control is intended, and, consequently, are not subject to the disallowance process outlined in the Legislative Instruments Act.
Legislative instruments not subject to the sunsetting process under the Legislative Instruments Act
56. Item 2 amends the table in subsection 54(2) of the Legislative Instruments Act to repeal items 17, 18, and 19, which list legislative instruments made under the FMA Act that are not subject to the sunsetting process in the Legislative Instruments Act.
57. The amendments in Schedule 2 to the FMA Act will establish the sunsetting exemptions for the instruments described in items 17 and 19 of the table in subsection 54(2) in the FMA Act. It is therefore no longer necessary to include items 17 and 19 in the table in subsection 54(2) of the Legislative Instruments Act. Further, item 18 of the table in subsection 54(2) refers to an instrument that no longer exists and will also be removed.
58. Item 17 of the table in subsection 54(2) of the Legislative Instruments Act concerns exemptions from sunsetting for 2 types of instruments made under the FMA Act, as follows:
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- Special Account determinations made under subsection 20(1), (2) or (3) of the FMA Act. These Special Account determinations are:
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- Special Account determinations made under subsection 20(1), which the Finance Minister would make to establish, allow amounts to be credited to, and specify the purposes for debiting amounts from, a Special Account;
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- Special Account determinations made under subsection 20(2), which the Finance Minister would make to revoke or vary a determination under subsection 20(1); and/
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- Special Account determinations made under subsection 20(3), which, as noted above, the Finance Minister would make to abolish a Special Account established under subsection 20(1); and
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- CEIs made under section 52 of the FMA Act, which enable a Chief Executive to provide instructions to officials in that Chief Executive's agency on any matter on which regulations may be made under the FMA Act.
59. Special Account determinations are exempt from the sunsetting process under the Legislative Instruments Act, as they are expected to be enduring in nature (see clause 55 of the Explanatory Memorandum for the Legislative Instruments Bill 2003 ).
60. As noted in Part V of this Explanatory Memorandum, item 3 of Schedule 2 will clarify, definitively, CEIs are not legislative instruments. The sunsetting process set out in the Legislative Instruments Act concerns legislative instruments. Should the FFLA Bill 2011 be enacted, CEIs will no longer need to be included in the table in subsection 54(2) of the Legislative Instruments Act.
61. Item 18 of the table in subsection 54(2) of the Legislative Instruments Act provides that determinations made under Order 6.2.1 of the Orders are exempt from sunsetting under the Legislative Instruments Act. The Orders formerly specified the business operations of an FMA Act agency. However, this item is now redundant as the business operations of an agency are no longer defined under the Orders and are now described by regulation 5A of the FMA Regulations. As noted above, written determinations under regulation 5A are not a legislative instrument but are required to be published on the Department of Finance and Deregulation's website as soon as practicable, in accordance with sub-regulation 5A(2).
62. Item 19 of the table in subsection 54(2) of the Legislative Instruments Act concerns guidelines issued by Ministers under regulations. These guidelines are made pursuant to section 64 of the FMA Act, which enables a Minister to provide guidance to officials for matters that can be addressed through the Financial Management and Accountability Regulations 1997 (FMA Regulations) and which are within the Minister's responsibility (although, such guidelines cannot create offences or impose penalties). These instruments are exempt from the sunsetting process under the Legislative Instruments Act, as they are expected to be enduring in nature (see clause 55 of the Explanatory Memorandum for the Legislative Instruments Bill 2003 ).