Revised Explanatory Memorandum
(Circulated by authority of the Minister for Finance, Senator the Hon Mathias Cormann)Notes on Schedule 6 - Other amendments
121. The amendments contained in this Schedule have been identified by entities and are of a governance or resource management nature.
Air Services Act 1995
122. Airservices Australia (Airservices) is currently restricted in its ability to manage foreign currency risk effectively, due to limitations on hedging in section 50 of the Air Services Act 1995 (AA Act).
123. Under existing hedging powers Airservices manages its exposure to foreign currency on commodities (predominantly capital project payments) via hedge transactions. The proposed amendment would replace the current power to hedge in relation to "commodities" with a power to hedge in relation to the broader concept of "goods and services". This amendment would allow Airservices to also manage foreign currency exposure on operating expenses including insurance premiums and technical support services.
124. Item 1 would repeal and substitute paragraph 50(1)(c) of the AA Act, to provide for the acquisition of goods or services by Airservices.
125. Item 2 would repeal and substitute subsection 50(4) of the AA Act to provide that the definition of "hedging purposes" means reducing or eliminating risks of adverse financial consequences to Airservices. The new definition would permit Airservices to reduce or eliminate that risk of adverse variations in the costs in relation to money raising or the revenue obtainable or the costs in relation to acquiring goods and services, and in maintaining the value of investments and property used as security for money raising, or proposed money raising.
Auditor-General Act 1997
126. The Auditor-General Act 1997 (A-G Act) would be amended to extend the prohibition on disclosing information in draft audit reports provided under section 19 of the A-G Act to also cover extracts of draft reports and to any other report created for the purposes of preparing a draft report. Such documentation is to be kept confidential to preserve the integrity of the audit process.
127. It is a longstanding and well accepted practice for a performance audit to involve the preparation of an interim report, or part thereof, prior to the subsequent preparation of a proposed report under section 19 of the A-G Act. An interim report is designed to confirm factual information with public sector agencies and other key stakeholders, and to outline tentative audit findings and conclusions for discussion with the recipient(s). As such, these documents have an important role in the preparation of a performance audit report, both in terms of obtaining an agreed understanding of the facts and providing the opportunity for the relevant parties to comment on the issues arising from the audit. In practice, these reports are provided to entities on an in-confidence basis. However, they do not have legal status, as the A-G Act currently refers only to proposed reports.
128. Item 3 would repeal and substitute subsection 36(3) of the A-G Act to ensure that exemptions from disclosing information currently accorded to proposed reports, prepared under section 19 of the A-G Act, are also provided to drafts and extracts of proposed reports and to any other report (including drafts) created for the purposes of preparing a proposed report under section 19 of the A-G Act.
129. Item 3 would also continue the penalty arrangements currently in place, being imprisonment for 2 years should a person disclose information covered by subsection 36(3) of the A-G Act. The item also inserts a note after subsection 36(4) that would provide that a defendant under subsection 36(4) bears an evidential burden.
130. Item 4 provides for the application of the proposed amendments to the A-G Act. The amendments are to apply in relation to any disclosure.
Australian Trade Commission Act 1985
131. The Australian Trade Commission Act 1985 (Austrade Act) would be amended to reflect the Administrative Arrangements Order that allocates domestic tourism to the Australian Trade Commission (Austrade). In performing this function, the CEO of Austrade must have regard to the need to provide services as efficiently and economically as possible.
132. Item 5 would amend section 8 of the Austrade Act to number the paragraph as (1).
133. Item 6 would add the word "and" at the end of subparagraphs 8(a)(i) to (viii), indicating that the ways in which the Austrade CEO can facilitate and encourage trade between Australia and foreign countries are not mutually exclusive.
134. Item 7 would insert new subsections 8(2) and 8(3) providing for the Austrade CEO's functions in relation to domestic tourism.
135. Item 8 would amend subsection 9(1) to insert "under subsection 8(1)" after "functions".
136. Item 9 would repeal paragraph 9(2)(b) and substitute a new paragraph 9(2)(b) relating to the duties of the Austrade CEO, requiring that the CEO must have regard to the need to provide services as efficiently and economically as possible. The item would also insert a new paragraph 9(2)(c) to require that in relation to the CEO's duties under subsection 8(1), to have regard to the desirability of improving and extending the range of accessibility to advice, assistance and financial support available to persons involved in trade between Australia and foreign countries; and Australia's obligations under international agreements.
Future Fund Act 2006
137. The PGPA Act was developed with the intention of not including penalties and sanctions within the Act (apart from a provision dealing with the termination of accountable authorities of corporate Commonwealth entities) and to rely on existing legislation or legal arrangements. The Future Fund Board of Guardians (the Board) is covered by the Future Fund Act 2006 (FF Act) and is not subject to the PGPA Act but has been subject to the civil penalty provisions contained within the CAC Act. With the repeal of the CAC Act, the civil penalty arrangements in the CAC Act were preserved through item 16 of Schedule 3 of the PGPA (C & T) Act pending resolution of a longer term arrangement.
138. Subsequently, the Regulatory Powers (Standard Provisions) Act 2014 (RP(SP) Act) has been passed by the Parliament, providing an alternative on which to rely. The proposed amendments to the FF Act seek to rely on this framework to the greatest extent possible in maintaining consistency with the arrangements under which the Board operates.
139. Items 10 would insert a new definition into section 5 of the FF Act to define "civil penalty provision" as having the same meaning as in the RP(SP) Act.
140. Items 11 would repeal the definition of "Commonwealth authority".
141. Item 12 would insert two new definitions for "corporate Commonwealth entity" and "disqualifiable position".
142. Item 13 would repeal the definition of "involved".
143. Item 14 would insert a new definition of "relevant court" into section 5 of the FF Act.
144. Item 15 would insert a new heading before section 56 of the FF Act, Subdivision A - Civil Obligations and criminal offences.
145. Items 16 would repeal the note to subsection 56(1) and substitute a new note that would reference the RP(SP) Act in relation to civil penalty provisions and units.
146. Item 17 would repeal and substitute new sections 57 to 59 of the FF Act. Generally these amendments insert the maximum penalties for contravening the civil penalties, which are set at 2,000 penalty units and are generally consistent with similar arrangements in the Corporations Act 2001. Sections 57 to 59 would also be amended to remove reference to a person being involved in a contravention of a civil penalty being subject to civil penalty proceedings. The RP(SP) Act addresses this in section 92.
147. Item 18 would insert a new heading before section 63, Subdivision B - Other provisions relating to civil penalty provisions and criminal offences, for the provisions located in Subdivision B, which consists of sections 63 to 66.
148. Item 19 would repeal and substitute section 66. The proposed section 66 would permit the Finance Minister to require a person to assist in relation to a civil penalty or offence committed against a provision of the FF Act. This section would broadly replicate the repealed clause 13 of Schedule 2 to the CAC Act. There is no equivalent in the RP(SP) Act.
149. Item 20 would insert a new Subdivision C of Division 7 of Part 4 into the FF Act. The subdivision would include new sections 67A to E.
150. Proposed section 67A would provide civil penalty provisions for breach of duties and clarify how the FF Act provisions and RP(SP) Act provisions interact. For example, the proposed subsection 67A(2) would provide that the Finance Minister would be the "authorised applicant" under the RP(SP) Act, consistent with the arrangements formerly in place under the CAC Act, and proceedings could be taken in the Federal Court of Australia and each Supreme Court of a State or Territory.
151. Proposed section 67B would deal with compensation orders, which are not dealt with in the RP(SP) Act. This provision generally replicates clause 4 of Schedule 2 to the CAC Act. However, the provision has been clarified to only apply when a person contravenes a civil penalty provision and not when he or she commits an offence.
152. Proposed section 67C would permit a relevant court to disqualify a Board member from being on the Board or being a member of an accountable authority of a corporate Commonwealth entity. This provision is generally consistent with subsections 27C(1) to (4) of the CAC Act.
153. Proposed section 67D would permit a relevant court to give a person subject to a disqualification order leave to hold a disqualified position. This provision generally replicates subsections 27C(5) to (8) of the CAC Act.
154. Proposed section 67E would permit a relevant court to grant relief to a person subject to civil penalty proceedings or civil proceedings in certain circumstances. The power to grant relief is generally consistent with clause 14 of Schedule 2 to the CAC Act.
155. Item 21 would provide for the application of the amendments proposed to the FF Act, stating that they are to apply in relation to any conduct that occurs after the commencement of the amendments.
Health Insurance Act 1973
156. Item 22 would amend paragraph 106ZPLA(b) to omit "Scheme". This would correctly reflect the title of the Professional Services Review in legislation.
157. Item 23 would insert a new section 106ZQ after paragraph 106ZPR requiring the annual report to be prepared under section 46 of the PGPA Act.
158. Item 24 provides for the application of the proposed amendments to the Act, stating that the amendments are to apply to the reporting period commencing on 1 July 2014 and later reporting periods.
Industrial Chemicals (Notification and Assessment) Act 1989
159. Item 25 would repeal and substitute a new section 108 of the Act. Section 108 relates to annual reports. The amendment would harmonise annual report arrangements for the National Industrial Chemicals Notification and Assessment Scheme.
160. Item 26 provides that this amendment applies in relation to the reporting period commencing on 1 July 2014 and later reporting periods.
International Organisations (Privileges and Immunities) Act 1963
161. Item 27 would insert a new section 12C in the International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) after existing section 12B that would explicitly provide that international and overseas organisations given body corporate status under this Act are not Commonwealth entities for the purposes of the PGPA Act. It is not the intention of the PGPA Act to impose the rules and requirements applicable to Commonwealth entities on international and overseas organisations conferred body corporate status through the IOPI Act. Despite this, the officials involved in making decisions about the allocation of resources to such entities will continue to be subject to the duties contained in the PGPA Act.
Parliamentary Superannuation Act 2004
162. Items 27A to 27E would amend the Parliamentary Superannuation Act 2004 to allow parliamentarians covered by this Act to direct superannuation contributions to a self managed superannuation fund.
163. The amendments in this item will amend the Parliamentary Superannuation Act 2004 to allow superannuation contributions for parliamentarians in the scheme under the Parliamentary Superannuation Act 2004 to be paid directly to self managed superannuation funds. Under these amendments, contributions will still only be able to be made to self managed superannuation funds that are complying superannuation funds for the purposes of the Parliamentary Superannuation Act 2004. The amendments in this item will also amend the Remuneration and Allowances Act 1990 to allow salary sacrificing to self managed superannuation funds. The restriction on salary sacrificing to self managed superannuation funds was a consequence of the general restriction on superannuation contributions being made into self managed superannuation funds and will no longer be relevant.
164. Item 27A would amend paragraph 11(2)(a) of the Act to omit the text "other than a self managed superannuation fund" to enable a member to choose a fund that is a self managed superannuation fund.
165. Item 27B would amend paragraph 13(e) of the Act to omit "RSA, or" and substitute "RSA".
166. Item 27C would repeal paragraph 13(f) from the Act as this provision would limit the ability of a covered parliamentarian to choose to use a self managed superannuation fund.
167. Item 27D would amend subparagraph 14(2)(a)(i) to omit "other than a self managed superannuation fund" to enable parliamentarians to vary a superannuation choice notice to direct contributions to a self managed superannuation fund.
168. Item 27E would amend paragraph 16(1)(a) to omit "(other than a self managed superannuation fund)" to ensure that a notice to inform members of their right to choose a fund does not prohibit self managed superannuation funds.
Remuneration and Allowances Act 1990
169. Items 27F to 27J would amend the Remuneration and Allowances Act 1990 to allow parliamentarians covered by this Act to salary sacrifice into self managed superannuation funds.
170. The amendments to the Remuneration and Allowances Act 1990 would allow salary sacrificing to self managed superannuation funds. The restriction on salary sacrificing to self managed superannuation funds was a consequence of the general restriction on superannuation contributions being made into self managed superannuation funds and will no longer be relevant.
171. Item 27F would repeal the definition of "self managed superannuation fund" from Item 1A of Schedule 3 of the Remuneration and Allowances Act.
172. Item 27G would amend paragraph 1D(2)(a) of Schedule 3 to omit "that is not a self managed superannuation fund" to enable a salary sacrifice election to include a self managed superannuation fund.
173. Item 27H would amend subparagraph 1G(5)(a)(iv) of Schedule 3 to enable superannuation fund elections to include self managed superannuation funds.
174. Item 27J would amend subparagraph 1H(2)(a)(i) to provide that a variation of a superannuation fund election can include a self managed superannuation fund.
Reserve Bank Act 1959
175. The proposed amendments seek to ensure that disclosure requirements for members of the Reserve Bank Board can be varied to allow for their responsibilities in relation to monetary policy decisions, and the Bank's role in financial system stability, to be consistent with the former arrangements under the Reserve Bank Act 1959 (RBA Act) and the CAC Act class order issued by previous Treasurers.
176. Item 28 would repeal subsections 7A(5) and (6) of the Act and substitute a new subsection 7A(5) which deals with general duties of officials, other than the duty to disclosure interests.
177. Item 29 would insert new sections 7B and 7C after section 7A. New section 7B would provide for the disclosure of interest requirements for members of the Reserve Bank Board in relation to certain matters specifically relating to matters of monetary policy or the role of the Bank in financial system stability.
178. New section 7C would provide for the disclosure of material personal interests requirements for members of the Reserve Bank Board and the Payments System Board in relating to more general matters being considered by the Board.
Terrorism Insurance Act 2003
179. Item 30 would replace a reference to "Minister" with "Corporation" in section 31 of the Terrorism Insurance Act 2003. This change is being made to clarify that should the Chief Executive resign, this should be in writing to the Corporation rather than to the Minister, as the Corporation is also responsible for the appointment of that person.