House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Health and Aged Care, The Hon. Dr Michael Wooldridge, MP)

Notes on clauses

Section 1: Short Title

This section cites the short title of the proposed legislation as the Health Legislation Amendment Act (No. 3) 1999.

Section 2: Commencement

This section provides that, except for the particular commencement dates in this section, the amendments to the National Health Act 1953 (the NHA) commence on the day on which the legislation receives Royal Assent. Items with commencement dates specified as being other than the day of Royal Assent are as follows:

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Schedule 1 and Part 1 of Schedule 2 commence on a day to be fixed by Proclamation or otherwise on a day six months from the day of Royal Assent.

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Part 2 of Schedule 2 (which removes references to friendly societies from the NHA as amended) will commence on the latter of either:

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a day that is the transfer day for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 ; or

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immediately after the commencement of Part 1 of Schedule 2.

The sole purpose of Part 2 of Schedule 2 is to remove from Part 1 of Schedule 2 any references to friendly societies after the Proclamation of the transfer date in the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 1) 1999 .

The primary purpose of the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 1) 1999 is to transfer regulatory responsibility for State and Territory based financial institutions, including friendly societies, to a Commonwealth regulatory regime. Upon transfer, friendly societies previously registered or incorporated under State or Territory law will become companies under the Corporations Law and will be dealt with as such by the National Health Act 1953 (as amended).

A further consequence of the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 1) 1999 will be the amendment of a large number of Commonwealth Acts (including the National Health Act 1953 ) to remove any reference to friendly societies (as entities registered or incorporated under State and Territory law). However, as the Financial Sector Reform (Amendments and Transitional Provisions) Bill (No. 1) 1999 and this Bill are expected to be in Parliament at the same time, it is desirable that a mechanism be put in place in this Bill to prevent it from operating contrary to the intent of the Financial Sector Reform Bill .

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Schedule 3 is taken to have commenced on 1 January 1999.

The amendments in Schedule 3 are amendments to the Private Health Insurance Incentives Act 1998 , the Health Insurance Commission Act 1973 and the National Health Act 1953 . These amendments are retrospective and will be taken to have commenced on the same day as the Private Health Insurance Incentives Act 1998 , ensuring that the Act, as amended, is fully operative as of 1 January 1999. In addition, retrospective operation will offer greater overall effectiveness and efficiencies for the relevant Commonwealth agencies involved in the administration of the Rebate, for the private sector and for the community. Advantages of the amendments having retrospectivity are as follows:

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there will be internal review by the Health Insurance Commission of its decision not to pay the incentive payment (item 4: clause 6-25);

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there will be no annual registration for participants in the premiums reduction scheme or for health funds (items 10 and 29, 30 and 31; subclause 11-5(1) and clause 14-5);

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a person who pays a premium but is not covered by the policy will be able to participate in the premiums reduction scheme (item 14: clause 11-10);

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there will be certainty in the notification requirements of the Health Insurance Commission (items 17 and 25: subclauses 11-25(1) and 11-40(3));

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the Health Insurance Commission will have the ability to set off debts due to the Commonwealth (item 56: clause 18-20); and

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visitors from countries with whom Australia has entered into a Reciprocal Health Care Agreement will be eligible for the Rebate from 1 January 1999 (item 65: section 20-5).

The length of time for the period of retrospectivity will be relatively short.

Section 3: Schedules

This section notes that each Act that is specified in the Schedules is to be amended as set out in the applicable items in the Schedule concerned.