House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Finance and Administration, Senator the Honourable Nick Minchin)

Overview of amendments proposed in Schedule 2 of the FIFA Bill

615. Schedule 2 of the FFLA Bill proposes amendments to 30 Acts to update, align and clarify the Commonwealth's financial framework in relation to matters not covered by Schedule 1. Four of these Acts are also included in Schedule 1 for amendment. The types of amendments are outlined below.

Transfer of approval powers from the Treasurer to the Finance Minister

616. The amendments proposed to 25 Acts transfer approval powers, in enabling Acts and the CAC Act, from the Treasurer to the Finance Minister, in relation to the following activities of specific entities that are legally separate from the Commonwealth and that have the power to handle money that is not public money:15

•

borrowing and other money raising from financial markets;

•

certain types of investment of surplus money16; and

•

providing guarantees, including a guarantee to an entity, placing limits on a guarantee given by an entity to a third party and providing a guarantee to a subsidiary of an entity.

617. Most of the entities established in enabling Acts are CAC Act authorities. Entities included in the group that are not CAC Act authorities are:

•

Albury-Wodonga Development Corporation;

•

Co-operative Farmers and Graziers Direct Meat Supply Limited;

•

Administration of Norfolk Island;

•

Queensland Fisheries Management Authority; and

•

the holder of a pastoral homestead lease or an agricultural lease granted under an Ordinance of the Northern Territory of Australia relating to Crown lands, but not including a company.

618. The Bill also proposes amendments to the High Court of Australia Act 1979 to transfer, from the Treasurer to the Finance Minister, the power to approve the investment of certain types of money not immediately required to be expended by the High Court of Australia (which is part of the Commonwealth, but has separate statutory powers).

619. The transfer of approval powers from the Treasurer to the Finance Minister has the following benefits:

•

It will co-locate in one central portfolio the powers relating to the financial oversight of Commonwealth and other entities, particularly Budget-dependent entities. In particular, more efficient and effective decision-making will be possible about whether an entity should borrow, or otherwise raise money for capital expenditure purposes, from the Commonwealth or from financial markets.

•

It will align powers to authorise guarantees with Regulation 14 of the Financial Management and Accountability Regulations 1997, which gives the Finance Minister the power to authorise loan guarantees on behalf of the Commonwealth.

•

It will align borrowing approval powers with the powers that are already provided to the Finance Minister in the section 36 of the Health Insurance Commission Act 1973 and in section 62 of the Sydney Harbour Federation Trust Act 2001.

Delegation powers for the Finance Minister

620. The Finance Minister is given delegation powers in relation to most of the approval powers transferred from the Treasurer to the Finance Minister and for two similar approval powers that the Finance Minister already has.17

621. Providing a delegation power assists efficient public administration. Although not all of the Acts currently provide a delegation power for the Treasurer, the amendments proposed in the FFLA Bill apply the delegation power uniformly across the legislation, unless there are circumstances that do not make it appropriate in relation to particular entities. Only the amendments to the Co-operative Farmers and Graziers Direct Meat Supply Limited (Loan Guarantee) Act 1978 do not include a delegation power for the Finance Minister. The reason for this is explained below in the Notes to Items 79 to 84 of Schedule 2 regarding that Act.

622. In each case with a delegation power, it is provided to an official within the meaning of the FMA Act.18 The delegation power is not provided to an officer of a CAC Act authority19 because:

•

such a delegation could place the officer in a position in which there is a conflict of interest; and

•

CAC Act authorities have statutory independence from the Government. This independence might be also be interpreted, or perceived, as giving an officer independence in relation to the powers or functions delegated by the Finance Minister.

Replacing references to "Minister for Finance" with "Finance Minister"

623. In cases where amendments are proposed to transfer approval powers from the Treasurer to the Finance Minister and to provide delegation powers to the Finance Minister, references to Minister for Finance (or to Minister for Finance and Administration) are amended to state the Finance Minister. This aligns definitions with the definition contained in the FMA Act, that is, the Minister who administers the FMA Act.

624. No amendment is made to the CAC Act in this regard. An amendment is not necessary because the Finance Minister is defined, in that Act, as the Minister who administers the CAC Act.

Other amendments

625. Other proposed amendments cover:

•

delegations by the Treasurer, the Finance Minister and a Chief Executive under the FMA Act;

•

membership of an Advisory Committee, in certain circumstances, formed to report on large waivers under the FMA Act;

•

alignment of offence provisions in the CAC Act with the Criminal Code Act 1995; and

•

an amendment to the Native Title Act 1993 to clarify that the duties of the Parliamentary Joint Committee on Native Title and the Aboriginal and Torres Strait Islander Land Account include examination of the annual report of the Indigenous Land Corporation.