House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, the Hon Mal Brough MP)

Schedule 8 - Australian Institute of Family Studies

Summary

The amendments made in this Schedule are part of the Government's response to the Uhrig Review, which examined and reported on improving the structures and the governance practices of such entities. The Government assessed the Institute's governance arrangements against the principles and recommendations of the Uhrig Review, identifying that an executive management structure and operation under the Financial Management and Accountability Act would be consistent with the findings. The Institute is already a statutory agency for the purposes of the Public Service Act, so no changes to that arrangement are contemplated.

The effect of these amendments will be to provide a transition for the Institute so that it will no longer be subject to the Commonwealth Authorities and Companies Act. Instead it will become a prescribed agency under the Financial Management and Accountability Act.

The functions of the Institute will not be affected by these amendments, but responsibility for these functions will be given to the Director. Transitional arrangements to ensure that these governance changes do not disrupt these functions are included.

The amendments commence on 1 July 2006.

Background

The Institute is established under Part XIVA of the Family Law Act and is currently subject to certain requirements under the Commonwealth Authorities and Companies Act.

Section 114M of the Family Law Act provides that the staff of the Institute including the Director constitute a Statutory Agency for the purposes of the Public Service Act and that the Director is the Head of that Statutory Agency. No changes to these arrangements are being made.

The necessary amendments to the Family Law Act will ensure that the governance arrangements of the Institute are those that apply to prescribed agencies under the Financial Management and Accountability Act. Separate arrangements are being made to ensure that the Institute, and the Director as Chief Executive of the Institute, are appropriately prescribed for the purposes of the Financial Management and Accountability Act.

Explanation of the changes

Part 1-Amendments

Part 1 of the schedule makes amendments to Part XIVA of the Family Law Act to ensure that the governance arrangements of the Institute conform to the executive management governance arrangements envisaged in the Uhrig Review. The most significant amendment is the dissolution of the Board of Management of the Institute and its members, with that responsibility being transferred to the Director.

Items 1 and 2 repeal the definitions of 'Board' and 'member' from section 114A.

Section 114B provides for the establishment of the Institute. New subsections 114B(1A) and (1B) are added by item 3 to provide respectively that the Institute must have a Director and that it consists of the Director and staff referred to in section 114M. A note will inform a reader that the Institute does not have a legal identity separate from the Commonwealth.

Item 4 amends subsection 114B(2) to confirm that the functions of a statutory body built on the executive management governance arrangements of the Uhrig Review are the Director's responsibility rather than that of the Institute itself. This amendment therefore replaces 'Institute' with 'Director' which confirms this requirement.

Item 5 inserts new subsection 114B(2A) so that the new function of the Institute is to assist the Director in the performance of his or her functions.

Items 6 and 7 replace references to the 'Board' with references to 'Director' in paragraphs 114B(3)(a) and (b).

Subsection 114B(4) provides that the Institute must specify any requests made by the Minister when providing each report under section 9 of the Commonwealth Authorities and Companies Act. This subsection is repealed by item 8 .

Item 9 repeals sections 114BA, 114BB, 114C, 114D, 114E, 114F, 114G, 114H, 114J, 114K and 114L and substitutes new sections 114C, 114D, 114E, 114F, 114G, 114H, 114J, 114K, 114L, 114LA, 114LB, 114LC and 114LD.

Section 114BA provides powers that were conferred on the Institute as a body corporate under the Commonwealth Authorities and Companies Act. As a statutory agency that is part of the Commonwealth, the Institute will not deal with securities, nor be involved in legally binding partnerships, consortiums or business associations except on behalf of the Commonwealth. This section is no longer required.

Section 114BB specifies the powers of the Institute relating to property, contracts and gifts etc. These are matters that are dealt with under the Financial Management and Accountability Act or its Regulations. This section is no longer required.

Section 114C is also repealed by item 9 because it deals with the Director and Board of Management of the Institute. The only relevant provision after implementation of the executive management governance arrangements of the Uhrig Review is subsection 114C(1). However, this provision is now encapsulated by the amendment at item 3 with the insertion of new subsection 114B(1A).

New section 114C

This is a new section that doesn't exist in the current Part XIVA. It deals with the Minister's directions to the Director. New subsection 114C(1) provides that the Minister may, in writing, direct the Director about the performance of the Director's functions. This direction is a legislative instrument.

New subsection 114C(2) provides that particulars of any directions given by the Minister under new subsection 114C(1) must be of a general nature.

New subsection 114C(3) provides that the Director must comply with any directions given by the Minister under new subsection 114C(1).

New section 114D

This section replaces some of the requirements of current subsections 114C(3) and (4). New subsection 114D(1) provides that the Director is to be appointed by the Minister by written instrument. A note informs the reader that, under subsection 33(4A) of the Acts Interpretation Act 1901 , the Director is eligible for reappointment.

New subsection 114D(2) provides that the Director is to be appointed on a full-time basis.

New section 114E

New section 114G provides that the Director holds office for the period specified in the instrument of appointment, with a limit that the term of appointment is not to exceed five years. Under the previous requirements, the Governor-General made the appointment and the period of the appointment could not exceed 7 years (see current section 114E).

New section 114F

New section 114F provides for an Acting Director to be appointed, consistent with the provisions of the Act that formerly enabled an Acting Director to be appointed with the exception that there will be no limit of 12 months on the period of the acting appointment as is the case under current subsection 114K(1).

New section 114G

New section 114G provides for the remuneration of the Director. This provision is equivalent to current section 114F except that it only applies to the Director rather than to all members of the Board.

New section 114H

New section 114H provides that the Director must not engage in paid employment outside the duties of the Director's office without the Minister's approval. This new section is an unambiguous requirement that could have been made by determination of the Governor-General of the terms and conditions of a member, including the Director, under current subsection 114C(5).

New section 114J

New section 114J provides for leave of absence of the Director. This provision is equivalent to current section 114G except that it only applies to the Director rather than to the Director and the other members of the Board.

New section 114K

New section 114K provides that the Director must give to the Minister a written notice of all interests, pecuniary or otherwise, that the Director has or acquires and that could conflict with the proper performance of the functions of the Director.

New section 114L

New section 114L provides that the Director holds office on the terms and conditions in relation to matters not covered by the Family Law Act that are determined by the Minister. This is similar to current subsection 114C(5) prior to its repeal where the Governor-General determined the member's terms and conditions of office.

New section 114LA

New subsection 114LA(1) provides that the Director may resign by giving the Minister a written resignation. New subsection 114LA(2) provides for the date of effect of the resignation. This section is similar to current section 114H.

New section 114LB

New subsection 114LB(1) provides that the Minister may terminate the appointment of the Director for misbehaviour or physical or mental incapacity. New subsection 114LB(2) provides that, if the Director:

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becomes bankrupt; or

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applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

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compounds with his or her creditors; or

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makes an assignment of his or her remuneration for the benefit of his or her creditors; or

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is absent without reasonable excuse; or

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fails, without reasonable excuse, to comply with section 114H (outside employment); or

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fails, without reasonable excuse, to comply with section 114K (disclosure of interests);

then the Minister may terminate the appointment of the Director. This section is similar to current section 114J.

New section 114LC

New section 114LC provides that the annual report for the Institute must be a report on the Institute's operations during the year ending 30 June. The annual report is to be prepared by the Director and given to the Minister as soon as practicable after 30 June for presentation by the Minister to the Parliament.

New section 114LD

New subsection 114LD(1) enables the Director to delegate all or any of his or her functions or powers under Part XIVA of the Family Law Act to an SES employee (including any acting SES employee) of the Institute. A note informs the reader that the Director, as Chief Executive of the Institute has other powers of delegation under section 53 of the Financial Management and Accountability Act. New subsection 114LD(2) provides that a delegate must comply with any written directions of the Director when performing a delegated function or exercising a delegated power.

Item 10 amends subsection 114M(3) to reflect the fact that the Director has responsibility for the management of the Institute including the engaging of persons as consultants with the approval of the Minister. The Institute no longer has any responsibility for this role.

Item 11 repeals sections 114MA, 114MC, 114MD and 114MF, all of which become redundant once the Institute falls under the governance arrangements associated with a prescribed agency under the Financial Management and Accountability Act.

Part 2-Transitional provisions

Division 1-Preliminary

Item 12-Definitions

This item defines certain terms that are used in Part 2. Subitem 12(2) provides that, subject to subitem 12(1) , an expression used in this Part that is also used in the new law has the same meaning in this Part as it has in the new law.

Division 2-Assets, liabilities and legal proceedings

Item 13-Vesting of assets of old Institute

This item provides that, at the commencement time, the assets of the old Institute will become the asset of the Commonwealth. The Commonwealth will become the old Institute's successor in law in relation to those assets. The term 'asset' is defined in item 12 of this Part.

Item 14-Vesting of liabilities of old Institute

This item provides that, at the commencement time, the liabilities of the old Institute will become the liabilities of the Commonwealth. The Commonwealth will become the old Institute's successor in law in relation to those liabilities. The meaning of 'liability' is defined in item 12 of this Part.

Item 15-Certificates relating to vesting of land and item 16-Certificates relating to vesting of assets other than land

These items are standard provisions that facilitate the registration of the transfer of assets under any law of the Commonwealth, a State or a Territory that provides for the registration or recording of interests. For example, if an interest in land were transferred to the Commonwealth under item 13 , the mechanism in item 15 would facilitate the recording of this transfer in the relevant State's land titles register.

Item 17-Substitution of Commonwealth as a party to pending proceedings

Item 17 is intended to facilitate the smooth running of court and tribunal proceedings by substituting the Commonwealth as the appropriate party in any proceedings on foot at the commencement time in which the old Institute was a party.

Item 18-Transfer of custody of old Institute records

Any record or documents that are in the custody of the old Institute will be transferred into the custody of the Director at the commencement time.

Item 19-Access by Board members to records

This item allows Board members, after the commencement time, to continue to have access to certain records on the same terms as is currently allowed by section 27L(4) of the Commonwealth Authorities and Companies Act.

Division 3-Reference to, and things done by or in relation to, old Institute

Item 20-References in instruments

This item provides for instruments made before the commencement time that refers to the old Institute (including a reference to the Board) to continue to have effect after the commencement time, with a reference that reflects the revised structure of the Institute. The meaning of instrument is defined in item 12 of this Part.

This is required given that other provisions of this Bill repeal the Board and its members other then the Director and vest what were the statutory functions of the Institute in the Director.

Subitem 20(1) provides that where required the substitute reference for the old Institute may be the Director.

Subitem 20(2) provides that, where required, the substitute reference may be to the Commonwealth where the instrument relates to assets or liabilities.

Subitem 20(3) provides for instruments made before the commencement time that refer to staff of the old Institute to continue to have effect after the commencement time as if such references were a reference to a member of staff of the new Institute.

The item is intended to avoid the need for instruments to be amended or replaced.

After the commencement time, it will normally be appropriate for instruments to be taken to refer to the Director, as the Director will have the statutory functions that the old Institute had before the commencement time. However, it is possible that, in some cases, subitems 20(1), (2) or (3) will lead to an inappropriate result. Subitem 20(4) empowers the Minister to make an instrument that is a legislative instrument, providing that:

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subitems 20(1), (2) or (3) do not apply in a specified reference including:

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subitem 20(1) applies as if the reference to the Director were a reference to the Commonwealth;

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subitem 20(2) applies as if the reference to the Commonwealth were a reference to the Director; or

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subitem 20(3) applies as if the reference to a member of staff of the new Institute were a reference to the Director.

In instances where none of the above combinations is appropriate and the Minister makes an instrument determining that subitem 20(1) , (2) or (3) does not apply, subitem 20(5) provides that regulations may determine what the most appropriate substitute reference in the instrument is to be.

Item 21-Operation of laws

This item provides that, if anything was done by or in relation to the old Institute (including the Board) before the commencement time, for the purposes of the operation of any law of the Commonwealth, then it is taken to have been done after the commencement time by, or in relation to, the Director.

This item is intended to avoid the need for things to be done again. If, for example, the Board did something under a law before the commencement time, then, after the commencement time, the Director will be taken to have done that thing.

After the commencement time, it will normally be appropriate for things to be taken to have been done by the Director, as the Director will have the statutory functions that the old Institute had before the commencement time. However, it is possible that, in some cases, subitem 21(1) will lead to an inappropriate result. To cover this possibility, subitem 21(3) empowers the Minister to make an instrument that is a legislative instrument, providing that subitem 21(1) does not apply in a particular case, or that it applies as if the reference to the Director were a reference to the Commonwealth.

If the Minister makes an instrument under paragraph 21(3) ( a) in relation to a specified thing, subitem 21(4) permits regulations to be made in relation to that thing, providing that, after the commencement time, the thing is taken to have been done by, or in relation to, a specified person or body other than the Commonwealth or the Director.

Subitem 21(5) provides that, to avoid doubt, for the purposes of this item, doing a thing includes making an instrument.

Item 22-Financial statements and other reporting requirements

This item is required to enable the efficient and effective discharge of reporting obligations of the old and new Institute.

Subitem 22(1) provides for the Director to provide any reports (including financial statements or otherwise) relating to the old Institute required under law for a period where the reporting period ends after the commencement period. For example, where the old Institute was required to produce an annual report, and the end of that reporting period occurs after commencement, the Director is obliged to satisfy the reporting requirements of the old Institute.

Subitem 22(2) provides that, in circumstances under subitem 22(1) where the Director is obliged to provide a report relating to a specified period in which the Director must report for both the old Institute and the new Institute, for instance, where commencement occurs during the reporting period, the Director may discharge this reporting requirement through a single report covering both the old and new Institute.

Subitem 22(3) provides for the Director to provide any reports (including financial statements or otherwise) relating to the old Institute required under law for a period where the reporting period ends before the commencement period, and, where the report has not been provided by the commencement time, the Director must provide the report. For example, where the old Institute was required to produce an annual report covering the period 1 July 2005 to 30 June 2006 and the Act commences on 1 July 2006, the Director will be required and enabled to provide that report relating to the old Institute.

Item 23-Director

This item allows for the person holding office as the Director immediately before the commencement time to become the Director after the commencement time, on the same terms and conditions as applied immediately before the commencement time, without the need for the Minister to make a new appointment. Paragraph 23(2) ( a) provides that this item does not have the effect of extending the term of the Director. This will not prevent the termination provisions from applying to the Director in the usual manner.

Division 4-Miscellaneous

Item 24-Appropriation of money

This item clarifies that, for the purposes of an Appropriation Act, references to the old Institute are taken, after commencement, to be read as references to the new Institute. This is to ensure that the Institute has ongoing access to appropriated funds.

Subitem 24(2) relates to circumstances where, at the commencement time, money (cash and cash equivalents) of the old Institute is transferred to the Consolidated Revenue Fund as part of item 13 in this Schedule. In such instances, this item provides the required appropriation for the Institute to access such money after the commencement time.

Item 25-Exemption from stamp duty and other State or Territory taxes

This item ensures that the operation of the transitional provisions in this Part, including the transfer of assets and liabilities, do not result in a liability to pay State or Territory stamp duty or tax.

Item 26-Constitutional safety net - acquisition of property

It is not expected that any provisions in this Part will result in an acquisition of property within the meaning of that expression in the Constitution. However, if it does, item 26 sets out the standard Constitutional safety net provision.

Item 27-Certificates taken to be authentic

To avoid ambiguity, certificates, including those relating to matters covered in items 15 and 16 of this Part, which may be made by the Minister, are to be taken as authentic.

Item 28-Delegation by Minister

Subitem 28(1) provides that the Minister may delegate all or any of his or her powers and functions under this Part to the Secretary of the Department of Families, Community Services and Indigenous Affairs and to the Director. The delegation must be in writing.

Subitem 28(2) provides that, in exercising or performing powers or functions under a delegation under subitem 29(1) , the delegate must comply with any directions of the Minister.

Subitem 28(3) states that a power or function delegated to the Director under subitem 28(1) must not be sub-delegated under subsection 114LC(1) of the new law.

Item 29-Regulations

Subitem 29(1) provides that the Governor-General may make regulations prescribing matters required or permitted to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to this Part.

Subitem 29(2) clarifies that, in particular, regulations may be made prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments or repeals made by this Schedule.