National Health and Medical Research Council Amendment Bill 2006

National Health and Medical Research Council Amendment Bill 2006

THE INQUIRY

1.1       The National Health and Medical Research Council Amendment Bill 2006 was introduced into the Senate on 29 March 2006. On 30 March 2006, the Senate, on the recommendation of the Selection of Bills Committee (Report No. 3 of 2006), referred the Bill to the Committee for report.

1.2       The Committee considered the Bill at a public hearing on 28 April 2006. Details of the public hearing are referred to in Appendix 2. The Committee received three submissions relating to the Bills and these are listed at Appendix 1. The submissions and Hansard transcript of evidence may be accessed through the Committee's website at https://www.aph.gov.au/senate_ca

THE BILL

1.3       The purpose of this Bill is to amend the National Health and Medical Research Council Act 1992 (the NHMRC Act) to introduce new governance arrangements and to clarify accountability and reporting functions for the National Health and Medical Research Council.

1.4       The proposed amendments to the NHMRC Act:

  • Strengthen the independence of the NHMRC;
  • Ensure the continued focus on the provision of scientific and technical expertise by dividing the responsibility of governance and expert scientific advice between the CEO and the Council;
  • Streamline and clarify the reporting lines of the CEO and the Council;
  • Do not affect the level of funding allocated by the Commonwealth for health and medical research;
  • Streamline some of the existing provisions to make them more reader friendly and to clarify their intent; and
  • Include detailed transitional provisions to ensure a smooth transition to the new arrangements.[1]

1.5       The Department provided a detailed analysis of the changes being made to the NHMRC Act.[2] The analysis is reproduced at Appendix 3.

BACKGROUND

1.6       The NHMRC was established in September 1936 and has played a pivotal role in funding and supporting health and medical research in Australia. The NHMRC's role, responsibilities and functions were eventually enacted through legislation in 1992 with the National Health and Medical Research Act 1992.

1.7       The new arrangements to be enacted by this Bill address governance issues that were identified in three recent reviews.[3] The three key reports were:

  • Sustaining the Virtuous Cycle for a Healthy, Competitive Australia: Investment Review of Health and Medical Research — Final Report, Australian Government, December 2004 (Chairman: Mr John Grant);
  • Governance of the National Health and Medical Research Council; Audit Report No. 29 2003-04, Australian National Audit Office, February 2004; and
  • Review of Corporate Governance of Statutory Authorities and Office Holders, Australian Government, June 2003 (Chairman: Mr John Uhrig, AC).

ISSUES

1.8       The Australian Society for Medical Research (ASMR) supports the establishment of the NHMRC as a statutory agency. The ASMR stated:

This would strengthen NHMRC's independence and facilitate clear lines of responsibility for governance and financial accountability. It will also allow Council to focus on matters pertaining to health and medical research and advice. We note that the roles and functions of the Council, the Principal Committees and working committees have not been altered, and that the new agency will be financially independent, with direct appropriations, and that the CEO will be responsible and accountable for the financial and on-going operations of the agency.[4]

1.9       Of concern to the ASMR is that the Commonwealth has not implemented the Investment Review's recommendation of a substantive funding increase in the NHMRC Medical Research Endowment Account. ASMR comments:

Based on forward projections, success rates for NHMRC project grants will fall from 21% to 9% in the next five years, and NHMRC Fellowships' success rates will fall by a factor of two. This would have undesirable knock-on effects for the Australian health and medical research sector, the health system and the knowledge based economy.[5]

1.10      The Department responded to the issue of funding:

The recommendations about funding are under the continual eye and consideration of the government. Those are things that we have to wait for government decisions on...I think that we have to wait until the budget. There has already been something said about it, and the research community and the various research organisations understand that we have to wait until the budget. This is not a money bill; it is essentially a governance bill.[6]

The Committee notes that a recent press release indicated that the government has decided to increase funding for medical research and that details will be announced in the budget as part of the government’s response to the Grant Review recommendations on health and medical research funding.[7]

1.11      The Australian Vice-Chancellors' Committee (AVCC) was supportive of the streamlining of reporting and accountability arrangements as well as the improvements that will result in greater transparency. However, they raised concerns relating to the altered reporting arrangements where the CEO is responsible to report directly to the Minister. The AVCC stated:

The concern with this altered reporting structure is that there is the potential for the expert advice provided by Council to the CEO to be either ignored or not considered when making recommendations to the Minister concerning funding decisions. The AVCC values the independence of expert advice in funding national health and medical research in Australia and recommends that the Bill be amended to enable expert advice to be provided directly to the Minister.

With regard to the intention to reduce the size of the governing Council, the AVCC is concerned that unless attention is placed on the role and function of the Research Committee, the capacity for high quality recommendations to be made concerning funding of research proposals may be put at risk.[8]

1.12      The Department provided the following comment regarding the CEO's responsibility to report directly to the Minister:

The intention here is simple: there is a CEO appointed with a direct line of responsibility; that CEO is responsible and accountable to the minister and that CEO will, as I have said before, have an agreement with the minister on his accountabilities.

...[The] CEO is directly responsible and accountable to the minister for the good running of the NH&MRC and the implementation of government objectives in relation to the NH&MRC.[9]

1.13      The Committee raised concerns on the proposed amendment impacting on consultation processes, particularly consultation with State and Territory Health Ministers. The proposed amendment states that the Minister must undertake 'appropriate' consultation. The Department of Health and Ageing responded on this issue:

The minister does sit with state and territory health ministers on the Australian Health Ministers Council. The states and territories are represented by their chief health officer on the NH&MRC. That constitutes, with the Commonwealth Chief Medical Officer, nine places on the council. Clearly, without a large degree of cooperation and consensus, this is not going to work...

I am not going to in any way anticipate what the minister might do, but I am saying that the general term ‘appropriately’ clearly takes in state and territory ministers. On some occasions in relation to appointments of chairs and in relation to appointments of members of some committees I know there have been considerable hold-ups in getting replies and things like that. This is going towards streamlining it.[10]

1.14      The Department of Health and Ageing (DoHA) confirmed the primary outcomes of the proposed amendments:

The Bill's provisions strengthen the NHMRC's independence, promote clear lines of responsibility for governance and financial accountability and allow the Council to focus on issues relating to medical and biological research and advice.[11]

CONCLUSION

1.15      In conclusion, from the Committee's investigation, the amendments proposed in this Bill appear to be supported by members of the medical, health and research industry.

Recommendation

1.16      The Committee reports to the Senate that it has considered the National Health and Medical Research Council Amendment Bill 2006 and recommends that the Bill be passed without amendment.

Senator Gary Humphries
Chairman
May 2006

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