Chapter 1Introduction
1.1On 10 August 2023, the Senate referred the provisions of the Social Security and Other Legislation Amendment (Miscellaneous Measures) Bill 2023 (bill) to the Senate Education and Employment Legislation Committee (committee) for inquiry and report by 31 August 2023.
1.2The bill seeks to amend the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act), Social Security Act 1991 (Social Security Act), and Veterans' Entitlements Act 1986 (Veterans' Entitlements Act) to ensure that certain provisions which provide legislative authority for expenditure on employment programs and services operate as intended.
Conduct of the committee's inquiry
1.3The committee advertised the inquiry on its website and invited relevant stakeholders to provide submissions by 18 August 2023.
1.4The committee received one submission from the Department of Employment and Workplace Relations (department) which is available on the committee's website. The committee thanks the department for its contribution to the inquiry.
1.5The committee agreed to conduct the inquiry on the written evidence and did not hold a public hearing.
Consideration by other parliamentary committees
1.6When examining a bill or draft bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
1.7In its Scrutiny Digest 9 of 2023, the Scrutiny Committee reiterated its previous concerns in relation to the Employment Secretary's broad discretionary powers to determine arrangements and grants, and the appropriateness of this being done by notifiable instrument as proposed in the bill. It noted that 'no justification is provided as to why the Employment Secretary has such a broad discretionary power to specify programs or why instruments made under proposed subsection 1062A(1A) should be notifiable rather than legislative'.
1.8At the time of writing, the Human Rights Committee had not considered the bill. However, the Statement of Compatibility with Human Rights concluded that the bill is compatible with human rights because it 'promotes human rights and has no other discernible impact on human rights'.
Financial implications
1.9The Explanatory Memorandum (EM) noted that there were no financial impacts associated with the proposed amendments.
Context of the bill
1.10The High Court's 2012 and 2014 decisions in the Williams cases determined that 'most Commonwealth expenditure requires legislative authority, beyond an appropriation, supported by the Commonwealth's constitutional powers'. Following the High Court's decisions, the legislative authority for many Commonwealth programs—that are not authorised in portfolio legislation—has been provided by section 32B of the Financial Framework (Supplementary Powers) Act 1997 (FFSP Act) through items in Schedules to the Financial Framework (Supplementary Powers) Regulations 1997 (FFSP Regulations).
1.11According to the department, adding 'a new item to the FFSP Regulations involves reasonably substantial administrative effort and time, which has caused implementation delays on occasions for new Commonwealth programs'.
1.12In 2022, the Social Security Legislation Amendment (Streamlined Participation Requirements and Other Measures) Act 2022 (SPROM Act) moved legislative authority for Commonwealth expenditure on employment programs into the social security law by inserting a new Chapter 2D into the Social Security Act. Specifically, section 1062A of Chapter 2D allows the Employment Secretary to make, vary or administer arrangements and grants, related to employment programs and services to assist persons to obtain and maintain paid work.
1.13The insertion of Chapter 2D into the Social Security Act was intended to provide more appropriate legislative authority for expenditure on employment programs than that provided by section 32B of the FFSP Act.
Potential unintended consequences
1.14According to the EM, the bill aims to address issues that could potentially arise in relation to the drafting of Chapter 2D. This includes the possibility of decisions being subject to judicial review under the ADJR Act and for information about a person that was obtained by an officer under Chapter2D being treated as protected information for the purposes of social security law. Additionally, the application of the Social Security (Administration) Act 1999 (Social Security Administration Act) to Chapter 2D could give rise to merits review of decisions.
1.15According to the department, the bill would address these issues by making technical amendments to clarify the application of Chapter 2D and ensure that its original intent is achieved and that it operates effectively.
Overview of the bill
1.16The bill would amend the ADJR Act, the Social Security Act and the Veterans' Entitlements Act to clarify that payments supported by Chapter 2D of the Social Security Act are treated in the same way as if they were supported by the FFSP Act and ensure certainty as to the employment programs.
Amendments to the ADJR Act
1.17The bill would amend the ADJR Act to exempt decisions under Chapter 2D of the Social Security Act from review under the ADJR Act. Currently, decisions under the FFSP Act are excluded from review under the ADJR Act, while decisions under the Social Security Act are not. According to the EM, the proposed amendment 'would ensure that decisions made in the exercise of the spending power in Chapter 2D are treated in the same way as if they were made in the exercise of the spending power in section 32B of the FFSP Act'.
1.18The department indicated that this 'would not affect any income support recipients' rights to review of decisions related to their payments, as those payments do not derive legislative support from Chapter 2D, but rather from other more specific provisions of the social security law'.
Amendments to the Social Security Act
1.19At present, section 1062A automatically provides legislative authority for employment related programs and this can make it difficult to determine which programs are supported by Chapter 2D. The bill would amend the Social Security Act to clarify that, for an employment program to be funded under section 1062A, they must be specified in a notifiable instrument made by the Employment Secretary. The department noted that this 'will provide legislative support for less programs than is currently the case, and the programs that are supported will be known with certainty and publicly listed'.
1.20The bill would also clarify that section 1062A does not displace the legislative authority provided by section 32B of the FFSP Act. This amendment will 'make clear that legislative authority under section 32B of the FFSP Act can continue to be relied on irrespective of Chapter 2D'.
Application of the Social Security Administration Act
1.21The bill would amend the Social Security Act to provide that the Social Security Administration Act, other than those sections dealing with definitions, delegations, and appropriations, does not apply in relation to Chapter 2D. Currently, the Social Security Administration Act 'contains various provisions that apply in relation to the administration of the social security law that are not relevant to Chapter 2D which simply provides legislative authority for certain spending'. The bill would ensure that decisions made under Chapter 2D are not treated differently to decisions made under the FFSP Act, and 'would make clear that merits review of Chapter 2D decisions is not available'.
1.22While the amendments would exclude applicable provisions concerning merits review, the department pointed out that 'all of the usual rights for persons/organisations under programs [would] continue to apply, irrespective of the legislative source of support for that program (whether it be Chapter 2D, section 32B of the FFSP Act or otherwise)'.
Clarifying the operation of Chapter 2D
1.23The bill would make it clear that information obtained by an officer under Chapter 2D of the Social Security Act is not protected information as defined under the social security law. The EM indicated that 'information obtained under Chapter 2D would be treated in the same way information would be if it was instead obtained under section 32B of the FFSP Act' and noted that information obtained under this section 'is not protected information, as it is not obtained under the social security law'.
1.24The bill would also clarify that payments supported by Chapter 2D are treated in the same way as if they were supported by the FFSP Act. The bill would clarify that a payment under Chapter 2D is not a social security payment by making it clear that it does not apply to a payment under an arrangement or grant referred to in section 1062A of that Act.
Reporting requirements
1.25The bill would amend the Social Security Act to require the Employment Secretary to include in the department's annual report the name of each program for which an arrangement or grant referred to in section 1062A was made, varied, or administered, and the total amounts paid in that period under arrangements or grants in relation to each program.
Minor technical changes
1.26The bill would make several minor technical amendments to the Social Security Act to ensure that the legislative authority Chapter 2D provides better engages with the Commonwealth's constitutional powers.
Amendments to the Veterans' Entitlements Act
1.27The bill would amend the Veterans' Entitlements Act to clarify that payments supported by Chapter 2D are treated in the same way as if they were supported by the FFSP Act. This change would be 'equivalent to the amendment to the Social Security Act that item 2 of Schedule 1 to the bill would make'.
Committee view
1.28The bill would ensure that the original intent of Chapter 2D, as expressed in the Explanatory Memorandum for the SPROM Act's originating bill, is achieved by providing clarity and consistency in the Commonwealth's authority to spend money on employment programs and services.
1.29It is the committee's view that the proposed amendments will achieve this by ensuring that legislative support provided under Chapter 2D operates in a similar way to legislative support provided by the FFSP Act, while also clarifying how Chapter 2D interacts with the rest of the Social Security Act. Thebill would also ensure that the legislative authority Chapter 2D provides better engages with the Commonwealth's constitutional powers. The committee notes that the bill does not seek to make any policy changes.
1.30Indeed, the committee notes that the amendments would not affect any income support recipients' rights to review of decisions related to their payments. Furthermore, the committee understands that other payments provided by the Social Security Act do not derive their authority from Chapter 2D, and as such, would not be impacted by the proposed measures in the bill.
1.31The committee notes that no submissions were received which opposed the measures proposed in the bill. The committee therefore supports the amendments to the ADJR Act, Social Security Act, and the Veterans' Entitlements Act to ensure that Chapter 2D of the SPROM Act operates as originally intended by the Parliament.
1.32The committee recommends that the Senate pass the bill.
Senator Tony Sheldon
Chair