Referral
1.1
On 2 September 2021, the COAG Legislation Amendment Bill 2021 (the bill) was introduced to the House of Representatives by the Hon Alan Tudge MP.
1.2
On the same day and pursuant to the 11th report of 2021 of the Senate Standing Committee for the Selection of Bills, the bill was referred to the Senate Finance and Public Administration Legislation Committee (the committee) for inquiry and report by 14 October 2021.
1.3
On 14 October 2021, the committee sought an extension to 19 October 2021 to report, which was agreed to by the Senate.
Conduct of the inquiry
1.4
Details of the inquiry were made available on the committee's website. The committee also contacted a number of government departments, organisations and individuals inviting submissions to the inquiry by 20 September 2021.
1.5
The committee received 13 public submissions, which are available on the committee’s webpage and detailed at Appendix 2.
1.6
The committee held a public hearing in Canberra on 27 September 2021 (via videoconference). The witness list for the hearing can be found at Appendix 3.
Report structure
1.7
The report consists of three chapters. This chapter provides a background to Cabinet and the establishment of the National Cabinet, and summarises the provisions of the bill and its three Schedules.
1.8
The second chapter presents in more detail the provisions of the bill, with Chapter 3 considering the issues raised in evidence to the inquiry, and putting forward the committee’s views and recommendation.
Acknowledgement
1.9
The committee thanks all those who contributed to the inquiry by making submissions and appearing before the committee at a public hearing.
The role and function of Cabinet
1.10
The following section provides some information on the structure and operations of parliamentary cabinets in the Westminster system.
Principles of Cabinet
1.11
While the Cabinet is not mentioned in the Constitution, it has arisen out of the conventions of responsible government. Responsible government holds that executive power, nominally held by the monarch represented by the Governor-General, is exercised by ministers who are also members of Parliament.
1.12
A Parliamentary ‘Cabinet’ can be assembled in a variety of ways, however the primary characteristics of a ‘Cabinet’ include that:
the decision makers are ministers, who are authorised by and accountable to the Parliament; and
the Cabinet ministers accept ‘collective responsibility’ for the decisions made and actions taken by the Cabinet.
1.13
Provided the guiding principles of a Cabinet system are met—being collective responsibility and solidarity—it is for the Prime Minister of the day to determine the shape, structure and operation of the Cabinet.
Cabinet conventions
1.14
The 14th edition of the Cabinet Handbook, issued in October 2020, sets the policies and procedures to be followed by Cabinet and its ministers. The 14th edition was also issued to provide for the policies and procedures to be followed by the newly-formed National Cabinet (see below).
1.15
The Cabinet Handbook specifies the following regarding the operations of Cabinet:
the Cabinet is the council of senior ministers who are empowered by the Government to take binding decisions on its behalf;
a Westminster-style Cabinet is defined by adherence to the principles of collective responsibility and Cabinet solidarity;
the principle of collective responsibility requires the strict confidentiality of all Cabinet proceedings and documentation, and requires that whatever the range of private views put forward by ministers in the Cabinet, once decisions are arrived at and announced they are supported by all ministers; and
members of the Cabinet must publicly support all Government decisions made in the Cabinet, even if they do not agree with them.
National Cabinet
1.16
The National Cabinet was established on 13 March 2020, by the Prime Minister with the agreement of the First Ministers, as a committee of the Federal Cabinet.
1.17
National Cabinet is intended as a platform for ‘leaders to collaboratively address issues of national significance’, chaired by the Prime Minister and comprising of state and territory leaders. Under the National Cabinet structure, Commonwealth, state and territory governments individually retain responsibility for the implementation in their jurisdiction of decisions arising from the National Cabinet.
1.18
All First Ministers agreed to the establishment of National Cabinet as the most appropriate way to provide a coordinated and responsive approach to the ‘complex and fast moving policy and implementation challenges posed by COVID-19’.
1.19
In presenting the bill, the Hon Alan Tudge MP, Minister for Education and Youth, noted that the changes proposed by the bill to the ‘intergovernmental decision-making framework’ heralded a ‘significant and timely change for our federation’. He continued that National Cabinet was:
… working as a true federated decision-making body leading the national response to the pandemic. Many crucial decisions have been collectively made through the National Cabinet to both control the spread of
COVID-19 and keep essential services operational.
1.20
Minister Tudge outlined the vision of National Cabinet, advising that it was ‘increasingly driving a job-making agenda, focused on six priority areas of reform—rural and regional, skills, energy, infrastructure and transport, population and migration, and health’. The Minister also drew attention to the benefits of the National Cabinet model over the Council of Australian Governments (COAG) model:
In contrast to the National Cabinet's agility and decisiveness, COAG and its related bodies were burdened by red tape and bureaucracy which made them inefficient in taking decisions and slow to advance reform.
COAG operated on a consensus based decision-making model—an unrealistic and impractical feature, given the diverse and disparate needs of each state and territory. As the Prime Minister summarised, such a model 'sets the Federation up to fail'.
In the Prime Minister's words:
By any measure, the National Cabinet has proven to be a much more effective body for taking decisions in the national interest than the COAG structure.
1.21
Similar points were made by Ms Lee Steel, First Assistant Secretary, Intergovernmental Relations and Reform Division at the Department of the Prime Minister and Cabinet (PM&C), who advised the committee that the National Cabinet was able to meet much more flexibly and frequently than COAG. Ms Steel noted that the National Cabinet was:
… operating on a very different footing to the COAG in terms of the tempo of meetings, the nature of the deliberations and the responsiveness to the [COVID-19] crisis, and it is taking a more agile approach than the old COAG architecture.
Cabinet Handbook
1.22
The National Cabinet ‘operates according to guiding principles set out in the Commonwealth Cabinet Handbook’. The 14th edition of the Cabinet Handbook notes that the National Cabinet determines its priorities and the matters it considers, and further, that:
… the National Cabinet does not derogate from the sovereign authority and powers of the Commonwealth or any State or Territory. The Commonwealth and the States and Territories, as appropriate, remain responsible for implementing outcomes agreed by the National Cabinet.
1.23
In relation to National Cabinet, the Handbook advises that National Cabinet ‘operates according to the longstanding Westminster principles of collective responsibility and solidarity’, and that ‘all proceedings and documentation of the National Cabinet remain strictly confidential’ and the ‘Secretary of PM&C is the formal custodian of the National Cabinet records’.
Confidentiality
1.24
The Explanatory Memorandum (EM) to the bill observes that the proceedings of the National Cabinet are confidential, in line with the confidentiality of the Federal Cabinet. The EM explains that:
Consistent with the Cabinet and its committees, all proceedings and documentation of the National Cabinet and its committees are confidential. The maintenance of confidentiality is essential to enable full and frank discussions.
The confidentiality of information and decision-making is critical to the effective operations of the National Cabinet, enabling issues to be dealt with quickly, based on advice from experts. The sharing of sensitive data, projections and judgements—which relies on these principles of confidentiality—has been the foundation of effective decision making in the interests of the Australian people.
1.25
In a joint statement titled The Importance of Confidentiality to Relationships between the Commonwealth and the States and Territories, the Prime Minister, Premiers and Chief Ministers outlined their position on confidentiality:
First Ministers agree that National Cabinet has strengthened those relationships by facilitating regular confidential discussions in the national interest, founded on the same principles of trust, confidence and collaboration which underpin State, Territory and Commonwealth Cabinet…..
Since its establishment on 13 March 2020, all members of National Cabinet have participated on the clear understanding that these meetings were conducted according to longstanding Cabinet conventions – most importantly, the confidentiality applied to discussions, papers and records of meetings….
The disclosure of National Cabinet documents or discussions other than in accordance with the principles agreed by National Cabinet would undermine its effective operation and severely damage relations between the Commonwealth and the States and Territories.
1.26
With regard to confidentiality, Minister Tudge further noted that:
… like the Commonwealth cabinet and its committees, the maintenance of confidentiality is essential to enable full and frank discussion between the representatives of all jurisdictions.
Abolition of COAG and establishment of the NFRC
1.27
COAG consisted of the Prime Minister, state and territory First Ministers and the President of the Australian Local Government Association (ALGA).
1.28
On 29 May 2020, the National Cabinet agreed to the cessation of COAG and to the formation of a new National Federation Reform Council (NFRC), with the aim of:
…. changing the way the Commonwealth and states and territories effectively and productively work together to address new areas of reform.
1.29
The NFRC comprises the Prime Minister, Premiers, Chief Ministers, Treasurers, and the President of the ALGA. The NFRC is next due to meet in late 2021.
1.30
In presenting the bill, Minister Tudge drew attention to the work of the NFRC and said that it has:
… changed the way the Commonwealth and states and territories come together to progress priority national federation issues. Once a year, the National Federation Reform Council meets to consider issues that fall outside the National Cabinet's job creation remit, such as women's safety, Indigenous affairs, and veterans' wellbeing.
National Cabinet committees
1.31
The National Cabinet is able to establish committees as required, which may be ‘temporary or ad hoc in nature, or standing forums to inform the deliberations of the National Cabinet’.
1.32
In addition to the NFRC, several other committees have been established as committees of National Cabinet, as follows:
National Cabinet Reform Committees (NCRCs), chaired by a Commonwealth minister and including their state and territory counterparts in the relevant portfolios and convened to progress priority issues; and
the Council on Federal Financial Relations, comprising Commonwealth, state and territory Treasurers, and responsible for managing all
Federal-State funding agreements.
1.33
On 12 June 2020, the National Cabinet agreed to form six NCRCs, tasked with progressing job creation and corresponding to the priority areas of Health, Energy, Infrastructure and Transport, Skills, Rural and Regional, and Population and Migration.
1.34
PM&C advised that the National Cabinet will commission specific reform projects as needed, to be completed by the committees.
1.35
Ministers’ Meetings have also been established as part of National Cabinet, which, in contrast to COAG, are ‘more agile and responsive, significantly reducing bureaucracy and red tape’.
1.36
The new federal relations architecture is shown in Appendix 1 to this report.
Purpose of the bill
1.37
Legislative amendments are required to reflect the cessation of COAG, and the establishment of the National Cabinet and its associated committee structures. The bill’s EM outlines the four main objectives of the bill:
update outdated references to the ‘COAG Reform Fund’ in legislation, with references to the ‘Federation Reform Fund’;
update outdated references to COAG in legislation, with references to the First Ministers’ Council;
retain the term ‘Ministerial Council’ but amend its definition where it occurs in legislation to mean ‘a body (however described) that consists of the Minister of the Commonwealth, and the Minister of each State and Territory, who is responsible, or principally responsible, for matters relating to a particular portfolio issue’; and
make clear that where Commonwealth legislation makes provisions to protect from disclosure the deliberations and decisions of the Cabinet and its committees, these provisions apply to the deliberations and decisions of the committee of cabinet known as the National Cabinet.
Structure of the bill
1.38
The bill consists of three Schedules.
1.39
Schedule 1 updates references in legislation to the ‘COAG Reform Fund’ as a result of the cessation of COAG, and replaces this term with reference to the Federation Reform Fund. Provisions of the bill provide that the Federation Reform Fund is in turn defined to mean the fund established by section 5 of the Federation Reform Act 2008, ‘as it would be renamed upon commencement of items 1 and 2 of Schedule 1’ of the bill.
1.40
Schedule 2 amends obsolete and outdated references in legislation to COAG, COAG Councils and Ministerial Councils, to reflect ‘the changes to the intergovernmental architecture’ following the cessation of COAG. The Schedule replaces the term ‘COAG’ with ‘First Ministers’ Council’, and provides transitional provisions ‘for things done by, in relation to, or started and not finished by, COAG’ and its associated bodies, prior to the commencement of the bill’s provisions.
1.41
Schedule 3 amendments relate to the National Cabinet, making clear that existing legislation which prevents the disclosure of deliberations and decisions of the Cabinet and its committees also applies to the deliberations and decisions of the National Cabinet, and any committees of the National Cabinet.
1.42
Each of these Schedules is discussed in further detail in the following chapter.
Financial impact
1.43
The EM states that the bill has no financial impact.
Commencement
1.44
Schedules 1, 2 and Part 1 of Schedule 3 will commence the day after the bill receives Royal Assent. The commencement of Part 2 of Schedule 3 is contingent on the passage of other bills before Parliament. The EM explains that these provisions would therefore:
… commence whatever is the later date for the commencement of Schedule 3 of Part 1 of this Bill and the relevant Bill before the Parliament that is being amended. If the associated Bill before the Parliament is not enacted, then the relevant item in this Bill will not commence at all.
Consideration by other committees
1.45
At the time of reporting, the Parliamentary Joint Committee on Human Rights and the Standing Committee for the Scrutiny of Bills had not yet considered the bill.
1.46
The Statement of Compatibility with Human Rights accompanying the EM observes that the bill engages with the right to freedom of expression, as it seeks to ‘limit the right to seek, receive and impart information’. The Statement clarifies that this restriction is permissible and necessary ‘in order to maintain the confidentiality of the deliberations or decisions of the National Cabinet and its committees’, and the bill is therefore compatible with human rights.