CHAPTER 6
INSUFFICIENT PARLIAMENTARY SCRUTINY OF THE EXERCISE OF LEGISLATIVE POWER
Application of the criterion set out in Standing Order 24(1)(a)(v)
6.1 Constitutional propriety demands that Parliament carry out its legislative
function. Parliament should not inappropriately delegate its power to
legislate to the Executive. Whenever Parliament delegates the power to
legislate to others, it must address the question of how much oversight
it should maintain over the exercise of the delegated power. The criterion
set out in Standing Order 24(1)(a)(v) requires the Committee to advise
the Senate where bills seek to delegate legislative power but fail to
provide for a proper auditing of its use.
6.2 A bill may insufficiently subject the exercise of delegated legislative
power to parliamentary scrutiny in a number of circumstances. For example,
it may:
- give a power to make subordinate legislation which is not to be tabled
in Parliament or, where tabled, is free of the risk of disallowance;
- provide that regulations to be made under primary legislation may
incorporate rules or standards of other bodies as in force from time
to time;
- require subordinate legislation to be tabled and subject to disallowance,
but with a disallowance period so short that Parliament may not be able
to scrutinise it properly; or
- give a Minister or other person the ability to issue guidelines, directions
or similar instruments influencing how powers granted under a law are
to be exercised without any obligation for them to be tabled in Parliament
or without them being subject to disallowance.
Not tabled or not subject to disallowance
6.3 This issue did not arise during the 38th Parliament, other than in
relation to the Legislative Instruments Bill 1996, discussed at para 6.29
and following.
Incorporating material as in force from time to time
6.4 Section 49A of the Acts Interpretation Act 1901 lays down
a general rule that allows a regulation to adopt or incorporate material
external to it and to give it the force of law. Where the material adopted
is not itself an Act or a regulation, the general rule allows for its
adoption in the form that it exists at the time of its adoption, but not
“as in force from time to time”.
6.5 There are a number of reasons for imposing such a general rule. Without
it, a person or organisation outside the Parliament may change the obligations
imposed by a regulation without the Parliament's knowledge, or without
the opportunity for Parliament to scrutinise and (if so minded) disallow
the variation. In addition, such a rule also encourages more certainty
in the law, and ensures that lawmakers bear the onus of ensuring that
those obliged to obey a law have adequate access to its terms. While this
is a general rule, it may be ousted by a statement of contrary intent
in an Act.
6.6 In Alert Digest No 3 of 1997, the Committee considered certain
provisions of the Aviation Legislation Amendment Act (No 1) 1997.
These provisions inserted new subsections 132(3A) and 133(3A) in the Airports
Act 1996. These new subsections authorised regulations to apply, adopt
or incorporate any matter contained in a standard proposed or approved
by the Standards Association of Australia (SAA), “being a standard
as in force or existing from time to time”.
6.7 The Committee noted that contraventions of the regulations were punishable
by penalties of up to 250 penalty units (at the time, $25,000), and these
regulations could be changed without either Parliament or those obliged
to comply with them being aware of the change.
6.8 The Minister advised the Committee that:
- the adoption of SAA standards as they exist from time to time “is
a well accepted principle of regulation making”;
- the approach proposed in sections 132 and 133 was consistent with
that taken elsewhere in the Act, and elsewhere in other Commonwealth
legislation (for example, in the Air Navigation Act 1920 and
the Motor Vehicle Standards Act 1989);
- the standards to be incorporated were only those approved by the SAA,
which is a reputable organisation and recognised as the peak standards
body in Australia;
- before SAA standards are introduced they undergo a considerable period
of development and consultation to ensure “stakeholder equity”
in the completed standard;
- the standards to be incorporated concerned routine and uncontentious
technical matters, including evidentiary matters such as testing methods,
guidance to administrative decision makers and defining technical terms
by reference – criminal liability would not depend on these standards;
and
- SAA standards were updated regularly, and, given their widespread
acceptance, it seemed appropriate, logical and less confusing to incorporate
the most recent version of a standard rather than requiring people to
comply with an outdated version until such time as the standard was
identified and an amending regulation prepared.
6.9 Notwithstanding this advice, the Committee continued to have several
concerns. While acknowledging the good standing of the SAA, and the convenience
of incorporating standards as in force from time to time, the Committee
pointed out that this mechanism took away Parliament's ability to supervise
the legislative power which it had delegated to the Executive. It also
meant that Parliament could not stop the imposition of a standard of which
it disapproved. It also meant that not all of those obliged to comply
with a changed standard would necessarily know that it had been changed.
6.10 Finally, the Committee was concerned that there had been a misunderstanding
of what it was seeking. As noted above, section 49A of the Acts Interpretation
Act 1901 enables the adoption of material as it exists at the time
of the adoption. Each time a standard is altered, a regulation could be
made deleting the reference to the old standard and substituting a reference
to the new one. An alternative approach could be to table a notice in
both Houses stating that an incorporated document had been changed, together
with a copy of the amended document.
6.11 Notwithstanding that the Bill had been passed by both Houses (and
had received Royal Assent on 17 April 1997), the Committee continued to
draw Senators' attention to this provision. [1]
Insufficient time
Example: Primary Industries and Energy Legislation Amendment Bill
(No 1) 1996
6.12 In Alert Digest No 1 of 1996, the Committee noted that this
Bill proposed to insert a new subsection 9(5) in the Wool International
Act 1993. This provision would limit the time for disallowance of
a ministerial instrument under proposed subsection 9(4) to three sitting
days (rather than the usual 15 sitting days).
6.13 The Minister advised that a three day period had been chosen “to
ensure Wool International can take full advantage of any commercial opportunities
as they arise”.
For example, if Wool International wanted to make a commercial decision
or enter into a commercial venture within a tight commercial timeframe,
and I was disposed to approve of the proposal, then waiting fifteen sitting
days could prejudice achievement of the commercial objective … a
mandatory fifteen day disallowance period might actually mean an even
longer period if fifteen sitting days are not available before a parliamentary
session concludes. The commercial opportunity might then be no longer
available. [2]
6.14 The Committee thanked the Minister for this response. While acknowledging
that commercial opportunities might be lost, the Committee nevertheless
remained concerned at the dilution of the opportunity for Parliamentary
scrutiny. Whether a proper balance between commercial advantage and adequate
scrutiny was struck by restricting the opportunity for disallowance to
three days was a matter for ultimate resolution by debate in the Senate.
The Committee continued to draw the provision to Senators' attention.
6.15 Ultimately, an amendment was moved to proposed subsection 9(4),
but this was negatived in the Senate.
Quasi-legislation
6.16 The Committee draws attention to provisions which give power to
a particular person or body to issue guidelines, directions or similar
instruments which determine the way authority given under an Act of Parliament
is to be exercised. The Committee usually suggests that such instruments
be tabled in Parliament and, where appropriate, be disallowable by either
House.
6.17 In considering whether a particular piece of legislation comes within
the fourth criterion of its terms of reference, the Committee must resolve
whether the power the bill delegates is legislative in nature, or bears
some other character. Where the power delegated is administrative in nature,
the bill does not come within the criterion. Where the power delegated
is legislative in nature, the Committee must decide whether or not the
legislation establishes a sufficient regime of scrutiny over the exercise
of that power.
6.18 The Committee sets out its views about appropriate levels of Parliamentary
scrutiny over guidelines, directions and similar instruments on a case-by-case
basis. What is appropriate will depend on the particular issues raised
by each piece of legislation.
Some examples
6.19 On a number of occasions the Committee accepted that instruments
were administrative rather than legislative in character. This approach
was based on a distinction drawn by Latham CJ in Commonwealth of Australia
v Grunseit (1943) 67 CLR 58. In that case, his Honour held that legislation
determines the content of the law as a rule of conduct or a declaration
as to power, right or duty, whereas executive authority applies the law
in particular circumstances.
6.20 Instances in which the Committee accepted that particular instruments
were administrative included:
- determinations that certain financial investments were not to be regarded
as financial assets for the purposes of a deeming test under a Youth
Training Allowance Bill; [3]
- guidelines affecting (but not setting) fees to be charged to certain
undergraduate and postgraduate students, and clarifying vocational courses
for which fees might be charged by the Australian Maritime College;
[4] and
- instruments made under the Commonwealth Rehabilitation Service Reform
Bill 1998, clause 18 of which specifically provided that no such instruments
were to be legislative instruments for the purposes of the Legislative
Instruments Act 1998. [5]
Example: Judiciary Amendment Bill 1997
6.21 This Bill was introduced to part implement the Government's policy
of opening up the doing of Commonwealth legal work to private solicitors.
As a result, there is now competition between private lawyers, and between
private lawyers and the Australian Government Solicitor (AGS), for this
work.
6.22 In Alert Digest No 17 of 1997, the Committee noted that,
among other things, the Bill proposed to establish the Australian Government
Solicitor as a separate statutory authority, and conferred on the Attorney-General
a power to issue Legal Services Directions relating to the performance
of Commonwealth legal work – whether performed by a person under
the control of the Commonwealth or by some other person. It appeared to
the Committee that these Directions might be legislative in character,
yet the Act made no provision for their disallowance under the Acts
Interpretation Act 1901.
6.23 The Attorney-General advised the Committee that Legal Services Directions
would be capable of applying either generally to Commonwealth legal work,
or to specific legal work being performed in relation to a particular
matter:
The Government considers it appropriate for Legal Services Directions
that are legislative in character (these are most likely to be the Directions
of general application) to be subject to Parliamentary scrutiny. When
the Bill was drafted it was expected that Directions of a legislative
character would be subject to Parliamentary scrutiny under the Legislative
Instruments Bill. The Government remains of the view that this would be
the most effective process for subjecting Directions of a legislative
character to effective Parliamentary scrutiny. [6]
6.24 The Committee thanked the Attorney-General for this response, noting,
however, that the process favoured for effective scrutiny of Legal Service
Directions depended on provisions in the Legislative Instruments Bill,
which had been in existence in various forms since 1994, but which had
not yet become law. As an interim measure, until the passage of that bill,
the Committee favoured parliamentary scrutiny of Legal Service Directions,
and continued to draw Senators attention to the provisions. In the event,
the Bill lapsed with the dissolution of the 38th Parliament.
Legislative Instruments Bill 1996
6.25 In its Report on The Work of the Committee during the 37th Parliament,
the Committee canvassed various provisions in the Legislative Instruments
Bill 1994, which was debated but not passed during that Parliament. A
bill of the same name was introduced in the 38th Parliament, and the Committee
again drew attention to a number of its provisions which seemed to insufficiently
subject the exercise of legislative power to Parliamentary scrutiny.
Conclusively determining whether an instrument is legislative
6.26 Clause 8 of the bill provided that the Attorney-General might issue
a certificate to clarify definitively whether or not an instrument was
legislative in character. This certificate was subject to judicial review
(unlike a similar provision in the 1994 Bill). The Committee observed
that, in its Fifteenth Report of 1994, it had endorsed a recommendation
of the Senate Regulations and Ordinances Committee that these certificates
be also subject to disallowance by the Parliament. The previous Government
had proposed to amend the 1994 Bill to provide explicitly for parliamentary
disallowance. As the current bill left the matter unclear, the Committee
sought the Attorney's advice.
6.27 On this issue, the Attorney-General responded that having two review
mechanisms would create too much uncertainty. “The certificate is
in essence a legal opinion to which ADJR review is appropriate and disallowance
is not”. [7] The Committee thanked the
Attorney for this explanation.
Exempting national scheme instruments from scrutiny
6.28 The Committee commented on subclause 61(7) of the bill, which exempted
certain legislative instruments from disallowance. These were instruments
made to facilitate the establishment or operation of an inter-governmental
body or scheme involving the Commonwealth and one or more of the States.
6.29 The Committee expressed concern that subclause 61(7), if enacted,
might be considered to generally approve the removal from Parliamentary
scrutiny of subordinate legislation which relates to national schemes
of legislation. Primary legislation establishing such schemes originated
from decisions of ministerial councils, and might itself put proper Parliamentary
scrutiny at risk.
6.30 The Committee acknowledged the benefits of national schemes of legislation.
However, “the norm should be that all subordinate legislation should
be subject to Parliamentary scrutiny”. Precluding scrutiny by Parliament
should occur only where “just and weighty reasons” warranted
it. Each case should be assessed on its merits.
6.31 On this issue, the Attorney-General responded saying that the Committee's
views on this provision were presumably founded on the Regulations and
Ordinances Committee's pending report about the Scrutiny of National Scheme
Legislation. The Attorney continued that “to remove the exemption
for national scheme legislation at this time would be premature without
knowing the rationale for the [Regulations and Ordinances] Committee's
approach and whether implementation of the Committee's report is desirable”.
[8] Further, clause 72 of the bill provided specifically
for issues arising from national scheme legislation to be considered in
the course of the review of the operation of the legislative instruments
legislation.
6.32 However, the Committee questioned why this provision had been included
in the bill.
The response suggests that to `remove the exemption for national scheme
legislation at this time would be premature'. The committee, however,
points out that no such general exemption exists and the reason that the
committee objects to the subclause is that it will mislead people into
thinking that a general exemption exists as it apparently has already
done on this occasion. [9]
6.33 Subsequently, the Attorney-General responded further, stating clause
61(7) did not establish a general rule that subordinate legislation relating
to national schemes of legislation should not be subject to Parliamentary
review and disallowance. Rather, the clause recognised that any present
or future scheme of legislation might require scrutiny and disallowance.
However, if, in enacting the enabling legislation for a national scheme,
the Parliament has considered and rejected the parliamentary review and
disallowance of subordinate legislation then it was inappropriate for
that issue to be reconsidered when the subordinate legislation was actually
made. [10]
6.34 The Committee thanked the Attorney-General and looked forward to
working with him to resolve this issue.
Exempting proclamations under the Flags Act from scrutiny
6.35 Clause 61(8) provided that certain legislative instruments were
to be exempt from Parliamentary scrutiny. Among the exemptions were proclamations
under section 5 of the Flags Act 1953. The Committee sought the
advice of the Attorney on why Parliament should be denied a power of disallowance
in this instance.
6.36 On this issue, the Attorney-General responded:
The basis for that provision was that to provide for disallowance and
sunsetting of Proclamations for flags could be seen as discriminatory
as most authorised flags are not required to be authorised by Proclamation
but by other methods. There are currently only four Proclamations under
the section to deal with flags for the Defence Services and the others
for the Indigenous Communities. [11]
Instruments that are not legislative instruments
6.37 Schedule 1 to the bill listed certain instruments and provided that
they were not to be legislative instruments for the purposes of the legislation.
Item 14 provided that certain instruments might be included in this list
by being prescribed.
6.38 The Committee noted that this provision had not been included in
the 1994 Bill. It appeared that Item 14 instruments might include Determinations
under the Public Service Act 1922, the Defence Act 1903
and the Remuneration Tribunal Act 1973, which were currently disallowable.
While the Committee acknowledged that the regulation which prescribes
such determinations as Item 14 instruments was itself disallowable, this
was not a satisfactory safeguard as a period of months could elapse between
the coming into effect of the regulation and its disallowance.
6.39 On this issue, the Attorney-General responded that “accountability
in relation to the Government as an employer should be in the industrial
relations arena”, and that the exemption from scrutiny was appropriate
at this time, but would be re-considered as part of the subsequent review
of the legislation. [12]
6.40 However, the Committee's basic concern with the clause was that
it removed these instruments from Parliamentary scrutiny. It was not a
question of removing an exemption, because “at this time these instruments
are not exempt from Parliament's scrutiny; it is the bill that proposes
to exempt them”.
If these instruments were not legislative in character but individual
decisions applying the law, the committee would agree that an industrial
tribunal or court would be the appropriate forum for review. But as they
re legislative instruments representing the exercise of the Parliament's
legislative power which has been delegated to the executive why should
not the Parliament oversee what is done in its name? [13]
6.41 Subsequently, the Committee received a copy of a letter from the
Minister for Industrial Relations to the Senate Standing Committee on
Regulations and Ordinances on this issue. In that letter, the Minister
stated that it was not the Government's intention that the Legislative
Instruments Bill should have the effect of changing the current position
with regard to the tabling and disallowance of instruments such as determinations
under section 82D of the Public Service Act 1922 or section 58B
of the Defence Act 1903.
6.42 Accordingly, the Minister advised that the Government would introduce
amendments to the bill to “remove certain public sector instruments
from the requirements of the bill, but to preserve the opportunity of
disallowance in relation to instruments which are currently disallowable”.
[14]
Application of the bill to the rules of federal courts
6.43 Clause 7 of the bill provided generally that the rules of federal
courts were not legislative instruments for the purposes of the legislation.
Schedule 4, however, provided that the bill, with some exceptions, was
to apply to those rules as if they were legislative instruments. Schedule
4 also provided that those provisions which were to apply as court rules
were capable of being modified or adapted by regulations made under the
Acts which regulate those courts.
6.44 There were two exceptions to the power of these regulations to modify
the primary legislation. First, the Rules of the Federal Court, the Industrial
Relations Court and the High Court must provide a procedure for consultation
before a rule directly affecting business is made. Second, the regulations
were not to modify the provisions of Part V of the bill which regulated
the scrutiny of legislative instruments.
6.45 The Committee was of the view that it would be possible, for example
by modifying proposed section 48, to exclude the Court Rules from having
to be registered. This would have the effect of excluding the Rules from
Parliamentary scrutiny, as Part V operates only in respect of registered
instruments.
6.46 On this issue, the Attorney-General observed that:
While the proposed amendments to the enabling legislation of each of
the federal courts is broadly stated it is also specifically provided
that any modification made cannot affect the requirement to comply with
Part 5 of the Bill ie the scrutiny of the legislative instrument. I note
further that any modification is to be made by regulation and if the Parliament
is not satisfied with the proposed modifications it can disallow the regulations.
[15]
6.47 While thanking the Attorney for this response, the Committee reaffirmed
its view that, while one part of the bill exhibited an intention that
Court Rules be subject to parliamentary scrutiny, the bill as it stood
provided an avenue to prevent that scrutiny. Therefore, the Committee
continued to draw the Senate's attention to these provisions. Subsequently,
the Attorney-General further responded that, given that the Committee
remained troubled by the possibility that federal court rules might be
removed from Parliamentary scrutiny, he was considering an amendment to
the bill that would make it clear that such a situation could not arise.
[16]
6.48 In the event, the bill was not passed during the 38th Parliament.
Footnotes
[1] Scrutiny of Bills Committee, First to
Nineteenth Reports of 1997, pp 128-131.
[2] Scrutiny of Bills Committee, First to
Thirteenth Reports of 1996, p 29.
[3] Scrutiny of Bills Committee, First to
Thirteenth Reports of 1996, pp 4-7.
[4] Scrutiny of Bills Committee, First to
Eleventh Reports of 1998, pp 47-8.
[5] Scrutiny of Bills Committee,
First to Eleventh Reports of 1998, pp 128-9.
[6] Scrutiny of Bills Committee, First to
Eleventh Reports of 1998, p 5.
[7] Scrutiny of Bills Committee, First to
Thirteenth Reports of 1996, p 136.
[8] Scrutiny of Bills Committee, First to
Thirteenth Reports of 1996, p 137.
[9] Scrutiny of Bills Committee, First to
Thirteenth Reports of 1996, p 138.
[10] Scrutiny of Bills Committee, First
to Nineteenth Reports of 1997, p 65.
[11] Scrutiny of Bills Committee, First
to Thirteenth Reports of 1996, pp 138-9.
[12] Scrutiny of Bills Committee, First
to Thirteenth Reports of 1996, p 139.
[13] Scrutiny of Bills Committee, First
to Thirteenth Reports of 1996, p 140.
[14] Scrutiny of Bills Committee, First
to Nineteenth Reports of 1997, pp 139-40.
[15] Scrutiny of Bills Committee, First
to Thirteenth Reports of 1996, p 141.
[16] Scrutiny of Bills Committee, First
to Nineteenth Reports of 1997, p 69.