Chapter 6 - Insufficient Parliamentary scrutiny of the exercise of legislative power


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 that the Committee 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 that 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 instructions 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       During the 40th Parliament, the Legislative Instruments Act 2003 was enacted. This Act defined the term ‘legislative instrument’ and established a comprehensive regime for the registration, tabling, scrutiny and sunsetting of such instruments. Under this Act all registered legislative instruments are required to be tabled in the Parliament. Legislative instruments are subject to disallowance unless they are exempted under either the Legislative Instruments Act 2003, the primary Act or another Act.

6.4       Where a provision specifies that an instrument is not a legislative instrument, the Committee expects the explanatory memorandum to explain whether the provision is merely declaratory (and included for the avoidance of doubt) or expresses a policy intention to exempt an instrument (which is legislative in character) from the usual tabling and disallowance regime set out in the Legislative Instruments Act 2003. Where the provision is a substantive exemption, the Committee expects to see a full explanation justifying the need for the provision.

Example: Australian National Training Authority Amendment Bill 2003

6.5       In examining this bill, the Committee noted that the (then) current Australian National Training Authority (ANTA) Agreement, which was due to expire on 31 December 2003, was contained in Schedule 1 of the Australian National Training Authority Act 1992. Item 2 of Schedule 2 of this bill provided that the Schedule containing the Agreement was to be repealed and was not to be replaced. The Committee noted that the new Agreement would be tabled in each House of Parliament, however, past practice had been to incorporate each new Agreement in the principal Act by way of an amending bill, thus enabling consideration and debate in each chamber.[1]

6.6       The Committee considered it likely that the Agreement, when concluded, would be legislative in character, otherwise there would have been no need to include past Agreements in the Act. The Committee therefore questioned whether merely tabling the Agreement in both Houses afforded the Parliament an adequate opportunity to scrutinise this exercise of legislative power and sought the Minister’s advice about the reasons for this provision.[2]

6.7       In his response to the Committee of 8 September 2003, the Minister for Education, Science and Training advised the Committee that legal advice from the Australian Government Solicitor was that the Agreement was not legislative in nature as:

...the ANTA Agreement does not determine the content of the law. Instead, it represents an exercise of the power that the Australian Government is granted under section 61 of the Constitution, amongst other things, to enter into agreements or arrangements with the States and Territories on matters of the kind dealt with in the Agreement.

The ANTA Agreement has not been included in Schedule 1 of the Principal Act because it involves an exercise of legislative power, but rather because it has been common to include copies of intergovernmental agreements in schedules to Acts.[3]

6.8       The Minister reiterated that, once the Agreement had been signed by the Australian Government and State and Territory Governments, it would be tabled in both Houses and would also be available on the internet. The Minister concluded that, given the Agreement would be tabled in Parliament and was not legislative in character, the provision removing the Agreement from inclusion in the Australian National Training Authority Act 1992 did not ‘insufficiently [expose] the exercise of legislative power to parliamentary scrutiny.’[4] The Committee thanked the Minister for this response, which addressed its concerns.

Example: Communications Legislation Amendment Bill (No. 3) 2003

6.9       In Alert Digest No. 7 of 2003, the Committee commented on proposed new subsection 38B(27) of the Broadcasting Services Act 1992, to be inserted by item 10 of Schedule 1 of this bill, which would permit the Australian Broadcasting Authority (ABA) to make a determination fixing the date from which a commercial licensee could apply for an additional commercial television broadcasting licence. The Committee noted that it appeared that this power to determine the relevant time was legislative in character, but that there was no provision in the bill for the exercise of this legislative power to be subject to parliamentary scrutiny. The Committee sought the Minister’s advice as to whether the power was legislative in character and, if so, whether it should be subject to parliamentary scrutiny.

6.10         The Minister for Communications, Information Technology and the Arts responded that the power set out in proposed new subsection 38B(27) could be characterised as legislative but that a determination made under the provision should not be subject to parliamentary scrutiny for the following reasons:

  • firstly, subjecting a determination under new subsection 38B(27) to possible disallowance would create considerable uncertainty for the industry and the regulator;
  • secondly, such a determination is a minor procedural measure which does not affect the ABA’s existing powers in a substantial way; and
  • thirdly, such a determination does not change the substantive provisions of section 38B.[5]

6.11         The Committee thanked the Minister for this response, noting his advice that the power conferred by the relevant provision was legislative in nature but that, in the Minister’s view, a determination made under the subsection should not be subjected to parliamentary scrutiny for various reasons.  The Committee reiterated its view that:

...whenever the Parliament delegates legislative power to others it must address the question of how much oversight it should maintain over the delegated power. A bill may insufficiently subject the exercise of delegated legislative power to parliamentary scrutiny by giving a power to make subordinate legislation which is not tabled in the Parliament or, where tabled, is free from the risk of disallowance.[6]  

6.12         In respect of the arguments put forward by the Minister seeking to justify the lack of parliamentary scrutiny, the Committee noted that:

  • the potential for uncertainty applies to all disallowable instruments:

[this] is in fact the price of the administrative convenience implicit in the making of delegated legislation...[and], in itself, does not provide sufficient reason for the Parliament to abrogate its responsibility to properly scrutinise delegated legislation[7]; and

  • it found it difficult to reconcile the Minister’s claim that the measure was a ‘minor procedural matter’ with the concern that the potential for disallowance would cause ‘considerable uncertainty’.

6.13         The Committee reiterated its concern that this provision delegated the responsibility for determining the time for the commencement of the law, which is a legislative function, without provision for parliamentary scrutiny. As such, the Committee continued to draw Senators’ attention to the provision on the basis that it may be considered to insufficiently subject the exercise of legislative power to parliamentary scrutiny.  The Senate did not amend the bill to address the Committee’s concern.

Example: Air Passenger Ticket Levy (Collection) Bill 2001

6.14         In Alert Digest No. 14 of 2001,[8] the Committee commented on clause 22 of the Air Passenger Ticket Levy (Collection) Bill 2001, which permitted the Minister to determine the terms of a scheme for the payment of certain entitlements to former employees of companies in the Ansett group. The Committee noted that the scheme appeared to be legislative in nature, but that the bill made no provision for parliamentary scrutiny of the scheme, nor for the details of the scheme to be publicly notified in any manner.

6.15         In contrast, the Committee noted that clause 23 of the bill, which authorised the Minister to determine how any surplus levy was to be distributed, required the Minister to determine that any surplus be distributed ‘in accordance with a scheme prescribed by the regulations’. Such a scheme would be subject to parliamentary scrutiny and disallowance. The Committee sought the Minister’s advice as to why the scheme for distributing surplus levy was subject to parliamentary scrutiny, while the scheme for distributing the levy itself was not.

6.16         The Minister for Transport and Regional Services advised the Committee that the Government utilised a private sector entity, appointed under contract, to administer the payment of employee entitlements. The Minister indicated that, in order to attract a commercial entity willing and able to perform this role, it was necessary to provide commercial certainty to the contractor. Such commercial certainty would not be available if the determinations were disallowable.

6.17         The Minister also maintained that the scheme was open to parliamentary scrutiny as, by virtue of clause 24 of the bill, the Minister for Workplace Relations was required to provide an Annual Report to both Houses of Parliament regarding the amounts authorised for payment and about the activities undertaken by the private sector entity.[9] 

6.18         The Committee thanked the Minister for this response, but noted that this provision appeared to be another instance ‘where the delegating of a task to a private sector entity has had the result (presumably unintended) of reducing transparency and the capacity for scrutiny.’[10] Notwithstanding that this bill had already been enacted, the Committee continued to draw the Senate’s attention to this provision.

Incorporating material ‘as in force from time to time’

6.19         Section 14 of the Legislative Instruments Act 2003 lays down a general rule that allows a legislative instrument, such as 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’.

6.20         There are a number of reasons for imposing such a 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 requires that lawmakers ensure 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 to the contrary in an Act.

Example: Communications Legislation Amendment Bill (No. 1) 2002

6.21         In Alert Digest No. 7 of 2002, the Committee commented on proposed new section 54A of the Australian Communications Authority Act 1997 (to be inserted by item 1 of Schedule 1 of this bill), which would permit the Australian Communications Authority (ACA) to make determinations by applying, adopting or incorporating matter contained in other instruments as in force from time to time.  The Committee noted that the explanatory memorandum sought to justify this provision on the basis that it would prevent ‘unnecessary administrative work’. The Committee sought the Minister’s advice on the need for the proposed new section.

6.22         The Minister for Communications, Information Technology and the Arts responded that:

This amendment is intended to reduce the administrative load of the ACA, so that it would not be required to amend a determination under section 54 every time instruments or writings referred to in that determination change. It is important to the ACA’s delegated legislation making that it be able to incorporate other instruments by reference (including international technical standards and relevant Australian industry standards) as in force or existing from time to time...

In a technical sense, it is true that the amendment will reduce Parliamentary scrutiny over the minutiae of ACA determinations under section 54 of the ACA Act. However, this is not intended to affect the policy behind such determinations, but rather to allow for change and innovation in the technical details.[11]

6.23         The Committee thanked the Minister for this response, noting that the incorporated material was not intended to affect policy but rather to make technical changes. In respect of the Minister’s advice that the amendment was intended to reduce the administrative load of the ACA, the Committee reiterated previous advice that ‘mere convenience cannot justify an absence of parliamentary scrutiny.’[12]

Example: Student Assistance Amendment Bill 2003

6.24         In Alert Digest No. 8 of 2003, the Committee commented on proposed new subsection 48(2) of the Student Assistance Act 1973, to be inserted by this bill, which would permit the making of regulations under the Act that could ‘apply, adopt or incorporate any matter contained in any instrument or other writing as in force or existing from time to time’. The Committee noted from the explanatory memorandum that the stated purpose of this provision was to ‘eliminate the need to make new regulations under the Act whenever guidelines for the non-statutory ABSTUDY and Assistance for Isolated Children schemes are altered’. However, the Committee was of the view that the new subsection, as drafted, was much broader than this. The Committee sought the Minister’s advice as to why the subsection was drafted in such broad terms and whether it could be expressed to more closely give effect to its avowed purpose.

6.25         The Minister for Education, Science and Training responded that:

  • Section 48 of the Act has the effect of imposing an obligation on beneficiaries of ABSTUDY, Assistance for Isolated Children (AIC) schemes or financial supplementary for tertiary students scheme (SFSS) to notify the Department within 14 days of the happening of a “prescribed event” in accordance with the regulations.
  • Student Assistance Regulations 2003 (the Regulations) were recently made to prescribe these events in relation to the ABSTUDY and AIC schemes.
  • The Regulations did not provide for “prescribed events” in relation to the SFSS because the Government had already decided to close the SFSS. I do not intend to recommend the making of any future regulations to prescribe events relating to the SFSS scheme for the purpose of section 48 of the Act.
  • The Regulations refer to ABSTUDY/AIC Policy Manuals as in force at a particular time. The “Policy Manuals” are the guidelines I approved for these non-statutory schemes. As stated in the Explanatory Memorandum, the proposed new subsection 48(2) would eliminate the need to alter the regulations whenever I update these guidelines. However, under proposed new subsection 48(2) any changes to the guidelines would not alter “the prescribed events” for ABSTUDY/AIC schemes which can only be altered by amending the Regulations.

In summary, as section 48 can only impose an obligation on a person to notify an event where that event is prescribed in regulations (which either House of Parliament may disallow), I do not agree that proposed new subsection 48(2) insufficiently exposes the exercise of legislative power to parliamentary scrutiny.[13]

6.26         The Committee thanked the Minister for this response, which addressed its concerns.

Example: Veterans’ Affairs Legislation Amendment Bill (No. 1) 2002

6.27         In Alert Digest No. 4 of 2002, the Committee commented on a number of items in Schedule 6 of this bill that would enable documents prepared by the Repatriation Commission to ‘apply, adopt or incorporate matter contained in any other instrument or writing whatever’ as in force or existing at a particular time or from time to time, ‘even if the other instrument or writing does not exist when the document or instrument varying the document is made’. The Committee noted that the explanatory memorandum stated that these provisions ‘will provide for more flexibility in the operation of the provisions and will prevent the need for amendments to the instruments when there are changes to the specifications referred to in non-legislative documents that have been incorporated into provisions of the instruments’.

6.28         On 24 April 2002, the Minister for Veteran’s Affairs wrote to the Committee in response to concerns raised by the Veteran Community and prior to the publication of the Committee’s Alert Digest, seeking to clarify the operation of these provisions. A copy of the letter is included in Alert Digest No. 4 of 2002. In that correspondence, the Minister listed a number of instruments that would be able to incorporate non-legislative documents and advised that these instruments were all required to be tabled in Parliament. The Minister indicated that it was envisaged that only two of these instruments would incorporate material ‘as in force from time to time’, but it was considered that the other instruments should also have this facility.

6.29         While noting the Minister’s advice that the instruments involved would be required to be tabled in Parliament, the Committee commented that there was no indication provided as to whether the instruments were disallowable. The Committee also noted the Minister’s advice that the incorporation of documents that ‘do not exist yet’ would be used to incorporate draft or interim documents before they had been formally made. The Committee pointed out, however, that the bill itself did not contain any limitations on the power to incorporate, simply referring to the incorporation of ‘any other instrument or writing whatever’.

6.30         The Committee was of the view that, while the incorporation of non-legislative documents by reference, as and when they may be amended, clearly maximises flexibility in the law, it also maximises uncertainty and minimises scrutiny. As such, notwithstanding the Department’s commitment to make information about amendments available directly to service providers and available generally through its website, the Committee expressed concern about the likelihood that information about the applicable law at any particular time might be open to dispute, to the disadvantage of veterans, particularly where ‘non-existent’ documents were concerned. The Committee also expressed concern that extrinsic material would be incorporated into documents that were not themselves subject to parliamentary scrutiny.

6.31         The Committee sought the Minister’s advice as to whether the instruments listed by the Minister in the letter of 24 April 2002 were disallowable instruments and, if not, why not.

6.32         The Minister responded to the Committee in a letter dated 24 June 2002 advising that:

I have no comments to make and I advise that I will be seeking to have the “incorporation-by-reference items” of the Bill withdrawn.[14]

6.33         The Committee thanked the Minister for this response. The promised amendments were agreed to in the House of Representatives on 27 August 2002.[15]

Insufficient time

6.34         During previous Parliaments, the Committee has considered bills that limited the time for the possible disallowance of certain instruments. For example, in Alert Digest No. 1 of 1996, the Committee considered a provision in the Primary Industries and Energy Legislation Amendment Bill (No. 1) 1996 that limited the time for disallowance of a ministerial instrument to three sitting days (rather than the usual fifteen sitting days). This issue did not arise during the 40th Parliament.

Quasi-legislation

6.35         The Committee draws attention to provisions that give power to a particular person or body to issue guidelines, directions or similar instruments that 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.

6.36         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 under paragraph 1(a)(v) of its terms of reference whether or not the legislation establishes a sufficient regime of scrutiny over the exercise of that power.

6.37         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.

6.38         In Alert Digest No. 8 of 2001,[16] the Committee commented on provisions in the Environment and Heritage Legislation Amendment Bill (No. 2) 2000 [2001] that proposed to insert new sections 324W and 341W in the Environment Protection and Biodiversity Conservation Act 1999. Subsection 324W(1) required the Minister to make principles for managing national heritage and to publish those principles in the Gazette. Subsection 324W(2) stated that the regulations could prescribe obligations to implement or give effect to the principles. Subsection 324W(3) stated that a person must comply with the regulations to the extent that they impose obligations on the person. Subsections (1), (2) and (3) of proposed new section 341W set up a similar scheme for the making and publishing of principles for managing Commonwealth heritage.

6.39         The Committee observed that while the management principles referred to in proposed new sections 324W and 341W had to be published in the Gazette, they were not subject to parliamentary scrutiny. The Committee acknowledged that it might be argued that the principles didn’t need to be subject to parliamentary scrutiny as they were unlikely to be legislative in character, a view supported by subsection (2) of each provision, which permitted the making of regulations by which the principles could be given effect. The Committee noted that such regulations would be subject to parliamentary scrutiny. The Committee argued, however, that there was nothing to prevent any such regulations being expressed in the broadest possible terms, for example, simply stating that a person must comply with the relevant management principle(s). In such a situation, the principles themselves would have legislative effect, but would not be subject to parliamentary scrutiny. The Committee therefore sought the Minister’s advice as to why the principles made under proposed new subsections 324W(1) and 341W(1) should not be subject to parliamentary scrutiny.

6.40         The Minister for the Environment and Heritage responded to the Committee on 20 August 2001, advising that: 

I consider that the setting of management principles by notice in the Gazette is a straightforward and practical way of dealing with a device that is essentially technical in nature. I expect the principles will be based on recognised heritage management benchmarks such as the long-standing and widely accepted Burra Charter for the management of historic heritage.

You will note that proposed new subsection 324W(2) provides that regulations may prescribe obligations or give effect to the national heritage management principles. As your Committee points out, such regulations will be subject to Parliamentary scrutiny. Implementation of the principles in this way is therefore subject to Parliamentary scrutiny.

Your Committee cites an example of a regulation that simply states that a person must comply with the relevant management principles. You argue that this would allow the principles themselves to have legislative effect without Parliamentary scrutiny. However, as indicated above, such a regulation is itself subject to Parliamentary scrutiny. In addition, the Acts Interpretation Act 1901 (section 49) deals with the making of regulations which purport to incorporate by reference another instrument as in force from time to time.

For the above reasons, I do not believe that the principles themselves should be subject to Parliamentary scrutiny. It is sufficient that any regulations giving effect to the principles will be subject to Parliamentary scrutiny.[17]

6.41         The Committee thanked the Minister for this response, noting the burden placed on the Senate’s Regulations and Ordinances Committee to ensure proper scrutiny of regulations made under the legislation. The Committee commented further that:

Proposed section 324W authorises the making of national heritage management principles, and the making of regulations which “may prescribe obligations to implement or give effect to” those principles. The management principles are not subject to Parliamentary scrutiny, but the regulations which implement or give effect to the principles are.

Under such a scheme, there is a danger that a regulation may give effect to a principle, or a group of principles, and those principles may later be changed without the Parliament having an opportunity to scrutinise that change. For example, a regulation may prescribe an obligation to implement Principle No 1 in a set of principles – arguably, this obligation will continue no matter how often that principle may be changed.

The Committee notes that section 49A of the Acts Interpretation Act 1901 provides that regulations may not ‘apply, adopt or incorporate’ any extrinsic material as in force from time to time unless a contrary intention appears. As a matter of interpretation, it is not clear whether regulations which prescribe an obligation to give effect to a principle ‘apply, adopt or incorporate’ that principle within the meaning of the Acts Interpretation Act. In any event, adequate Parliamentary scrutiny should not depend on statutory interpretation.

The national heritage may include places which are on private or indigenous land. Principles for managing the national heritage are matters of significance which would seem to be quasi-legislative in nature...[18]

6.42         In order to ensure adequate parliamentary scrutiny of changes in management principles, the Committee sought the Minister’s further advice as to whether the regulations that implement the principles would be amended whenever the principles were amended. The Committee also sought the Minister’s further advice as to how the management principles would apply on private and indigenous land, particularly where they were inconsistent with land owners’ other statutory responsibilities under Federal, State, Territory or Local Government legislation.

6.43         The Minister responded that, should a change in the principles require the regulations to be amended, this would be done. The Minister also stated that if the Parliament considered the regulations to be too broad or vague in scope, it could disallow them, ‘thus preserving its capacity for appropriate scrutiny.’[19]

6.44         In respect of the application of the management principles on private or Indigenous land, the Minister advised that:

The Bill, along with the existing Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), provides for the Commonwealth to use its best endeavours to prepare and implement a management plan or conservation agreement in cooperation with a State, Territory or person who has a usage right relating to the land. In the matter of inconsistency with State or Territory law, the EPBC Act clearly states that “a conservation agreement has no effect to the extent (if any) to which it is inconsistent with a law of the Commonwealth, or of a State or Territory” (Section 311). In regard to indigenous land, Section 8 of the EPBC Act states that Native title rights will not be affected by the operation of the Act. The system established by the EPBC Act is intended to complement State and Territory environmental laws and provide for the integration of Commonwealth and State regimes. The amendment Bill seeks to preserve this intention.[20]

6.45         The Committee thanked the Minister for this further response.

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