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       The Legislative Instruments Act 2003 defines the term ‘legislative instrument’ and provides 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       Despite the definition of legislative instrument in section 5 of the Legislative Instruments Act, it can be difficult to determine the status of instruments. Drafting Direction No. 3.8 Subordinate Instruments, from the Office of Parliamentary Counsel, sets out a policy that the status of instruments as legislative or not should be expressly dealt with in legislation.

6.5       As pointed out in the Committee’s Second Report of 2005, one problem arising from the inclusion in bills of provisions that expressly state that an instrument is not a legislative instrument lies in determining 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. The Committee expects this issue to be addressed in the explanatory memorandum and, where a provision is a substantive exemption, the Committee expects to see a full explanation justifying the need for the provision.

Example: Higher Education Endowment Fund Bill 2007

6.6       In Alert Digest No. 11 of 2007, the Committee commented on subclauses 13(3), 14(2), 15(4) and 45(5) of this bill, each of which provided that a Ministerial determination or authorisation referred to elsewhere in the respective clause was a legislative instrument, but was not to be subject to disallowance under section 42 of the Legislative Instruments Act 2003. In each case, the explanatory memorandum stated that the determination or authorisation, as a Ministerial direction or authorisation, was not disallowable ‘and this policy decision to exempt the instrument from the operation of the disallowance provisions has the approval of the Attorney-General.’

6.7       Similarly, subclause 47(7) provided that the Maximum Grants Rules to be made under subclause 47(1) were legislative instruments but were not to be subject to disallowance. Once again the explanatory memorandum advised that the rules were not disallowable and that ‘this policy decision to exempt the rules from the operation of the disallowance provisions has the approval of the Attorney-General.’

6.8       The Committee noted that item 41 in the table in subsection 44(2) of the Legislative Instruments Act 2003 provides that ‘Ministerial directions to any person or body’ are not subject to disallowance. The instruments referred to in subclauses 13(3) and 14(2) appeared to fall within this category and the explanatory memorandum indicated that this was the case. Given this, the Committee was unclear as to why the explanatory memorandum to the bill stated that this was a ‘policy decision’ which had the ‘approval of the Attorney-General.’ This seemed to imply that the instruments were being made exempt from disallowance not because they were ministerial directions, but for some other ‘policy’ reason. The Committee sought clarification from the Minister in respect of this matter.

6.9       In relation to the remaining subclauses, the Committee noted the advice in the explanatory memorandum that these instruments, while legislative in character, were not to be subject to disallowance because of a ‘policy decision to exempt’ them, which had the ‘approval of the Attorney-General.’ The Committee noted, however, that while the Legislative Instruments Act 2003 provides for the Attorney-General to issue a certificate determining whether an instrument is a legislative instrument or not, it makes no provision for him or her to ‘exempt’ a determination from that Act.

6.10         The Committee sought the Minister’s advice regarding the rationale for exempting each of the instruments referred to in subclauses 15(4), 45(5) and 47(7) from disallowance and whether these explanations could be included in the explanatory memorandum.

6.11         In respect of subclauses 13(3) and 14(2), the Minister for Education, Science and Training advised the Committee that clause 13 of the bill provides for the initial credit of funds to the Higher Education Endowment Fund (HEEF), while clause 14 provides for subsequent credits to the fund, and that:

As these determinations merely provide a mechanism for transferring the funds required to establish the HEEF and for future transfers to the HEEF, such instruments are not appropriate to be disallowable as a matter of policy because they are “one-off” instruments made when funds are about to be transferred.[1]

6.12         The Minister noted that, although the explanatory memorandum made reference to ‘ministerial directions’, the subclauses did not rely on any characterisation of the determinations they relate to as ‘ministerial directions’ to provide exemption from disallowance.

6.13         In respect of subclause 15(4), the Minister advised that clause 15 provided for the HEEF to accept gifts of money under certain circumstances and that:

I believe no public policy interest would be served by allowing for the disallowance of a gift to the HEEF once it has already been made (which would be the position in most cases).[2]

6.14         Similarly, the Minister argued that no public policy interest would be served by making an instrument approving grants to particular institutions under clause 45, disallowable.

6.15         Finally, regarding the Maximum Grant Rules under clause 47, the Minister argued that these were analogous to the Investment Mandate made by the responsible Ministers under the Future Fund Act 2006, which is a non-disallowable instrument.

6.16         In respect of the way in which these exemptions from disallowance were portrayed in the explanatory memorandum, the Minister advised that:

the explanatory memorandum should not have referred to “ministerial directions” as the basis for the instruments under subclauses 15(4), 45(5) and 47(7) being disallowable and the explanatory memorandum could also have more fully explained the rationale for disallowance. Although the Attorney-General did give policy approval for the instruments under Clauses 13, 14, 15, 45 and 47 of the Bill to be exempt from disallowance, this was not relevant to the operation of subclauses 13(3), 14(2), 15(4), 45(5) and 47(7) and should not have been referred to in the explanation of those provisions in the explanatory memorandum.[3]

6.17         The Committee thanked the Minister for this response, noting that it would have been helpful if this information had been included in the explanatory memorandum. The Committee continued to express concern regarding the reference to the Attorney-General giving ‘policy approval for the instruments...to be exempt from disallowance’ as the Committee was not aware of the legislative basis for such approvals being provided.[4]

Example: Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Bill 2007

6.18         The issue of explanatory memoranda claiming that the Attorney-General had provided an exemption for a legislative instrument from the usual tabling and disallowance provisions of the Legislative Instruments Act also arose in the context of this bill.[5]  

6.19         Subsections 70B(16) and 70E(20) of the bill provided that determinations made under other subsections of sections 70B and 70E, were not legislative instruments. These determinations would impose temporary restrictions on the rights of any person to enter or remain on roads in vested Aboriginal land, or within Aboriginal community land, respectively. The explanatory memorandum stated that the reason for these determinations not being legislative instruments was that the:

Attorney-General has granted an exemption from the Legislative Instruments Act on the basis that the restrictions will be temporary in nature and may need to take effect on short notice.

6.20         The Committee sought advice from the Minister on these and a number of related provisions in the bill.

6.21         The response from the Minister for Families, Community Services and Indigenous Affairs reiterated that:

The Attorney-General has granted an exemption for these determinations from the Legislative Instruments Act. The basis for these exemptions is that the determinations are only temporary in nature and will often need to take effect on very short notice, particularly where the restrictions are put in place to protect public health and safety. In these circumstances it would not be appropriate for the determinations to be subject to the Legislative Instruments Act.[6]

6.22         The Committee thanked the Minister for this response but noted that the fact that an instrument was temporary in nature and needed to take effect on short notice was irrelevant to whether or not it was considered to be a legislative instrument, as defined in section 5 of the Legislative Instruments Act 2003. The Committee also noted that while the Legislative Instruments Act provides for the Attorney-General to issue a certificate determining whether an instrument is a legislative instrument or not, it makes no provision for him or her to ‘exempt’ a determination from that Act. 

6.23         The Committee sought the Minister’s further advice, however, no response had been received by the time the 41^st Parliament was prorogued.

6.24         The Committee remains firmly of the view that Parliament is responsible for determining whether a legislative instrument should be exempt from the disallowance provisions of the Legislative Instruments Act 2003. The fact that the Attorney-General may have endorsed a policy decision to exempt an instrument is largely irrelevant. In order for the Committee and the Parliament to satisfy themselves that it is appropriate for an instrument to be exempt from disallowance, they need to understand the rationale behind the policy decision. It is, therefore, essential that explanatory memoranda set out the reasons for any proposed exemption in sufficient detail to allow the Parliament to make an informed decision.

Incorporating material ‘as in force from time to time’

6.25         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’.

6.26         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: Aviation Legislation Amendment (2007 Measures No. 1) Bill 2007

6.27         This bill inserted a number of new provisions in the Civil Aviation Act 1988, which would permit the making of regulations for and in relation to the development, implementation and enforcement of drug and alcohol management plans covering persons who perform, or are available to perform, safety-sensitive aviation activities. The regulations could also provide for drug and alcohol testing of such persons.

6.28         The Committee noted that subsection 98(3) of the same Act provided that any regulations made under the Act could apply, adopt or incorporate any matter contained in a written instrument or other document as in force at a particular time or from time to time. This meant that the regulations that this bill allowed for in relation to drug and alcohol testing could incorporate matter of which the Parliament might be completely unaware.[7] The Committee sought the Minister’s advice regarding why it was considered necessary to be able to incorporate material ‘as in force from time to time’ into these regulations.

6.29         The Minister for Transport and Regional Services responded that the provision allowing the incorporation of material in force from time to time (subsection 98(3) of the Civil Aviation Act 1988) had:

proven to be an effective and efficient means for legislation to incorporate relevant technical standards (such as Australian Standards) that have been developed and published by reputable and recognised bodies and organisations with special expertise.[8]

6.30         The Minister emphasised that such documents were always in written form and the origin of the document was always explicitly identified in the regulations that adopted or incorporated it, so the content of such documents was always ascertainable.

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

Example: Australian Communications and Media Authority Bill 2004

6.32         In Alert Digest No. 12 of 2004, the Committee commented on clause 65 of this bill, which provided that a determination made under clause 64 could apply, adopt or incorporate, ‘(with or without modifications), matter contained in any other instrument or writing whatever’, whether or not that other instrument or writing was in existence at the time of the making of the determination. The explanatory memorandum sought to justify the provision on the bases of administrative efficiency and enhanced flexibility.

6.33         The Committee noted that in considering the precursor to clause 65, section 54A of the Australian Communications Authority Act 1997, it had repeated its long held view that mere administrative convenience could not justify an absence of parliamentary scrutiny. In that instance, however, the Committee had accepted the Minister’s argument that the incorporation of material was not intended to affect policy, but rather to make technical changes.[9] The Committee has taken a similar approach with other relevant legislation.[10]

6.34         In respect of this bill, however, the Committee noted that the explanatory memorandum set out a wide range of examples of materials that could be incorporated and there was nothing to indicate an intention to restrict the matters to be dealt with by incorporation to, for example, technical matters. The only limit on the width of the Australian Communications and Media Authority’s power was that determinations made under clauses 64 and 65 were solely for the purpose of defining expressions used in other determinations.

6.35         The Committee sought the Minister’s advice as to whether this power to incorporate matter in force from time to time might be limited in some way.

6.36         The Minister for Communications, Information Technology and the Arts responded that the rationale for clause 65 was the same as that for section 54A of the  Australian Communications Authority Act 1997, namely that it was intended to:

reduce the administrative load of ACMA so that it would not be required to amend a determination under clause 64 every time an instrument or writing applied, adopted or incorporated in that determination is amended.[11]

6.37         Furthermore, the Minister advised the Committee that:

Clause 65 is not intended to operate so as to affect the policy behind instruments which refer to expressions defined in a determination made under clause 64, but rather to allow for changes and innovation in technology to be reflected in defined expressions without the need for ACMA to constantly amend those expressions.[12]

6.38         The Committee thanked the Minister for this response and, in particular, the assurance that the incorporation of material provided for in clause 65 ‘is not intended to operate so as to affect the policy behind instruments...’ The Committee reiterated, however, that there was nothing in the bill or the explanatory memorandum to indicate that the matters to be dealt with by incorporation would be restricted to, for instance, technical matters. Rather the explanation proffered rested on the avoidance of administrative inconvenience, which the Committee had previously rejected as justification for an absence of parliamentary scrutiny.

6.39         The Committee indicated that:

it would perhaps be of greater assistance to the Committee and to the Parliament generally if assurances of this kind were contained in the explanatory memorandum to the bill in question or, better still, if the provisions of bills were drafted so as to place appropriate constraints on apparently wide-ranging powers. Otherwise the Committee has little option but to engage in correspondence of this nature.[13]

6.40         The Committee made no further comment on the provision.

Example: Australian Sports Anti-Doping Authority Bill 2005

6.41         In Alert Digest No. 1 of 2006, the Committee commented on clause 12 of this bill, which permitted the National Anti-Doping Scheme to apply, adopt or incorporate any matter contained in specified international instruments relating to anti-doping ‘as in force or existing from time to time.’ The explanatory memorandum sought to justify this provision on the basis that the bodies set up by this legislation needed to be able to act quickly to respond to any changes that may be made to the World Anti-Doping Code or an International Standard that had been adopted by the World Anti-Doping Agency.

6.42         While the Committee advised that it may have been willing to accept this justification, it sought the Minister’s advice as to why the adoption of changes made to relevant international instruments should not be subject to Parliamentary oversight and disallowance. The Committee also sought the Minister’s advice about whether agencies could respond just as quickly by making amending regulations that were subject to the usual tabling and disallowance regime.[14]

6.43         The Minister for the Arts and Sport responded that the international instruments in question contained ‘technical and operational aspects of an anti-doping program’ which would be important to maintaining the integrity of Australia’s anti-doping program. The Minister advised that it would not be possible to incorporate changes into new regulations that were subject to the usual tabling and disallowance regime due to the frequency of international competitions and the process involved in making such regulations:

...if such international instruments were set out in full in [the] National Anti-Doping (NAD) scheme, ASADA in accordance with clause 11 of the Bill, would be required to undertake public consultation before it made an instrument under clause 10 that amended the NAD scheme. Essentially, ASADA would be required to publish a draft of the instrument, invite people to make submissions on the draft and consider any submissions that were received within the time limit specified by ASADA when it published the draft. The specified time limit must be at least 28 days after the day of publication, by which time several international competitions could well have been staged.[15]

6.44         The Committee thanked the Minister for this response and noted the apparent conflict between the requirements for public consultation under proposed clause 11 of the bill and the Committee’s longstanding expectation that changes to legislative instruments be subject to Parliamentary oversight and disallowance. The Committee accepted that, in this case, Australia’s anti-doping framework might be best served through the Australian Sports Anti-Doping Authority having the ability to adopt technical amendments to international standards as soon as they come into effect. The Committee made no further comment on this clause.

Insufficient time

6.45         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 41^st Parliament.

Quasi-legislation

6.46         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.

6.47         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 that 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.

6.48         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.

Example: Defence Amendment Bill 2005

6.49         In Alert Digest No. 2 of 2005, the Committee noted that this bill extended the scope of the drug-testing regime to be used by the Australian Defence Force, while at the same time removing aspects of the regime from the legislative instruments scheme. That is, the bill provided for the inclusion of aspects of the drug-testing regime in Defence Instructions, made under section 9A of the Act, which were not required to be tabled and were, therefore, not subject to the scrutiny of the parliament. In contrast, the existing provisions provided for the drug-testing regime to be implemented through regulations.

6.50         The Committee noted that the explanatory memorandum provided no reasons for moving aspects of the scheme from regulations, which were subject to tabling and disallowance, to Defence Instructions, which were not. The Committee sought the Minister’s advice as to the reasons for this change.

6.51         The Minister for Veterans’ Affairs responded that the Defence Instructions ‘are an exercise of prerogative power of the Crown to command and regulate the [Australian Defence Force]’ and that, as such, ‘it would be inappropriate to make them subject to review and disallowance by Parliament.’ However, the Minister reassured the Committee that the Defence Instructions would only deal with the administrative details of the drug-testing regime, such as the procedures for handling and analysing samples and the general conduct of testing. The inclusion of this administrative detail in Defence Instructions would ensure that the procedures in the Instructions could be adjusted rapidly if required by operational needs. 

6.52         The Minister emphasised that:

These Defence Instructions do not define the scope of the prohibited substance testing regime. That has been done by Parliament under the Act and by determinations of prohibited substances and prohibited substance tests by the Chief of the Defence Force. These determinations are legislative in character and will, as legislative instruments, be subject to Parliamentary scrutiny and disallowance.[16]

6.53         The Committee thanked the Minister for this response and agreed that it would be inappropriate to subject Defence Instructions to review and disallowance by the Parliament. The Committee stressed, however, that with reduced parliamentary scrutiny, it would expect Defence to ensure that the detail and effectiveness of these Defence Instructions would be subject to periodic internal review.

6.54         The Committee also noted the Minister’s assurance that the Defence Instructions would only deal with the ‘administrative detail of the regime’ rather than with aspects that were legislative in character. The Committee considered that it would have been useful if the explanatory memorandum had included a more fulsome explanation of the proposed changes.[17] The Committee had no further comment on this aspect of the bill.

Example: Airspace Bill 2006

6.55         In Alert Digest No. 15 of 2006, the Committee noted that subclause 8(1) of this bill required the Minister to make an Australian Airspace Policy Statement. Subclause 8(5) provided that the statement was a legislative instrument but that it was not subject to disallowance or sunsetting. The explanatory memorandum sought to justify the exclusion of the Policy Statement from disallowance on the basis that it would be subject to regular review, which would include ‘a comprehensive consultation process’.

6.56         The Committee indicated its support for policy statements of this type to be subject to appropriate scrutiny, both at the time of their making and subsequently. The Committee noted that the bill required the Minister to consult with two executive agencies prior to making the Policy Statement - CASA and Airservices Australia - but only provided that the Minister may consult any other person or body the Minister considered appropriate. Notwithstanding that there was a commitment in the explanatory memorandum to consult with the Department of Defence when making regulations and other matters that might affect Defence activities, operations or practices, the Committee noted that there appeared to be no requirement in the bill for wider consultation prior to the formulation of the Policy Statement.

6.57         In addition, the Committee considered that it could be argued that consultation, however comprehensive, was not equivalent to the consideration that would be given to the Policy Statement if it were subject to disallowance by the Senate. The Committee also noted that exempting the Policy Statement from the disallowance provisions of the Legislative Instruments Act 2003, gave the Minister an unfettered discretion (within the constraints imposed by subclause 8(2)) to determine the contents of the Statement.

6.58         The Committee sought the Minister’s advice as to whether provision could be made to ensure comprehensive consultation was undertaken prior to the making of the policy statement and, notwithstanding the explanation offered in the explanatory memorandum, whether consideration could be given to subjecting the policy statement to disallowance.[18]

6.59         The Minister for Transport and Regional Services responded that the Australian Airspace Policy Statement was proposed to be non-disallowable ‘for reasons that relate to both the content of the Statement and the level of consultation that will be undertaken on the Statement.’[19]

6.60         In respect of content, the Minister advised that the Statement would not seek to regulate the aviation industry but would provide guidance to the airspace change regime defined in the Airspace Regulations:

The Statement will contain descriptions of processes and a description of Government intent as to how it wants to see airspace managed and where it thinks airspace management should be directed in the future. The Statement will not contain material that would be the basis for disallowance.[20]

6.61         In respect of consultation, the Minister reassured the Committee that:

I will ensure all interested parties are consulted, including the Minister for Defence and the aviation community more broadly: firstly, to have an initial Policy Statement in place for CASA when the airspace regulatory functions are transferred and then to finalise a new statement over the next year as all concerned settle into the new airspace decision making processes. Under the Bill, the Statement will be reviewed, with full consultation, a minimum of every three years thereafter.[21]

6.62         Finally, the Minister indicated concern that, if the Policy Statement was subject to disallowance, it could remain unmade for some time, causing the airspace governance structure envisaged by the Airspace Bill to be incomplete. As such, the Minister indicated that he was not inclined to change the status of the Statement to disallowable.

6.63         The Committee thanked the Minister for this detailed response and for the assurance that all interested parties would be consulted in the framing of the Australian Airspace Policy Statement. The Committee made no further comment on the provisions.

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