Michael Keenan (Stirling, Liberal Party, Shadow Minister for Justice, Customs and Border Protection) Share this | Hansard source

The Financial Framework Legislation Amendment Bill (No. 3) 2012 is presented by the Attorney-General as an urgent response by the government to the High Court's decision in Williams v The Commonwealth, which was handed down last Wednesday. That decision found that funding for the National School Chaplaincy and Student Welfare Program, which the opposition strongly supports, was beyond the executive power of the Commonwealth because it was not supported by an act of parliament and was therefore not a valid exercise of the executive power of the Commonwealth under section 61 of the Constitution.

I should stress that the only Commonwealth program which the High Court's decision invalidated was the chaplaincy program. However, the language and reasoning of those justices who comprised the majority in the Williams decision have potentially far-reaching implications for other Commonwealth programs which rely upon the exercise of executive power without appropriate statutory authorisation.

The solution proposed by the government is to amend the Financial Management and Accountability Act 1997 to provide for the validation of a large number of Commonwealth programs and grants. This is proposed to be done by regulation. In all, some 11 types of Commonwealth financial assistance grants and some 416 programs providing for the payment of Commonwealth moneys is set out in the draft regulation, with which the opposition has only just been supplied. I should say at once that the opposition has grave concerns about the legal validity of this approach which the government has adopted. I should also record that the request by the shadow Attorney-General, Senator Brandis, to be provided on a confidential basis with a copy of the Commonwealth's legal advice was refused by the Attorney-General.

The opposition's concerns relate to the method adopted by the bill, the essence of which is to insert into the Financial Management and Accountability Act a new section, section 32B, which purports to validate any grant or payment of Commonwealth moneys which may be identified by regulation. This is done by providing that, if apart from this subsection the Commonwealth does not have the power to make, vary or administer a grant payment and the grant or payment is specified in regulations, then the Commonwealth has the power to make the grant or payment. Eleven forms of grant and 116 categories of program payments are set out in the draft regulation that—again, I stress—we have just been supplied.

The opposition is far from satisfied that this umbrella form of statutory validation is effective to satisfy the constitutional lacuna which the High Court identified in the Williams case. Nor are we satisfied that the proposed section 32B in its application to each particular grant or program payment is supported by any of the section 51 heads of power, although in respect of many grants or payments it may be.

The whole point of the Williams case was to decide that the executive cannot spend public money without legislative authority and parliamentary scrutiny, and it seems to the opposition hardly sufficient to meet the test which the majority of the justices prescribed for valid expenditure to specify a schedule of grants and payments and merely declare them to be valid.

The approach adopted is particularly inapt, given the programs are to be specified merely by regulation. It was the fact that the chaplaincy program was established only by executive order which resulted in its invalidity. It seems, in short, that there is an element of circularity in the Commonwealth's legal reasoning. To make matters even worse, the power to make regulations, which will bring particular programs within the general validation provisions of the proposed section 32B, may themselves, as a result of the proposed section 32D, be delegated by the minister to an official in any agency, which means in effect any public servant no matter how junior.

The government's response to a High Court decision to invalidate a particular program because it was established by executive action rather than legislation is to say that all programs are validated so long as they are identified in a regulation and that regulation does not even have to be made by a minister but can be delegated to any officer of any agency. This hardly seems to us to be an adequate response. Our preliminary view is that it does not overcome the constitutional problem identified in the Williams case. Nor is the opposition satisfied with the manner in which the government has dealt with us in seeking to address this issue. Although the High Court handed down its decision last Wednesday, the first approach to the opposition by the government was yesterday, some three working days after the judgment, when the Attorney-General invited the shadow Attorney-General to a briefing after question time and outlined in broad terms the approach the government was proposing to take. It was at that meeting that the shadow Attorney-General's request to examine the government's legal advice was refused. We understand and accept that ordinarily the government does not provide its legal advice to the opposition even on a confidential basis, but this should be a bipartisan matter. The very purpose of the briefing was to request bipartisanship, which the opposition is very ready to extend. On other recent occasions when the government has sought bipartisanship from the opposition following a High Court decision striking down important legislation or executive decisions—for instance, the finding that the Australian Military Court was ultra vires in Lane v Morrison in 2009, or in respect of draft offshore processing legislation following the decision in the Malaysia solution case last year—the government either gave the opposition access to its legal advice or actually published it. The opposition fails to understand why a government seeking a bipartisan solution to a problem which has arisen not from a political controversy but from a High Court decision would decide to take a different course in this particular case.

When Senator Brandis met the Attorney yesterday afternoon, the opposition was promised a draft bill by late yesterday evening or early this morning. In the event, an initial draft was received just before 9 am this morning. It was replaced later in the morning by another draft which contained certain important differences. Neither the shadow cabinet nor the opposition's leadership group has had a chance to examine the draft. Prior to the introduction of the bill by the Attorney-General a few minutes ago, the opposition had yet to see a final iteration of this bill. As a result, the opposition is effectively going into this debate blind, having had only a matter of hours to consider the draft legislation and therefore not having had the opportunity to consider each of the more than 400 categories of grants and payments to which it applies and not having had the opportunity of examining the legal advice underpinning the government's approach, which seems to us, on the preliminary view of the shadow Attorney-General, to be, for the reasons I have already mentioned, an inadequate response to the High Court's judicial reasoning.

Notwithstanding all of this, the opposition understands the government's desire to move urgently in order to validate these various grants and program payments. Notwithstanding our serious doubts about the legal efficacy of the government's approach and our disappointment that the government—whether through contempt of the parliament or just sheer incompetence—did not engage the opposition days earlier and give us the opportunity to consider our response with appropriate care, we will not stand in the way of the government's attempts to deal, at least in a preliminary way, with the consequences of the decision. Therefore we will not oppose the bill.

The opposition supports most of the programs set out in the draft regulation, including, of course—very strongly—the chaplaincy program itself. A number of them, however, we do not. In the time available it is simply not possible to seek to excise those programs which we do not support from the legislation. However, I wish to place upon the record that the opposition's preparedness to allow this bill an expedited passage through the parliament should not be taken as support for every single program specified in it.

Furthermore, for reasons I have already mentioned, the opposition doubts that this bill is effective to satisfy the requirements set out by the High Court in the Williams case. Each of the particular programs set out in the draft regulation will need to be examined and, it may be, in many if not all cases provided with a surer legislative basis than this bill creates. For that reason, I foreshadow that we will move an amendment to the bill to insert a sunset clause so that its effect will expire on 31 December this year. That will give the government and the opposition a period of several months to consider the matter more carefully in light of the High Court decision and bring back to the parliament a more carefully considered and comprehensive bill which deals properly with the constitutional issues raised by the High Court in respect of particular grants and program payments.

I might just take a minute to outline the sorts of concerns we have with this legislation. As I have highlighted in my speech, we only just received the final iteration of this bill—literally 15 minutes ago as it was tabled in the parliament by the Attorney. I have mentioned that it deals with 116 different programs, but of course it actually deals with substantially more programs than that, because the payments themselves are essentially headings that sit over an enormous number of programs underneath. I might just point to one in particular: 412.002, 'Payments to International Organisations'. This is not structured into any further subheadings. It just says, broadly, 'payments to international organisations' and then says:

Objective: To advance Australia’s foreign, trade, economic, and security interests through membership and participation in international organisations and their various peacekeeping activities.

How could that possibly be drafted any more broadly than that? This is the problem that we are in. We understand the government's desire to do this, and indeed we support the government's attempts to validate the chaplaincy program in particular but, because of the government's actions—surely there must have been a better way of dealing with the opposition on this matter if they were serious about getting the parliament to deal with it in such an expedited way—and the way they have approached it, it is very difficult for us just to accept at face value what we have been told by the government. That is why we seek to move that sunset clause: so the parliament can deal with it in an expedited manner but then we can have a more comprehensive engagement with the government about how we might deal with these matters in a way that we believe will be more effective.

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