Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I give notice that, on the next day of sitting, I shall move:

That the provisions of paragraphs (5) to (8) of standing order 111 not apply to the Social Security and Other Legislation Amendment (Pension Reform and Other 2009 Budget Measures) Bill 2009, allowing it to be considered during this period of sittings.

I also table a statement of reasons justifying the need for this bill to be considered during these sittings and seek leave to have the statement incorporated into Hansard.

Leave granted.

The statement read as follows—

STATEMENT OF REASONS FOR INTRODUCTION AND PASSAGE IN THE 2009 WINTER SITTINGS

Purpose of the Bill

The bill introduces a range of measures from the 2009 Budget, including measures from the Government’s Secure and Sustainable Pension Reforms package.  The measures in the bill include the following:

• increases to pension rates;
• structural reforms and simplifications, such as providing a new pension supplement and a new seniors supplement to replace a variety of current entitlements;
• revised pension indexation and benchmarking arrangements using, in part, a new Pensioner and Beneficiary Living Cost Index to complement the Consumer Price Index;
• revised pension income test arrangements;
• revised indexation and benchmarking arrangements for certain family tax benefit rates and maternity immunisation allowance;
• provide for adjusted taxable income for the Commonwealth seniors health card to include income salary sacrificed to superannuation; and
• exclude amounts received under certain Western Australian programs from the social security and veterans’ affairs income test starting on 1 July 2009 and ending on 30 June 2012.

Reasons for Urgency

The FTB rates indexation and benchmarking measure is to commence on 30 June 2009 so that the current indexation arrangements that would otherwise occur on 1 July 2009 do not occur.  The measures relating to the Commonwealth seniors health card and the income exclusion for certain Western Australian payments are to commence on 1 July 2009 as part of the Budget strategy.  Passage in the 2009 Winter sittings would enable these measures to be achieved.

Most remaining measures are to commence on 20 September 2009.  To allow the measures to be implemented on that date, Centrelink will need to implement IT processing by the major release scheduled for the weekend of 22 and 23 August 2009.  As such, those measures need to be passed by Thursday 20 August 2009, and enacted by Friday 21 August 2009.

Progressing the bill with top priority during the 2009 Winter sittings will enable the relevant deadlines to be met, thus delivering important and long-awaited increased support to Australian pensioners.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Following the receipt of satisfactory responses, on behalf of the Standing Committee on Regulations and Ordinances I give notice that, on the next day of sitting, I shall withdraw three notices of motion to disallow, the full terms of which have been circulated in the chamber and which I now hand to the Clerk. I seek leave to incorporate in Hansard the committee’s correspondence concerning these instruments.

Leave granted.

The correspondence read as follows—

(1)

ACIS Administration (Commonwealth Financial Assistance) Determination 2009, made under subsections 11(3) and (4) of the ACIS Administration Act 1999.

(2)

Banking (prudential standard) determination No. 3 of 2008, made under subsections 11AF(1) and (3) of the Banking Act 1959.

(3)

Social Security (Administration) (Schooling Requirement) Determination 2009 (No. 1), made under section 124C of the Social Security (Administration) Act 1999.

ACIS Administration (Commonwealth Financial Assistance) Determination 2009

12 March 2009

Senator the Hon Kim Carr

Minister for Innovation, Industry, Science

and Research

Suite M1.48

Parliament House

CANBERRA  ACT  2600

Dear Minister

I refer to the ACIS Administration (Commonwealth Financial Assistance) Determination 2009 made under subsections 11(3) and (4) of the ACIS Administration Act 1999. This Determination specifies automotive and other industry assistance programs for the purposes of the Automotive Competitiveness and Investment Scheme.

The Committee notes that section 17 of the Legislative Instruments Act 2003 directs a rule-maker to be satisfied that appropriate consultation, as is reasonably practicable, has been undertaken particularly where a proposed instrument is likely to have an effect on business. Section 18 of the Act provides that in some circumstances consultation may be unnecessary or inappropriate. The definition of ‘explanatory statement’ in section 4 of the Act requires an explanatory statement to describe the nature of any consultation that has been carried out or, if there has been no consultation, to explain why none was undertaken. The Explanatory Statement that accompanies this Determination makes no reference to consultation. The Committee therefore seeks your advice on whether consultation was undertaken and, if so, the nature of that consultation.

The Committee also seeks an assurance that future explanatory statements will provide information on consultation as required by the Legislative Instruments Act.

The Committee would appreciate your advice on the above matter as soon as possible, but before 24 April 2009, to enable it to finalise its consideration of this Determination. Correspondence should be directed to the Chair, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

Senator Dana Wortley

Chair

15 April 2009

Senator Dana Wortley

Chair

Standing Committee on Regulations and Ordinances

Room SG49

Parliament House

CANBERRA  ACT  2600

Dear Senator Wortley

Thank you for your letter of 12 March 2009 concerning the ACIS Administration (Commonwealth Financial Assistance) Determination 2009 made under subsections 11(3) and (4) of the ACIS Administration Act 1999.

In your letter you raised concerns that the Explanatory Statement to the Determination did not make reference to consultation with business as required under section 4 of the Legislative Instruments Act 2003.

A New Car Plan for a Greener Future was announced by the Prime Minister on 10 November 2008. The package introduced a new suite of measures to assist the automotive industry totalling $6.2 billion. The industry was consulted in the development of this package and transitional arrangements in respect to the Automotive Competitiveness and Investment Scheme (ACIS).

The Determination prevents ACIS recipients double-dipping by receiving assistance from ACIS and other Australian Government programs for the same activity (including some of the new measures announced on 10 November 2008). It is primarily in place to protect the Commonwealth and is in line with existing policy. It is therefore very unlikely that consultation with the automotive industry on the Determination would have led to a material change. Nevertheless, in compliance with Section 4 of the Legislative Instruments Act 2003, the Explanatory Statement should have made some reference to consultation. I have asked my Department to ensure that it is more mindful of this requirement in the development of future legislation.

I trust that the information I have provided will be sufficient for the Standing Committee on Regulations and Ordinances to finalise its consideration of the Determination.

Yours sincerely

Kim Carr

Minister for Innovation, Industry, Science and Research

14 May 2009

Senator the Hon Kim Carr

Minister for Innovation, Industry, Science

and Research

Suite M1.48

Parliament House

CANBERRA  ACT  2600

Dear Minister

Thank you for your letter of 15 April responding to the Committee’s concerns with the ACIS Administration (Commonwealth Financial Assistance) Determination 2009 made under subsections 11(3) and (4) of the ACIS Administration Act 1999. This Determination specifies automotive and other industry assistance programs for the purposes of the Automotive Competitiveness and Investment Scheme.

The Committee’s concerns centred on consultation. In your letter you note that industry consultation occurred in relation to the development of the A New Car Plan for a Greener Future, and that consultation with the automotive industry on this particular Determination would be unlikely to “have led to a material change” in the instrument.

Section 18 of the Legislative Instruments Act 2003 provides that, in some circumstances (for example, instruments that are of a minor or machinery nature, or instruments that are required as a matter of urgency), consultation may be unnecessary or inappropriate. However, the fact that consultation is unlikely to lead to a change in an instrument does not, of itself, absolve a rule-maker from undertaking that consultation.

The Committee seeks an assurance that this will also be drawn to the attention of officers in your Department who are concerned with the development of future legislation.

The Committee would appreciate your advice on the above matter as soon as possible, but before 12 June 2009, to enable it to finalise its consideration of this Determination. Correspondence should be directed to the Chair, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

Senator Dana Wortley

Chair

9 June 2009

Senator Dana Wortley

Chair

Standing Committee an Regulations and Ordinances

Room SG49

Parliament House

CANBERRA  ACT  2600

Dear Senator Wortley

Thank you for your letter of 14 May 2009 concerning the ACIS Administration (Commonwealth Financial Assistance) Determination 2009 made under subsections 11(3) and (4) of the ACIS Administration Act 1999.

In your letter you sought an assurance that the need for consultation would be drawn to the attention of officers in my Department who are concerned with the development of future legislation, including circumstances where the consultation is unlikely to lead to a material change to the legislation.

I have reminded my Department that officers need to be mindful of the requirements for consultation in the development of future legislation as set out in Section 18 of the Legislative Instruments Act 2003. I am confident that, where appropriate and necessary, consultation will be undertaken with stakeholders during the development of future legislation.

I trust that the Standing Committee on Regulations and Ordinances is now in a position to finalise its consideration of the Determination.

Yours sincerely

Kim Carr

Minister for Innovation, Industry, Science and Research

Banking (prudential standard) determination No. 3 of 2008

5 February 2009

The Hon Chris Bowen MP

Assistant Treasurer and

Minister for Competition Policy and Consumer Affairs

Suite M1.24

Parliament House

CANBERRA  ACT  2600

Dear Minister

I refer to the Banking (Prudential Standards) Determination No. 3 of 2008 made under subsections 11AF(1) and (3) of the Banking Act 1959. This Determination revokes and replaces Prudential Standard APS 222 Associations with Related Entities which applies to all authorised deposit-taking institutions.

The Committee notes that this instrument substantially remakes a previous Determination, with changes to clauses 10 and 11. While no issues arise from these changes, the Committee takes this opportunity to seek your advice about two other aspects of the Determination.

First, clause 12 permits APRA to deem that other entities are related entities of an authorised deposit-taking institution (ADI). The ADI must then comply with monitoring and risk-control requirements in relation to the deemed related entity. This appears to be a widely-framed discretion. There is no indication as to the circumstances under which this discretion will be exercised and whether there is prior consultation with an ADI.

Secondly, clause 35 requires an ADI to consult with APRA prior to certain events (eg establishing or acquiring a subsidiary). It is not clear whether this clause operates simply as a method of notification, or whether APRA approval is required before the stipulated events. Clarification of the operation of this provision would be appreciated.

The Committee would appreciate your advice on the above matters as soon as possible, but before 6 March 2009, to enable it to finalise its consideration of this Determination. Correspondence should be directed to the Chair, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

Senator Dana Wortley

Chair

11 May 2009

Senator Dana Wortley

Chair

Standing Committee on Regulations and Ordinances Parliament House

CANBERRA  ACT  2600

Dear Senator Wortley

Thank you for your letter of 5 February 2009 seeking my advice in relation to clauses 12 and 35 of the Banking (Prudentia/Standards) Determination No. 3 of 2008. I apologise for the delay in responding to you.

In relation to the two aspects of the Determination, which have been identified by the Committee for my advice, I have been advised by the Australian Prudential Regulation Authority (APRA) that:

Paragraph 12:

Consistent with international best practice, APRA has established prudential policies governing dealings between an ADI and related parties. Related party exposures have been the source of problems for troubled financial institutions in a number of countries in recent years and for this reason banking regulators, including APRA, have introduced policies governing related party dealings. Financial institutions have demonstrated in the past considerable creativity and ingenuity in undertaking structured financial dealings, including those involving related parties. In the absence of robust prudential policies governing dealings with related parties, problems within the related entity, which could seriously affect a regulated entity (such as have been evident in the current crisis), could remain hidden.

In the face of such practices, APRA has adopted a principles-based approach to prudential regulation of related-party dealings. APRA has not sought to provide a detailed list of forms of related entities or schedules of requirements as to when entities might qualify as related entities. This provides the flexibility for ADIs to structure their groups and financial dealings but also enables APRA to be able to take action, dependent on the particular circumstances, should it consider these dealings have the potential to circumvent prudential requirements on related party dealings.

More generally, such flexibility is an essential element of a principles─based approach to prudential regulation, since a prescribed set of rules may not address all the various circumstances or structures that may give rise to heightened risk. APRA's prudential standards therefore focus on desired outcomes, with a degree of flexibility required, on the part of both the regulator and the regulated entity, as to how those outcomes are achieved - i.e. a focus on 'substance over form'.

Under its Service Charter, APRA is committed to appropriate consultation in its dealings with regulated entities, including in the application of prudential standards. Indeed, a principles-based regulatory regime is inherently dependent on communication and exchange of information between the regulator and the regulated entity.

In the particular circumstances of APS 222 paragraph 12, APRA would not exercise its discretion without consulting with the ADI first. Well before any decision is taken, APRA undertakes detailed consultation with the ADI in order to fully understand the nature of the relationship with the entity, the objectives of the ADI in undertaking the transaction, the details and consequences of the transaction, the extent of the risks to which it exposes the ADI, the ADI's proposed treatment of the transaction and the consequences thereof. In response, APRA would identify to the ADI its prudential concerns and seek the ADI's views on the matter.

Paragraph 35:

Given the impact of problems involving related party activities on banks, it has been best international practice for some time that supervisors have oversight of the acquisition or investment in any material new subsidiaries and affiliates. The Basel Core Principles state that:

'Banking supervisors must have the authority to establish criteria for reviewing major acquisitions or investments by a bank and ensuring that corporate affiliations or structures do not expose the bank to undue risks or hinder effective supervision.'

However, an absolute requirement for APRA to approve all exposures/transactions would be counter-productive and hinder the efficient operation of the industry. Similarly, attempts to adopt a modified approval process, focussing only on those exposures/transactions that are materially important, inevitably break down over definitional issues of what is'material'. APRA's approach is therefore based on notification and consultation, rather than an explicit approval power, to address any proposals that may be problematic.

Accordingly, paragraph 35 does not represent an approval process per se (and hence does not explicitly refer to a requirement that APRA `approve' such exposures / transactions). Rather, the practical implementation of paragraph 35 is that ADIs must notify APRA before any of the situations in paragraph 35 arise. Consistent with the comments above, this allows APRA the opportunity to consult with the ADI in order to fully understand the nature of the proposed exposure/transaction and the associated risks and consequences. If the proposal gives rise to prudential concerns, APRA has the opportunity to raise concerns about the ADI entering into the transaction before it is executed, potentially avoiding more significant regulatory responses subsequently.

In most cases, notification of a proposed exposure/transaction does not give rise to any prudential concerns by APRA and there is no further engagement between APRA and the ADI beyond the initial notification. The ADI is then free to proceed with the proposed exposure / transaction.

Where there are concerns and if, following consultation, those concerns cannot be addressed, APRA would advise the ADI that it might be subject to other prudential requirements. This could include higher capital requirements to cover increased risk, greater reporting obligations, tighter limits on intra-group dealings, etc. If, ultimately, it considered the acquisition or investment represented a substantial prudential concern, APRA could issue a direction to the ADI to cease its proposed involvement with the subsidiary or associate.

Finally, APRA has advised that these two provisions were part of the previous version of APS 222 and no concerns were raised by the ADI industry during consultation prior to its determination, or subsequently. In other words, the broad concepts of discretion and notification appear to be accepted by all stakeholders.

I trust this information will be of assistance to you.

Yours sincerely

Chris Bowen

Assistant Treasurer and

Minister for Competition Policy and Consumer Affairs

Social Security (Administration) (Schooling Requirement) Determination 2009 (No. 1)

12 March 2009

The Hon Jenny Macklin MP

Minister for Families, Housing, Community Services

and Indigenous Affairs

Suite MG.51

Parliament House

CANBERRA  ACT  2600

Dear Minister

I refer to the Social Security (Administration) (Schooling Requirement) Determination 2009 (No. 1) made under section 124C of the Social Security (Administration) Act 1999. This Determination specifies matters relevant to a decision regarding the suspension of a person’s schooling requirement payment. The Committee’s consideration of this instrument has raised the following issues.

Part 1 of Schedule 1 to this Determination lists reasonable excuses for failing to comply with an enrolment notice. Item 5 of Part 1 provides that it is an excuse if “the person has a reasonable belief that no school at which the child may reasonably be enrolled can provide a safe environment”. Paragraph 6(1)(b) of the Determination states that the Secretary may determine that this is a reasonable excuse if the excuse is reasonable in the circumstances. It thus appears that the Secretary must determine whether a reasonable belief is reasonable in the circumstances. The reason for the imposition of a double requirement of reasonableness is unclear.

Part 2 of Schedule 1 lists reasonable excuses for failing to comply with an attendance notice. Item 2 of Part 2 provides that it is an excuse if “the school … cannot provide a safe environment”. This is not framed as a reasonable belief, in contrast to Item 5 of Part 1. The explanatory statement provides no indication of the reasons for the difference in drafting.

The Committee would appreciate your advice on the above matters as soon as possible, but before 24 April 2009, to enable it to finalise its consideration of this Determination. Correspondence should be directed to the Chair, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

Senator Dana Wortley

Chair

28 April 2009

Senator Dana Wortley

Chair

Standing Committee on Regulations and Ordinances

Parliament House

CANBERRA ACT 2600

Dear Senator Wortley

Thank you for your letter of 12 March 2009 to the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP, on behalf of the Standing Committee on Regulations and Ordinances about the Social Security (Administration) (Schooling Requirement) Determination 2009 (No. 1) made under section 124C of the Social Security (Administration) Act 1999. The Minister has asked me to reply to your letter on her behalf.

The Minister has noted your comments and appreciates the time you have taken to bring this matter to her attention. However, as the legislation for this determination falls within the portfolio responsibilities of the Deputy Prime Minister and Minister for Education, Employment and Workplace Relations, the Hon Julia Gillard MP, I am required to refer your letter to her office for consideration.

Yours sincerely

Joanna Brent

Chief of Staff

1 June 2009

Senator Dana Wortley

Senator for South Australia

Chair, Standing Committee on Regulations and Ordinances

Parliament House

CANBERRA ACT 2600

Dear Senator

Thank you for your letter of 12 March 2009 to the Hon Jenny Macklin MP, Minister for Families, Housing, Community Services and Indigenous Affairs, on behalf of the Senate Standing Committee on Regulations and Ordinances, concerning the Social Security (Administration) (Schooling Requirement) Determination 2009 (No. 1). As the matter you have raised falls within my portfolio responsibilities as Minister for Education, your letter was referred to me for a reply on 30 April 2009. I apologise for the delay in responding.

The Senate Standing Committee on Regulations and Ordinances notes that there is an inconsistent use of terminology in relation to reasonable excuses in the two Parts of the Schedule to the Determination. Paragraph 6(1)(b) of the Determination and item 5 of Part 1 of the Schedule provides that it is a reasonable excuse for a person to fail to enrol his or her child in school if `the person has a reasonable belief that no school at which the child may reasonably be enrolled can provide a safe environment' and that excuse is reasonable in the circumstances. Paragraph 6(2)(b) and item 2 of Part 2 of the Schedule provide that it is a reasonable excuse for a person failing to take reasonable steps to have their child attend school if `the school at which the child is enrolled cannot provide a safe environment for the child, and the child is unable to be enrolled in another school' and that excuse is reasonable in the circumstances.

I am advised that the express inclusion of reasonableness in both section 6 of the Determination and a number of specific excuses set out in the Schedule to the Determination is intended to emphasise to decision makers that the test to apply to an excuse is an objective test. That is, the excuse must be regarded by the ordinary person as reasonable in the circumstances. The duplication of the reasonableness requirement by the terms of paragraph 6(1)(b) and item 5 of Part 1 of the Schedule to the Determination has no legal implications for the test of whether the excuse in item 5 absolves a person from the consequences of not enrolling his or her child in school. This test remains objective.

Nevertheless, I am advised that reference to the reasonable belief of a person in item 5 of Part 1 of the Schedule is legally superfluous, and the excuse can be reduced simply to `no school at which the child can be enrolled can provide a safe environment'. However, as the item as currently worded is legally effective and consistent with the intention that the test for an excuse be objective, I do not propose to amend the Determination at this time. The operation of the Determination in practice will be constantly reviewed by my Department and appropriate changes made to the Determination as important issues arise in connection with its operation.

Thank you for bringing this matter to my attention.

Yours sincerely

Julia Gillard

Minister for Education