Wednesday, 27 June 2012
Legislative Instruments Amendment (Sunsetting Measures) Bill 2012; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
This Government is committed to reducing red tape and unnecessary regulation on industry and small business.
We recognise that Australia's 2.7 million small businesses are this nation's economic engine room, employing over 5 million Australians and making up a third of our economy.
These businesses comprise hard working men and women who, through their time and efforts, are building a career and a better future for their families.
This Government is doing its part to make sure business owners can get on with growing their enterprises, not spending time searching for relevant assistance or wading through unnecessary red tape.
The Prime Minister recently announced the creation of the Small Business Commissioner to provide a direct voice to Government and a one-stop shop for small business services and information. And it took this Labor Government to ensure small business is represented in Cabinet.
This Bill is another step in the process to reduce unnecessary regulation, in an orderly, efficient and consultative way. It will provide a clear process to assess, renew or allow to 'sunset' the thousands of pieces of subordinate legislation currently on the statute books.
In 2003, the Legislative Instruments Act was enacted to establish a consistent system for the registering, tabling, Parliamentary disallowance and sunsetting of Commonwealth legislative instruments.
The sunsetting provisions of the Legislative Instruments Act provide that most legislative instruments sunset, or automatically cease, after 10 years. This limit was introduced to ensure that legislative instruments are regularly reviewed and only remain operative if they continue to be relevant.
This 10 year limit on validity remains appropriate.
However, at the time of enactment, the Government of the time did not accurately assess the number of legislative instruments in existence, apart from those 663 already published in hard-copy in the Statutory Rules series.
This Labor Government has prioritised extensive work to discover and register a large number of additional instruments, consistent with our commitment to clearer laws. These were instruments made under previous governments which were for the first time made publicly accessible by this government – so that small businesses and indeed all members of our community would have ready access to the laws to which they are subject.
Due to the large number of instruments registered in the years immediately following commencement of the LIA, sunsetting will cause the mass expiration of over 6,300 instruments from 2015, with two peaks in 2016 and 2018.
As the legislation was structured in 2003, assessing which legislative instruments remain necessary would put unnecessary strain on industry, business groups and other stakeholders, as well as Government.
The Productivity Commission in its 2011 Report 'Identifying and Evaluating Regulation Reforms' expressed concern about the mass expiry of instruments from 2015. They identified an increased risk that instruments will be remade without adequate review and without proper consultation with business and other stakeholders.
The Commission noted that the sheer quantity of instruments required to be remade by government increases the risk that business and other stakeholders will not have sufficient time to make a meaningful contribution to any review.
Consistent with the recommendations of the Productivity Commission, the purpose of this Bill is to smooth these sunsetting peaks, and encourage high quality consultation before regulations and legislative instruments are remade. It is also intended to ensure the information on the Federal Register of Legislative Instruments is current.
The specific measures in this Bill are as follows.
Firstly, this Bill will smooth sunsetting peaks by simplifying sunsetting dates. For instruments that were registered in bulk when the Register commenced in 2005, sunsetting dates will be spread out to reduce the number of instruments that expire at the same time and provide ample time for proper review and consultation.
The Bill also establishes a new default rule for regulations and legislative instruments. They will now sunset on their date of registration, making sunsetting dates easier to calculate.
Secondly, the Bill will insert a new provision into the Act to provide for thematic reviews. The introduction of thematic reviews was recommended by the Productivity Commission. By contributing to these reviews, key stakeholders will be able to actively participate in the regulation of their sector and contribute to consistency in regulation making.
Under this new provision, the Attorney-General can declare a common sunset date for a number of legislative instruments if satisfied that the instruments will be subject to a single review. The new aligned sunsetting date must be within five years of the sunset date of the earliest sunsetting instrument. The Attorney-General's declarations will be tabled in Parliament for public scrutiny and be open to disallowance by either House of Parliament.
Thematic reviews will provide industry and business with the opportunity to engage in one comprehensive review process, instead of having to provide comment on up to dozens of separate regulations, without a view of the wider regulatory framework.
Thirdly, the Bill will allow for the efficient repeal of spent and redundant instruments on the Federal Register of Legislative Instruments. According to the Office of Legislative Drafting and Publishing, approximately 40% of the 40,000 titles on the Register are either spent or redundant, but to a person looking for information on the Register, these instruments appear to be in force.
To ensure the Register accurately represents the current state of the law, the Bill provides for the automatic repeal of instruments and provisions which have commenced in full and whose only effect is to amend or repeal other instruments. This amendment will only apply to instruments and provisions that are created after the Bill commences.
For instruments already contained in the Register, the Bill will enable the creation of a specific regulation to effect a bulk repeal of instruments which are spent or redundant. Bulk revocation will only occur after extensive consultation. The Attorney-General will also need to be satisfied that the instruments are in fact spent or redundant.
Regulations that effect a bulk repeal will be tabled in Parliament and open to disallowance by either House of Parliament.
Finally, the Bill clearly communicates the requirements for explanatory statements that accompany legislative instruments. It is these statements that help businesses and individuals understand the effect of legislative instruments.
But too often in the past these materials have been confusing or apparently contradictory, forcing business to spend time and money obtaining advice on their legal obligations. By setting out clear requirements for explanatory statements, the Government will reduce the effort necessary to understand what steps are necessary to comply with the law.
Although this Bill may be largely technical, it will support efficient and effective consultation processes applying to all delegated legislation – much of which has a direct and significant affect on individuals, business and the community.
This Government is determined to keep our economy strong, and recognises the essential contribution of hard working individuals in our small business sector in keeping us the envy of the developed world.
This Bill is yet another example of Government working with the community to create a clear, understandable and fair framework for doing business in Australia.