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Thursday, 21 June 2007
Page: 18

Senator WATSON (9:56 AM) —I present the 113th report of the Standing Committee on Regulations and Ordinances on consultation under the Legislative Instruments Act 2003.

Ordered that the report be printed.

Senator WATSON —I move:

That the Senate take note of the report.

Under that act, departments and agencies which make legislative instruments are required to undertake ‘appropriate consultation’ before making an instrument, particularly where that instrument is likely to have a direct or a substantial indirect effect on business, or to restrict competition.

In determining whether any consultation is ‘appropriate’, departments and agencies can have regard ‘to any relevant matter’, including the knowledge of experts, and the views of persons likely to be affected.

Consultation is not required for all instruments, and the act gives some examples of instruments for which consultation may be unnecessary or inappropriate. For example, those of a machinery nature, urgent instruments, those that affect budget decisions, those that affect national security, those where adequate consultation has been undertaken by someone else or those relating to the Australian Defence Force.

Under section 19 of the act, if there is a failure to consult, it does not affect the validity or enforceability of an instrument—and that is important.

Finally, under section 4 of the act, information about consultation is to be included in the explanatory memorandum tabled with an instrument. In summary, under the consultation regime in the act, departments and agencies do not have to consult with anyone, but they do have to tell the parliament what they have or what they have not done.

Unfortunately, over the past two years, the committee has raised a number of concerns in relation to this consultation regime—and that is the reason for this report today.

First, we are concerned about the number of times we have had to write to departments and agencies reminding them of their obligation to give this information to the parliament—specifically, 110 times in 2005, 53 times in 2006 and a proportionate number of times so far this year. Two and a half years is surely enough time for departments and agencies to have become aware of this obligation.

At the moment, the duty to include consultation information is hidden away in the definition of ‘explanatory statement’ in section 4 of the act. It may be that making it more prominent might make more departments and agencies aware of it.

Our second concern is with the quality of the information provided. Too often, the explanatory statement simply says, ‘All relevant stakeholders were consulted,’ or ‘All persons likely to be affected were consulted,’ and ‘All views were taken into account in the drafting of the regulation.’ This sort of comment is cursory, generic and unhelpful—both for the committee and for anyone else reading the explanatory statement. It is often the case that a significant amount of consultation has, in fact been undertaken; it is just that no-one is told about it.

Our third concern is to correct a misconception regarding the operation of the act. The committee often sees a statement to the effect, ‘No consultation was undertaken because this instrument has no effect on business.’ The act requires consultation where an instrument has an effect on business or restricts competition, but if an instrument does not have that effect the act does not excuse it from consultation. You may still have to consult about an instrument even though it does not affect business.

Our final concern is that some of the exceptions under the act seem to have been resorted to in a somewhat questionable manner. Explanatory statements say that consultation was not undertaken because an instrument was of ‘a minor machinery nature’. However, the instrument itself seems to be a little more significant than that, and makes significant changes to current arrangements, or consultation was not undertaken because an instrument was ‘urgent’. However, there is no explanation as to why the instrument was urgent.

The committee proposes to examine these issues in greater detail and, if necessary, report further to the Senate in late 2007. I thank the Senate.