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Monday, 25 June 2018
Page: 104


Senator FIFIELD (VictoriaMinister for Communications, Minister for the Arts and Deputy Leader of the Government in the Senate) (18:29): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Australian Institute of Health a nd Welfare Amendment Bill 2018

The Australian Institute of Health and Welfare (the Institute) is recognised nationally and internationally as a leader in the production of data and statistics in health and welfare.

For 30 years the Institute has been at the forefront of supplying the evidence we need to inform national priorities. The Institute has significant data holdings and publishes around 180 reports annually. These reports are used to help inform evidence-based policy in the health, housing and welfare sectors.

The Institute is trusted by governments, researchers and the community for its independence and has become recognised as the single source of truth for reporting on the health of Australians, reporting on key social issues and measuring the performance of the Australian health and welfare systems.

The Institute has continued to evolve in a changing data landscape, with its data linkage activities helping to build an understanding of pathways within and across the health and welfare sectors. The Institute is well placed to meet the increasing demand for data linkage services, drawing on its expertise as an accredited Integrating Authority to undertake projects involving Commonwealth data for statistical and research purposes across a range of subject areas.

In 2015, an Independent Review of the Institute (the Independent Review) made a number of recommendations to improve the way the Institute operates. Most of the recommendations related to internal processes or administrative arrangements with its main partnering departments.

The Review also recommended moving to a skills-based Board.

The Australian Institute of Health and Welfare Act Amendment Bill 2018 builds on 30 years of success to modernise the Institute's governance and administration without compromising its independence or well-deserved reputation.

The major changes proposed by this Bill are a reduction in the size of the Institute's Board and streamlining appointment processes. The Board currently has 15 members and is a mix of ex-officio positions and other representative positions with prescribed eligibility requirements. Members cannot fulfil more than one role.

Unlike other similar agencies, these appointments are made, and if required, terminated, by the Governor-General.

This has led to a time-consuming and inefficient appointment process in identifying willing and suitable candidates that meet the relevant criteria and then seeking the approval of the Governor-General. It can also lead to lengthy vacancies when members resign unexpectedly.

Consistent with the recommendations of the Independent Review, this Bill proposes a skills-based Board appointed by the Minister for Health for terms of up to five years. This will provide the necessary strategic governance of the Institute to ensure it continues to grow its role across governments.

Members collectively will have skills or experience or significant standing in a range of fields including Aboriginal and Torres Strait Islander health and welfare, statistics, finance, business and law, as well as expertise in health, welfare and housing.

The Board will comprise 12 members, including a Chair, a Deputy Chair and the Institute's Chief Executive Officer.

The Institute could not do its job without the strong cooperation of the states and territories. To ensure that this continues, up to three members of the Board will be nominated by State Health Ministers. This will ensure that the Board maintains its linkages to the key policy advisers of governments to keep the Institute aligned with broader national policy.

The Bill will also ensure that decisions on the terms of employment for members, including terminations, resignations and leave of absences, will be the responsibility of the Minister for Health. This is consistent with the change in responsibilities for appointments from the Governor-General to the Minister for Health.

Other amendments include changing the title of the head of the Institute from Director to Chief Executive Officer and changing responsibility for the appointment of the Chief Executive Officer from the Minister for Health to the Board. This is consistent with the approach used by other Commonwealth Boards and reinforces that the Chief Executive Officer is directly accountable to the Board.

The measures will also remove the need for contract limits to be approved by the Minister. This change removes an unnecessary restriction on the Institute's business and is consistent with the requirements of the Public Governance, Performance and Accountability Act 2013.

The Bill will also remove the requirement for the Institute to seek agreement from the Australian Bureau of Statistics for the collection of health and

welfare-related information and statistics. This is a relationship issue and provides the Institute with the flexibility to consult with the Australian Bureau of Statistics on such matters as necessary.

Transitional provisions are also introduced to ensure that the Chair and the Institute's Chief Executive Officer can continue in their positions for the balance of their current terms, as well as specifying delegation powers under the Australian Institute of Health and Welfare Act 1987.

The Institute has rightfully earned its reputation across all levels of government as an independent leader in the provision of health, housing and welfare information. This Bill seeks to make the necessary improvements in governance and administration to ensure that this reputation continues to grow.

Corporations (Review Fees) Amendment Bill 2018

This Bill helps implement the Asia Region Funds Passport framework which the Government committed to by signing the international Memorandum of Cooperation in April 2016.

This Bill makes minor consequential amendments to the Corporations (Review Fees) Act 2003 (Review Fees Act) stemming from the Corporations Amendment (Asia Region Funds Passport) Bill 2018 (Passport Bill). It updates the definition of 'review date' to be consistent with the Passport Bill and includes notified foreign passport funds in the list of entities required to pay review fees.

Full details of the measure are contained in the Explanatory Memorandum.

Treasury Laws Amendment (APRA Governance) Bill 2018

The Treasury Laws Amendment (APRA Governance) Bill 2018 bolsters the ability of the Australian Prudential Regulation Authority (APRA) to provide oversight of the Australian financial sector.

APRA is Australia's prudential regulator overseeing banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies and most of the superannuation industry.

It is an independent Commonwealth Government body set up under the Australian Prudential Regulation Authority Act 1998 (APRA Act).

In recent years, APRA has had an extensive program of supervisory and policy work. It has implemented important reforms to bolster the soundness and stability of the Australian financial system, including those originating from the Financial System Inquiry that the Government initiated as well as the recently passed crisis management bill. This critical work must continue. In recent years, APRA has also rightly given greater attention to issues of governance, culture and accountability within the financial sector. This important work must also continue.

A good example of this is the recent prudential inquiry by APRA into the governance, culture and accountability within the CBA group. While CBA is undoubtedly financially sound and providing strong returns to shareholders, the APRA report showed that shortcomings in governance, inattention to aspects of risk management, and a complacent culture can occur without strong and constant vigilance by boards, who have the primary responsibility for the management of their institutions. To ensure they are up to the task, regulators must keep their spotlight on these issues too.

As part of doing this, APRA will, amongst other things, be heavily engaged in implementing recent reforms to the banking sector to improve the accountability of bank executives. It will also help foster competition and drive out complacency amongst incumbents by supporting the entry of new banks into the sector. Beyond banking, APRA's work on risk culture and remuneration will be very important across the financial sector as a whole. And there are a range of emerging issues - including cyber risks - that need on-going attention and focus.

The community benefits from a strong and capable prudential regulator, and the Government is committed to ensuring APRA at all times continues to have the strong and capable leadership necessary to fulfil its important role as the financial system evolves.

Under its enabling legislation, APRA is currently headed by an Executive Group consisting of not less than three and not more than five members. The terms and conditions of the appointment of members are set out in the APRA Act, and members are appointed by the Governor General. Currently one member must be appointed Chair, and another member may be appointed Deputy Chair.

Legislation has already been introduced to appoint a second Deputy Chairperson at the Australian Securities and Investments Commission to enhance its effectiveness. The Government considers it appropriate this also occur for APRA.

The amendments in this Bill, by permitting a second Deputy Chair to be appointed, will provide greater flexibility in the way in which APRA is governed and for the allocation of responsibilities to each member. This helps to maximise the skills and capabilities available to APRA within its leadership.

In so doing, the changes can facilitate more oversight of the financial sector at this critical time, as well as allow the Chair to have a greater oversight of the entire system and of APRA's overall performance.

These amendments will enhance the ability of APRA to undertake its critical functions.

The ability to appoint up to two Deputy Chairs will assist with recruiting very senior and experienced members as needed, and so enhance the ability of the APRA Executive Group to manage new or more complex issues in the future.

Accordingly, it is entirely appropriate that the APRA Act to be amended so that a second Deputy Chairperson can be appointed if that is considered necessary.

The amendments would permit, but not require, that there be two deputy Chairs, thereby providing flexibility depending on the circumstances. Similarly, the legislation does not prescribe a particular role for each Deputy.

Full details of the measure are contained in the Explanatory Memorandum.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.

Proceedings suspended from 18:30 to 19:30