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Scrutiny of Bills - Senate Standing Committee - Reports - Fifteenth, dated 20 October 1982


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Parliamentary Paper No. 252/1982

The Parliament of the Commonwealth of Australia

SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS

Fifteenth Report

October 1982

The Commonwealth Government Printer Canberra 1982

© Commonwealth of Australia 1982

ISSN 0729-6258

SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS

MEMBERS OF THE COMMITTEE

Senator A.J. Missen, Chairman

Senator M.C. Tate, Deputy Chairman

Senator N.A. Crighton-Browne

Senator G.J. Evans

Senator J . Haines

Senator R. Hill

TERMS OF REFERENCE

(a) That a Standing Committee of the Senate, to be known

as the Standing Committee for the Scrutiny of Bills,

be appointed to report, in respect of the clauses of

Bills introduced into the Senate, and in respect of Acts of the Parliament, whether such Bills or Acts,

by express words or otherwise -

(i) trespass unduly on personal rights and liberties;

(ii) make rights, liberties and/or obligations

unduly dependent upon insufficiently defined

administrative powers;

(iii) make such rights, liberties and/or obligations unduly dependent upon non-reviewable administrative decisions;

(iv) inappropriately delegate legislative power; or

(v) insufficiently subject the exercise of

legislative power to parliamentary scrutiny.

(b) That the Committee, for the purpose of reporting upon the clauses of a Bill when the Bill has been

introduced into the Senate, may consider any proposed law or other document or information available to it,

notwithstanding that such proposed law, document or

information has not been presented to the Senate.

SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS

FIFTEENTH REPORT

1. The Committee has the honour to present its Fifteenth Report to the Senate.

DISCUSSION OF BILLS

2. The Committee draws the attention of the Senate to clauses of the following Bills which contain provisions which the

Committee considers may fall within the principles

expressed in paragraph 1 (a) (i) to (v) of the Resolution

of the Senate of 25 May 1982:

Bounty (Berry Fruits ) Bill 1982

Customs Tariff Bill 1982

Customs Tariff (Miscellaneous Amendments) Bill 1982

Diesel Fuel Taxes Legislation Amendment Bill 1982

Drought Assistance (Primary Producers) Bill 1982

BOUNTY (BERRY FRUITS) BILL 1982

3. The purpose of this Bill is to provide assistance by way of

a bounty scheme on the production in Australia of certain berry fruits and to enact the control, inspection and

appeal provisions standard to Bounty Acts.

4. General Comment

The Committee originally made comments on provisions of this Bill in the Scrutiny of Bills Alert Digest No. 10 of

9 September 1982 and then in the Scrutiny of Bills

Thirteenth Report of 22 September 1982. The Committee has

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since received a written response from the Minister

Assisting the Minister for Industry and Commerce. The

Minister's letter is one of many the Committee has now

received responding to comments on provisions of proposed

legislation to be administered under the "Industry and

Commerce" portfolio. The Committee commends these and

similar responses, which are of course particularly useful

in publicising the proposed adminstrative policy, even if

the Committee should decline to modify its recorded view on

the possible defects of the Bills. The Committee attempts

publicly to acknowledge these and other Ministerial responses, in the hope of stimulating wider public interest

in the legislative process, especially as it affects the

regulation of personal rights and liberties.

5. The Committee draws the attention of the Senate to the

following clauses of the Bill.

Clause 3 (1) - Interpretation - "bounty period"

In its Alert Digest No. 9 and in the Thirteenth Report, the Committee stated that this clause enabled the Minister to

add to, or subtract from, the provisions of the Bill when

defining the scope of three key terms - "bountiable fruit",

"processing" and "bounty period". The Committee drew

particular attention to the effect of the Ministerial power

to define the "bounty period", which enables the Minister

to continue the operation of the Act beyond the specified

termination date. The Committee regarded this "Henry VIII"

clause as insufficiently subjecting the exercise of legislative power to parliamentary scrutiny.

In his letter to the Committee, the Minister mentioned that

"similar powers have been included in other bounty legislation". The Minister further stated that:" In

accordance with past practice none of the powers mentioned

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above will be delegated pursuant to proposed section 22 of

the Act". The Minister identified the specific intent of

the "Henry VIII" provision as follows:

"The Minister's power to extend the 1 bounty period1 has been included in the event that the Government may decide to review the bounty just prior to its expiry or to send a further reference to the I.A.C.

Bounty payments could then continue for a limited period pending the outcome of such a review or inquiry."

The Committee acknowledges the Minister's explanation of

the operation of this provision. However, the Committee

continues to draw this and other "Henry VIII" clauses to

the attention of the Senate under principle 1(a)(v) in that

they might be regarded as insufficiently subjecting the

exercise of legislative power to parliamentary scrutiny.

Clause 8 - Lack of appeal provision

In its Alert Digest No. 9 and in the Thirteenth Report, the

Committee noted that this clause empowers the Comptroller

General of Customs (or his delegate under clause 22) to

withhold payment of the bounty if he is not satisfied that

the fruit is of "good and merchantable quality". The

Committee further noted that while decisions under other

sections of the Bill are reviewable by the Administrative Appeals Tribunal under clause 23, the Bill contains no

appeal provision against a refusal to pay under this

clause.

In his letter, the Minister commented as follows:

"This type of clause is common to most Bounty Acts and I consider it unnecessary to provide a specific provision for appeal against a decision under this provision. This is for the reason that a decision of the Comptroller-General pursuant to clause 8 has a

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direct relationship to the decision by the Comptroller-General under clause 9(3) of the Bill. If the Comptroller-General is satisfied that the fruit is not of good and merchantable quality he would refuse to approve payment of bounty. Provision is made in clause 23 of the Bill for a decision to

refuse to approve payment of bounty to be capable of review by the A.A.T."

The Committee notes that the appeal procedure to the Administrative Appeals Tribunal under clause 23 refers

specifically to decisions taken under clause 9, and asks if

it is possible explicitly to include the matters referred

to in clause 8 as criteria governing the decision made in

clause 9(3). The Committee continues to bring this

provision to the attention of the Senate under principle

1 (a) (iii) in that it might be regarded as making rights,

liberties and/or obligations unduly dependent upon

non-reviewable administrative decisions.

Clauses 17 to 20 - Powers of officers

In his letter, the Minister stated that the Committee's

original comments were similar to those made in Alert Digest No. 9 on the Diesel Fuel Taxes Legislation Amendment

Bill. The Minister then outlined a detailed response which is similar to another Ministerial response on the Diesel

Fuel Taxes Legislative Amendment Bill. The provisions of that Bill, the Minister's response, and the Committee's

considered reply are included in this Fifteenth Report. Comments made in relation to that Bill are therefore

relevant to the similar provisions of this Bill.

CUSTOMS TARIFF BILL 1982

6. The purpose of this Bill is to replace the Customs Tariff

Act 1966.

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7. The Committee draws the attention of the Senate to the

following clauses of the Bill.

Clause 25 - Ministerial discretion

In its original comments on this clause in Alert Digest

No. 11 and the Thirteenth Report of 23 September 1982, the

Committee noted that the effect of this provision is to

allow the Minister to amend the Schedule. This clause

empowers the Minister to direct that goods, which he

determines to be substitutes for or imitations of other goods already specified in the Schedule, shall be dutiable

at the rate of the Scheduled goods. The Minister is to exercise his discretion by notice published in the Gazette.

In a subsequent letter to the Committee, the Minister

Assisting the Minister for Industry and Commerce states that the provision for Gazette Substitution and Imitation

Notices "is not new, and is presently contained in section

23 of the Customs Tariff Act 1966". However, the Minister

also stated that the current Government policy was that

"the provision for such Notices should remain, but that as

normal practice, such Notices [shall] be viewed as

temporary measures pending inquiry and report by the I.A.C.

It is not planned that any Notice will be operative as at

1 January 1983, the intended date of the operation of the

new Tariff Act."

The Minister went on to invite the Committee to consider

the following modification of the provision:

"If it were to be considered essential, provisions similar to those in clause 26(7) could be made in clause 25. In that event, rather than delay passage of the Bill, I am prepared to give an undertaking to amend the Act before it becomes operative. This could be achieved by a Notice of Intention to Propose

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Customs Tariff alteration by Gazette Notice in pursuance of section 273EA of the Customs Act 1901."

Although the Committee welcomes the Minister's intention to

amend the Bill, it is concerned that the proposed amending

mechanism is itself an example of a "Henry VIII"provision,

to which the Committee has an in principle objection. The

Committee would prefer to see the Bill improved by a

substantive amendment before Parliament passes the Bill.

The Minister's proposal attempts to correct one defective

legislative provision by resort to a similar one in the

Principal Act which, unfortunately, is not before the

Committee. The Committee remains concerned that the

unamended provision in clause 25 allows the Minister to

amend the Schedule, and it draws this to the attention of

the Senate under principle 1(a)(iv) in that it might be regarded as inappropriately delegating legislative power,

and under principle 1(a)(v) in that it might be regarded as insufficiently subjecting the exercise of delegated

legislative power to parliamentary scrutiny .

CUSTOMS TARIFF (MISCELLANEOUS AMENDMENTS) BILL 1982

8. The purpose of this Bill is to amend, inter alia, the Customs Act 1901 consequent upon the introduction of the

Customs Tariff Bill 1982.

9. The Committee draws the attention of the Senate to the

following clause of the Bill.

Clause 9 - Ministerial determinations

In its original comments on this clause in Alert Digest No. 11 and the Thirteenth Report of 23 September 1982, the Committee noted that this clause vests many discretionary

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powers in the Minister to determine, by notice in the

Gazette. whether goods are to be deemed produce or

manufacture of a country. The Committee listed many of

these powers and, in the absence in the Bill of any

criteria guiding the exercise of these powers, questioned

whether they might be regarded as making rights, liberties

and/or obligations unduly dependent upon unreviewable

adminstrative powers.

The Minister's response outlined the background of the

powers referred to by the Committee. They are currently in

the Principal Act, and many have rarely been used. The

Minister stated:

"These provisionswere inserted in the past to allow implementation of the discretion requirements contained in International Trade Agreements. In these circumstances, and from an examination of the background and usage of the discretion to date, I do not feel that any further mechanism in the

legislation would be appropriate."

The Committee originally noted that it does not reject the

need for legislation to provide for flexible

administration. While appreciating the Minister's detailed

outline of the background to these powers, the Committee continues to bring these provisions to the attention of the

Senate under principle 1(a)(ii) in that they might be

regarded as making rights, liberties and obligations unduly dependent upon insufficiently defined administrative

powers.

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DIESEL FUEL TAXES LEGISLATION AMENDMENT BILL 1982

10. The purpose of this Bill is to amend the Customs Act 1901,

the Excise Act 1901 and the Diesel Fuel Taxation fAdministration) Act 1957 to terminate the existing diesel

fuel certificate scheme, and to introduce a new rebate

system for diesel fuel.

11. The Committee draws the attention of the Senate to the

following clauses:

Clause 5 - Insertion of new section: Rebate of duty in

respect of diesel fuel used for certain purposes

In Digest No. 9 of 25 August 1982, the Committee drew attention to this clause which proposes to insert a new

section 164 in the Customs Act 1901 to provide for rebate

of duty in respect of diesel fuel. Proposed sub-section (1)

empowers the making of regulations imposing conditions and

restrictions on the rebate. Despite the words in

parenthesis within the proposed sub-section, the power is

couched in very wide terms. The sub-section would seem to

allow the making of regulations that could subsequently

change the effect of the section.

In a detailed response to the Committee's comments, the

Minister states the following:

"Proposed Section 164 was drafted (using language consistent with that used in Section 163) so as to allow the administrative machinery provisions for the new diesel fuel rebate to be likewise provided in the Customs Regulations. The words '(being conditions and restrictions that relate to goods generally, to goods included in a class of goods that includes diesel fuel or to diesel fuel only)' were included in the proposed sub-section 164(1) to make it clear that certain existing administrative machinery provisions

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in the Customs Regulations could be applied to or modified so as to apply to the new diesel fuel rebate as well as continuing to apply to other rebates. It is, of course, intended that regulations will also be

made specifically for the purposes of the new diesel fuel rebate ...

The Office of Parliamentary Counsel has advised that, having regard to the use of the word 1 circumstances' in sub-section 163(1), proposed sub-section 164(1) would probably not allow the making of regulations

removing an entitlement to rebate that a person has under the sub-section. Thus, for example, regulations could not be made limiting the type of mining operations entitled to rebate to gold-mining operations (the 1 circumstances1 in which a rebate will be payable). The sub-section would, however,

allow the making of regulations imposing conditions and restrictions that the applicant for rebate must fulfill (the 1 conditions and restrictions' subject to which rebate will be paid). Thus, for example,

regulations could be made requiring an application to be accompanied by supporting invoices. In other words, regulations may provide the administrative machinery for the payment of rebates but may not

affect any entitlement to rebate provided by the sub-section..."

Despite the Minister's comments, the Committee remains concerned with the operation of the provision, and draws it

to the attention of the Senate under principle 1(a)(iv), in

that it might be regarded as inappropriately delegating

legislative power.

Also in Digest No. 9, the Committee drew attention to clause 5(7) [then clause 5(5)] which includes a definition

of 'residential premises'. Use of fuel in residential

premises gives an entitlement to a rebate. However,

'premises used in the business of a ... boarding house' are

excluded from the definition. Such an exclusion could,

perhaps, be interpreted to apply to persons who take in one

or two boarders. If this is the intention of the definition

provided in the sub-section, it may be regarded as

trespassing unduly on personal rights and liberties.

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In his letter to the Committee, the Minister stated:

"Your Committee also commented that a person who takes in one or two boarders might be excluded from rebate payments. It is Government policy that persons who run a boarding house as a business will not be

eligible for the diesel fuel rebate. On the other hand the owner of a residence who receives rent from family members, relatives or one or two other boarders, as a means of supplementing his income, is not regarded as using his premises as a boarding house business and therefore is eligible for the

rebate. Your Committee would be interested to know that the term 'residential premises' is similarly defined in the Liquefied Petroleum Gas (Grants) Act 1980 for the purposes of the payment of the subsidy under that Act."

The Committee accepts the Minister's assurance as to

government policy and the intended scope of this provision,

yet it brings it to the attention of the Senate under

principle 1(a)(i), in that the unintended consequences of

the provision may mean that a person's affairs cannot be

arranged with certainty, and to that extent the provision

might be regarded as trespassing unduly on personal rights

and liberties.

Clause 7 - Insertion of new section: Powers of officers

for purposes of section 164

In Digest No. 9 , the Committee drew attention to this clause in that it might be regarded as trespassing unduly

on personal rights and liberties. This clause proposes to

insert a new section 214A in the Customs Act 1901, and is

based on existing provisions of the Diesel Fuel Taxation

fAdministration! Act 1957. Proposed sub-sections (1), (2)

and (3) permit entry into premises by an authorized officer without a warrant. The only checks on entry are that it be

at a reasonable time and evidence of being an authorized

officer must be produced if requested.

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Proposed sub-sections (4) to (9) go further in that they

allow an authorized officer - a Collector of Customs or an

officer appointed by a Collector - to require the

attendance before the authorized officer of a person for

interrogation. Questions must be answered and books and

documents produced under threat of penalty. ‘

Self-incrimination is no excuse for not answering and the

answers so elicited may be used in evidence in relation to

a number of offences under the Act. It is to be noted that

there is no suggestion in proposed section 214A that a

person may be represented when appearing before the

authorized officer.

In his letter to the Committee the Minister stated:

"The 1 powers of officers' as proposed by Clauses 7 and 13 of the Bill are no more extensive than the powers that are contained in the Diesel Fuel Taxation (Administration Act) 1957. Those powers were required

in connexion with the administration of the previous diesel fuel 1 certificate' system.

I should point out that the powers are also no more extensive than the powers contained in the various Bounty Acts administered under the 'Industry and Commerce' portfolio. In fact the powers proposed by

the Diesel Fuel Taxes Legislation Amendment Bill have been modelled along similar lines to the powers in the Bounty Acts.

It is appropriate if I mention the manner in which it is proposed to administer the diesel fuel rebate scheme. It is anticipated that about 120,000 applications for the rebate will be made and processed each month. The Government has also directed that applications are to be processed within 14 days of receipt. It will therefore not be possible

to verify the particulars of an application before payment is made.

Consequently when applications are received the rebate will be paid on the face value of the application. It is then proposed that random checks be made at irregular intervals to verify applicants particulars to ensure rebates have been properly

paid.

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The required powers of officers are thus proposed to allow access to premises to verify that the rebates were properly paid. The availability of these powers will mean that rebate applications can be processed without delay in the knowledge that adequate

1 post1 rebate checking can be conducted.

There will be no reason to suspect that an offence has been committed by an applicant for rebate and the powers are required merely to enable adequate

checking to ensure that rebates were properly paid.

In my view the requirement for warrants in each instance would be inappropriate in this case. Warrants are more appropriate when it is known in advance that there is reasonable cause to suspect

that an offence has been committed.

The administration of this rebate system will be no different to the administration of other Customs and Excise legislation wherein 1 post1 entry checking is conducted based on the commodity control approach...

It is my view that the proposed powers are essential to administer effectively the scheme and to more importantly protect the revenue. I further believe that it is not unreasonable for persons who are paid moneys out of the 1 public purse1 to expect a degree

of auditing by investigators to establish that such payments have been correctly made."

The Committee acknowledges the Minister's detailed response

explaining provisions which, as he states, are common to

many Acts administered under the "Industry and Commerce"

portfolio. The Committee repeats comments made in the Eleventh Report with respect to the Customs and Excise

Amendment Bill that the question of appeals against

decisions under the Customs Act is at present under review by the Administrative Review Council. While drawing the

attention of the Senate to the Ministerial explanation, the

Committee repeats that these provisions might still be

regarded, under principle 1(a)(i), as trespassing unduly on

personal rights and liberties.

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Clause 11 - Insertion of new section: Rebate of duty in

respect of diesel fuel used for certain purposes

This clause proposes to amend the Excise Act 1901 in the same terms as are applicable to proposed amendments to the Customs Act 1901.

Comments made in relation to clause 5 are therefore also

applicable to this clause.

Clause 13 - Insertion of new section: Power of officers

for purposes of section 78A

This clause proposes to amend the Excise Act 1901 in the same terms as are applicable to proposed amendments to the

Customs Act 1901.

Comments made in relation to clause 7 are therefore also

applicable to this clause.

DROUGHT ASSISTANCE (PRIMARY PRODUCERS) BILL 1982

12. The purpose of this Bill is to provide drought assistance through a subsidy on interest payments, and a subsidy on

fodder bought by a farmer to feed his own drought affected

sheep and cattle.

13. The Committee draws the attention of the Senate to the

following clauses of the Bill.

Clause 3 - Eligible primary producers

This clause appropriates a sum for the payments to "eligible primary producers". Clause 3(2) states that the criteria for eligibility will be determined by the Minister

by notice in the Gazette.

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The Committee brings this provision for major Ministerial

determination to the attention of the Senate under

principle 1 (a)(iv) in that it might be regarded as

inappropriately delegating legislative power.

Clause 9 - Conditions

Clause 9(1) states that payments to States for the purpose

of this Act shall be subject to such conditions as the Minister may make in the arrangements with a State Minister

as provided for under clause 5. Under clause 9(2)(a), the

Minister is empowered to request a State Minister to report

on the carrying out of the arrangement, and under clause

9(2)(b), the Minister may compel repayment of whole or part

of the amount if he is satisfied that a State has failed to

fulfil a condition of the arrangement.

The Commmittee acknowledges that administrative arrangements for such a relief scheme need to be flexible,

yet it brings this clause to the attention of the Senate

under principle 1(a)(iv) in that it might be regarded as

inappropriately delegating legislative power.

Alan Missen Chairman 20 October 1982