2019-2020-2021

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

INVESTMENT FUNDS LEGISLATION AMENDMENT BILL 2021

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the M i n i s t e r f o r F i n a n c e ,

S e n a t or t he H on Simon Birmingham)

 

T a bl e o f a b b r e vi a tio n s a n d c o m m o n t e r m s

 

A bb re v i a t i on or c o m m on te r m	Description
Accountable authority	see section 12 of the PGPA Act
Act	means the Investment Funds Legislation Amendment Act 2021 to which this Bill relates
Acts Interpretation Act	means the Acts Interpretation Act 1901
A g e n c y	means the F u t u r e Fund M a n a g e m e n t A g e n c y established by section 74 of the Future Fund Act
APS	means the Australian Public Service established by section 9 of the Public Service Act
ATSILSFF	means the Aboriginal and Torres Strait Islander Land and Sea Future Fund established by section 9 of the ATSILSFF Act
ATSILSFF Act	means the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018
COAG Reform Fund	means the COAG Reform Fund established by section 5 of the  COAG Reform Fund Act 2008
DCAF	means the DisabilityCare Australia Fund established by section 10 of the DCAF Act
DCAF Act	means the DisabilityCare Australia Fund Act 2013
Emergency Management Minister	has the same meaning as in the ERF Act
ERF Act	means the Emergency Response Fund Act 2019
ERF	means the Emergency Response Fund established by section 9 of the ERF Act
ERF Special Account	means the Emergency Response Fund Special Account established by section 12 of the ERF Act
Fair Work Act	means the Fair Work Act 2009
Fair work instrument	has the same meaning as in the Fair Work Act
Finance Department	means the Department administered by the Finance Minister
Finance Minister	has the same meaning as defined in section 8 of the PGPA Act
FDF	means the Future Drought Fund established by section 10 of the FDF Act
FDF Act	means the Future Drought Fund Act 2019
FOI Act	means the Freedom of Information Act 1982
Future Fund	means the Future Fund established by section 11 of the Future Fund Act
Future Fund Act	means the Future Fund Act 2006
Future Fund Board	means the Future Fund Board of Guardians established by section 34 of the Future Fund Act
Future Fund Chair	means the Chair of the Future Fund Board appointed under subsection 38(2) of the Future Fund Act
Future Fund Special Account	means the Future Fund Special Account established by section 12 of the Future Fund Act
Health Minister	means the Minister administering the National Health Act 1953
Legislation Act	means the Legislation Act 2003
MRFF	means the Medical Research Future Fund established by section 11 of the MRFF Act
MRFF Act	means the Medical Research Future Fund Act 2015
MRFF Health Special Account	means the Medical Research Future Fund Health Special Account established by section 23 of the MRFF Act
MRFF Special Account	means the Medical Research Future Fund Special Account established by section 14 of the MRFF Act
NRRA	means the body known as the National Recovery and Resilience Agency that was established as an Executive Agency under section 65 of the Public Service Act
PGPA Act	means the Public Governance, Performance and Accountability Act 2013
Priorities	means the Australian Medical Research and Innovation Priorities determined under section 32E of the MRFF Act
Public Service Act	means the Public Service Act 1999
Responsible Ministers	means the following: (a)       the Treasurer; and (b)       the Finance Minister
SRC Act	means the Safety, Rehabilitation and Compensation Act 1988
SRC Regulations	means the Safety, Rehabilitation and Compensation Regulations 2019
Strategy	means the Australian Medical Research and Innovation Strategy determined under section 32D of the MRFF Act

INVESTMENT FUNDS LEGISLATION AMENDMENT BILL 2021

 

OUTLINE

 

The Investment Funds Legislation Amendment Bill 2021 (the Bill) gives effect to a range of amendments agreed by the Australian Government to streamline the operation of the Australian Government’s investment funds.

 

The Bill amends the Future Fund Act to enact a new employment framework for staff of the Agency. The new employment framework reinforces the independence of the Future Fund Board from the Australian Government and better aligns the framework with norms in the financial services industry. Under the new framework, the Future Fund Chair will, on behalf of the Commonwealth, engage staff and determine the terms and conditions of employment. Existing staff members will have their terms and conditions of employment and accrued entitlements preserved under the new framework and staff will still be classified as Commonwealth employees. The Bill makes consequential amendments to the legislation governing the Government’s other investment funds (the ATSILSFF Act, the DCAF Act, the ERF Act, the FDF Act and the MRFF Act) to reflect the new employment framework for the Agency.

 

The Bill also amends the FOI Act to provide a partial exemption for documents handled by the Future Fund Board and the Agency in respect of the Board’s investment activities. This will reduce the risk of disclosing highly sensitive confidential and commercial material and align the treatment of the Future Fund Board and the Agency under the FOI Act with that of other entities that deal regularly with commercial information, such as NBN Co and Export Finance Australia.

 

The operation of the MRFF will be streamlined by a number of provisions in the Bill. Now that the MRFF has been fully capitalised, the methodology for calculating the maximum annual disbursement from the MRFF will be simplified by specifying a fixed maximum disbursement amount of $650 million per year from 2022-23. The responsible Ministers will be required to review the legislated amount at least every five years, and will have the ability to update the amount for future years via a disallowable legislative instrument. This amendment will assist in the orderly planning and administration of medical research grants programs. It will also isolate the determination of disbursements from financial market fluctuations, while supporting the perpetual funding objective of the MRFF and better aligning the benchmark rate of return for MRFF with the cost of health-related services.

 

The responsible Ministers intend to issue a new investment mandate to the Future Fund Board following commencement of the legislation, directing it to pursue a higher average annual benchmark rate of return for the MRFF over the long term. This will align the MRFF’s investment mandate with other risk-seeking investment funds, creating operational efficiencies for the Future Fund Board, and be consistent with the objective of protecting the capital of the MRFF into the future.

 

The Bill also makes further minor amendments to the MRFF Act, to streamline the administration of the MRFF. These changes will:

-           make state and territory governments (including state and territory government entities) eligible to receive funding directly from the MRFF Health Special Account, given their significant expertise in certain areas of health and medical research;

-           extend and align the timing of the Strategy and the Priorities, to reduce the ongoing consultation burden on the health and medical research sector and reflect the enduring, long-term approach to medical research and medical innovation;

-           clarify that grants can be paid in instalments (for example, to clarify that milestone payments can be paid to grant recipients);

-           clarify that the Health Minister can request debits from the MRFF Special Account without having to identify each individual grant to which a debit relates (grant outcomes would continue to be transparently reported on the Department of Health’s website); and

-           allow copies of administrative directions to debit the MRFF Special Account (for the purposes of paying grants) to be received by senior departmental officials instead of Ministers, in instances where the Finance Minister has delegated the power to make a transfer in accordance with the MRFF Act.

 

The Bill also amends the ERF Act to transfer the administrative responsibility for expenditure from the ERF to the NRRA, following the Australian Government’s decision to establish the NRRA in the Prime Minister and Cabinet portfolio to support local communities during the relief and recovery phases following major disasters, as well as the pre-disaster mitigation and resilience phases. The administrative responsibility for expenditure was formerly the responsibility of Emergency Management Australia in the Department of Home Affairs and transferred to the NRRA on 1 July 2021.

 

In addition, the Bill makes some administrative amendments to the ERF Act, for consistency with the legislation for other investment funds, to:

-           require the Emergency Management Minister to request that the Finance Minister transfer amounts from the ERF Special Account to the COAG Reform Fund (for the purposes of channelling grants to a State or Territory); and

-           allow copies of administrative directions in relation to transfers between special accounts to be exchanged between senior departmental officials instead of Ministers, in instances where the Finance Minister has delegated the relevant power in accordance with the ERF Act.

 

The reporting obligations in Part 5 of the MRFF Act and Part 5 of the ERF Act will not change. These obligations continue the appropriate level of public reporting on the grants provided from the MRFF and the ERF, consistent with requirements under the Commonwealth Grant Rules and Guidelines.

 

Financial Impact Statement

 

The changes to the disbursements framework for the MRFF will specify a fixed maximum annual disbursement of $650 million from 2022-23. This maintains the Government’s commitment to funding the commitments outlined in the MRFF 10-year investment plan and isolates the determination of disbursements from financial market fluctuations, while supporting the perpetual funding objective of the MRFF.

 

The legislative amendments to the MRFF will enable the Government to issue a new investment mandate with a higher benchmark rate of return that will increase expected earnings and better align the fund’s benchmark rate of return with the growth in the health-related costs. This will have a positive impact on the underlying cash and fiscal balances, reflecting higher projected investment earnings (net of investment costs). A higher benchmark rate of return will increase the risk of short-term losses, but that will be offset by higher expected earnings over the medium to longer term.

 

The changes to the Future Fund Act, the FOI Act, the ERF Act and the administrative amendments to the MRFF Act are not expected to have any financial impact.

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Investment Funds Legislation Amendment Bill 2021

Overview of Bill

 

The Investment Funds Legislation Amendment Bill 2021 will streamline the operation of the Australian Government’s investment funds by enacting a new employment framework for staff of the Agency, providing a partial exemption from the FOI Act, amending the disbursements framework for the MRFF and making a number of administrative amendments to streamline the operation of the MRFF Act and the ERF Act.

 

Human rights implications

 

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 . The Bill engages the following right:

-           Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) - the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

Right of everyone to the enjoyment of the highest attainable standard of physical and mental health

 

Article 12 of the ICESCR recognises the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. Article 12(2) refers more specifically to taking steps to prevent, treat and control diseases and create conditions to assure medical service and attention in the event of sickness.

 

The MRFF is a perpetual investment fund that provides hundreds of millions of dollars every year to make grants of financial assistance for medical research and medical innovation.

 

The changes in this Bill implement a new disbursements framework for the MRFF. Under the new framework, the responsible Ministers could amend the MRFF’s investment mandate to increase the benchmark rate of return. This will increase expected earnings over the long term, support the perpetual funding objective of the MRFF and allow a fixed maximum annual disbursement of $650 million from 2022-23. This will increase the certainty of funding from the MRFF and help the Government to meet its commitments under the MRFF 10-year investment plan.

 

The disbursements from the MRFF will be used to fund important medical research and medical innovation projects that can save lives and improve health outcomes for Australians. The MRFF provides funding based on areas of national priority identified by an expert advisory board and widespread consultation. MRFF funding is directed towards a wide range of activities, including but not limited to supporting clinical trials and developing new drugs, devices, treatments and cures. Funding from the MRFF helps medical researchers develop their ideas, which can result in life-changing medical discoveries that can improve health outcomes for all Australians.

 

Conclusion

 

This Bill is compatible with human rights because it promotes the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, enshrined in Article 12(2) of the ICESCR. The Bill will allow for higher earnings over the long term, which will be used to fund important medical research and medical innovation projects to benefit the health and wellbeing of all Australians.

 

 

 

INVESTMENT FUNDS LEGISLATION AMENDMENT BILL 2021

 

 

NOTES ON CLAUSES

Preliminary

Clause 1 - Short title

1.                   Clause 1 is a formal provision specifying the short title of the Act - that is, the Investment Funds Legislation Amendment Act 2021 .

Clause 2 - Commencement

2.                   This clause would provide for the commencement of the Act, as set out in the table. Item 1 in the table provides that sections 1 to 3 (as well as anything in the Act not elsewhere covered by the table) would commence on the day the Act receives the Royal Assent.

3.                   Item 2 in the table provides that Schedule 1 would commence on a single day to be fixed by Proclamation. However, if Schedule 1 does not commence within 6 months of the Royal Assent, it will commence on the day after the end of that 6-month period.

4.                   Item 3 in the table provides that Schedules 2, 3 and 4 would commence the day after the Act receives the Royal Assent.

5.                   Subclause 2(2) would provide that any information in column 3 of the table is not part of the Act. Information may be inserted in column 3 of the table, or information in it may be edited, in any published version of the Act.

Clause 3 - Schedules

6.                   This clause provides that legislation that is specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule concerned, and that any other item in a Schedule to the Act has effect according to its terms.

 

 

Schedule 1 - Staff of the Future Fund Management Agency

Part 1 - Amendments

Division 1 - Main amendments

Future Fund Act 2006

Item 1  

7.                   This item would insert additional definitions into section 5 of the Future Fund Act, to support the operation of provisions in the Act.

8.                   These definitions are discussed throughout the Explanatory Memorandum where they are relevant to the operation of a particular clause.

Item 2

9.                   Item 2 would repeal section 77 of the Future Fund Act, which provides for the engagement of staff of the Agency under the Public Service Act, and replace it with a new section 77.

10.               Under new subsection 77(1), the Future Fund Chair would have the power to employ, on behalf of the Commonwealth, employees of the Agency. The Future Fund Chair would only be permitted to employ such employees that the Future Fund Chair thinks are necessary in connection with the performance of any of the Agency’s functions.

11.               New subsection 77(2) would ensure that the Future Fund Chair, on behalf of the Commonwealth, would have all of the necessary rights, duties and powers to employ and engage employees of the Agency.

12.               Under new subsection 77(3), the Future Fund Chair would have the power to, from time to time, determine in writing the terms and conditions of employment. Such a written determination may apply to one or more employees of the Agency. This would represent a change from the current employment framework, where staff of the Agency are engaged under the Public Service Act.

13.               Note 1 to subsection 77(3) would direct readers’ attention to the National Employment Standards, which apply to certain terms and conditions of employment for Agency employees.

14.               Note 2 to subsection 77(3) would clarify that matters such as superannuation, compensation, long service leave and maternity leave are dealt with by other Commonwealth laws.

15.               New subsection 77(4) would protect the minimum terms and conditions of employment for Agency employees, by providing that a determination by the Future Fund Chair under new subsection 77(3) (to determine terms and conditions of employment for Agency employees) would not have effect to the extent that it reduces an individual term or condition applicable under a fair work instrument (as defined in the Fair Work Act).

16.               The Note to new subsection 77(4) would clarify that a determination under new subsection 77(3) would not apply to the extent that it would reduce a benefit to an Agency employee under the National Employment Standards. This operates to protect the minimum terms and conditions of employment for Agency employees under Commonwealth law.

17.               Subsection 77(5) would permit the Future Fund Chair, under a new subsection 77(3) determination, to apply, adopt or incorporate any provisions of a fair work instrument with or without modification. This would provide the Future Fund Chair with the necessary legislative authority to determine terms and conditions of employment for Agency employees that differ from those provided in a fair work instrument.

18.               The Note to subsection 77(5) confirms that a determination under new subsection 77(3) may apply, adopt or incorporate, with or without modification, any of the provisions of the National Employment Standards. However, as clarified in the Note, modifications to standards would be of no effect to the extent that they would reduce a benefit of a term or condition applicable to an Agency employee. In effect, this means that modifications made by the Future Fund Chair (under new subsection 77(5)) cannot reduce a benefit to an Agency employee as provided under the minimum standards in the National Employment Standards.

19.               Subsection 77(6) would clarify that the staff of the Agency consists of persons employed under subsection 77(1). This subsection forms the basis for the new definition of “staff of the Agency” in section 5 (see item 1).

20.               The Bill would ensure that Agency employees continue to be entitled to the National Employment Standards and are entitled to whichever terms and conditions are more beneficial out of:

·          the terms and conditions determined by the Future Fund Chair under new subsection 77(3);

·          the terms and conditions that applied immediately before the transition (as preserved by item 14(2)(c) of Schedule 1), unless varied or revoked by a subsection 77(3) determination; and

·          the terms and conditions of any fair work instrument that applies to Agency employees, including any enterprise agreement that the Future Fund Chair subsequently makes with Agency employees.

21.               Item 2 would also insert new section 77A, which would stipulate the interaction between the Future Fund Act and Commonwealth fair work legislation, given both relate to the employment of Agency employees.

22.               New subsection 77A(1) would provide that the Future Fund Act has effect subject to the Fair Work Act and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. This ensures that Agency employees are entitled to the minimum terms and conditions provided by the Fair Work Act, including the National Employment Standards and any modern award applicable to Agency employees.

23.               Subsection 77A(2) would limit the scope of subsection 77A(1) to the Acts specified, by stating that the subsection is not intended to imply anything about the relationship between the Future Fund Act and Acts other than those specified in new subsection 77A(1).

Item 3

24.               Item 3 would omit the term “Agencies” (within the meaning of the Public Service Act) and substitute it with a reference to “APS Agencies”, which is one of the new terms inserted into section 5 (Definitions) of the Act. The insertion of this definition would avoid unnecessary repetition throughout the Act.

Item 4

25.               Item 4 would repeal section 79 of the Act, which specifies that the Future Fund Board may not direct the Future Fund Chair in relation to performance of the Future Fund Chair’s functions under the PGPA Act or the Public Service Act, and allow for the insertion of 5 new sections. Item 4 would also insert new sections 79, 79A, 79B, 79C, and 79D.

26.               New s ections 79 and 79A would provide mobility opportunities in the APS for employees of the Agency.

27.               The new section 79 would allow the Future Fund Chair to arrange, in writing, for an employee of the Agency to be seconded from the Agency to an APS Agency for a specified period.

28.               New section 79A would provide a mechanism for employees of the Agency to make a voluntary move to an APS Agency in the same way that APS employees can voluntarily transfer from one APS Agency to another under section 26 of the Public Service Act.

29.               New subsection 79A(1) would deem that section 26 of the Public Service Act applies in relation an employee of the Agency, as if the employee were an APS employee, the Agency were an APS Agency and the Chair were an Agency Head. This new subsection continues the status quo of allowing voluntary moves between the Agency and APS Agencies.

30.               New subsection 79A(2) would provide that an employee of the Agency who moves to an APS Agency under section 26 of the Public Service Act is entitled to have his or her employment, as an employee of the Agency, treated as if it were employment as an APS employee, and at a corresponding classification as agreed between the Future Fund Chair and the Australian Public Service Commissioner.

31.               New section 79B would require the Future Fund Chair to determine a Code of Conduct for the Agency, as employees of the Agency would no longer be bound by the APS Code of Conduct at section 13 of the Public Service Act. For certainty, the Future Fund Chair would not be able to delegate these functions with respect to the Agency Code of Conduct.

32.               New paragraph 79B(1)(a) would require the Future Fund Chair to determine, in writing, a Code of Conduct for the Agency as soon as practicable after commencement of the section.

33.               New paragraph 79B(1)(b) would allow the Future Fund Chair to vary, in writing, the Code of Conduct after first determining the Code of Conduct under new paragraph 79B(1)(a). This would provide flexibility for the Code of Conduct to be updated over time.

34.               New subsection 79B(2) would specify that the Code of Conduct applies to the Future Fund Chair as well as employees of the Agency.

35.               New subsection 79B(3) would require the Agency Code of Conduct to be consistent with the APS Code of Conduct, as far as practicable. This would ensure that employees of the Agency are subject to broadly similar expectations of conduct as APS employees, given their status as Commonwealth employees.

36.               New subsection 79B(4) would require the Agency Code of Conduct to be published on the Agency’s website. This would ensure that the Agency Code of Conduct is available to the general public for transparency purposes, consistent with the APS Code of Conduct, which is also available online.

37.               New subsection 79B(5) would clarify that the Agency Code of Conduct is not a legislative instrument. This is because it has an administrative rather than a legislative character.

38.               New subsection 79B(6) would make it clear that the ability for the Future Fund Chair to vary the Code of Conduct under new paragraph 79B(1)(b) does not affect the application of subsection 33(3) of the Acts Interpretation Act. The effect of this is that the Future Fund Chair has the power to repeal, rescind, revoke, amend, or vary any determination made under new subsection 79B(1), under like conditions to those powers exercisable in making the determination.

39.               New section 79C would require the Future Fund Chair to determine Values for the Agency, as employees of the Agency would no longer be bound by the APS Values at section 10 of the Public Service Act. For certainty, the Future Fund Chair would not be able to delegate these functions with respect to the Agency Values.

40.               New paragraph 79C(1)(a) would require the Future Fund Chair to determine, in writing, Values for the Agency as soon as practicable after commencement of the section.

41.               New paragraph 79C(1)(b) would allow the Future Fund Chair to vary, in writing, the Values after first determining the Values under paragraph 79C(1)(a). This would provide flexibility for the Values to be updated over time.

42.               New subsection 79C(2) would specify that the Future Fund Chair must uphold and promote the Values.

43.               New subsection 79C(3) would specify that employees of the Agency must uphold the Values.

44.               New subsection 79C(4) would require the Agency Values to be consistent with the APS Values, as far as practicable. This would ensure that employees of the Agency are subject to broadly similar expectations of values as APS employees, given their status as Commonwealth employees.

45.               New subsection 79C(5) would require the Agency Values to be published on the Agency’s website. This would ensure that a document specifying the Agency Values is available to the general public for transparency purposes, consistent with the APS Values, which is also available online.

46.               New subsection 79B(6) would clarify that a document specifying the Agency Values is not a legislative instrument. This is because it has an administrative rather than a legislative character.

47.               New subsection 79B(7) would make it clear that the ability of the Future Fund Chair to vary the Values under new paragraph 79C(1)(b) does not affect the application of subsection 33(3) of the Acts Interpretation Act. The effect of this is that the Future Fund Chair has the power to repeal , rescind, revoke, amend, or vary any determination made under subsection 79C(1), under like conditions to those powers exercisable in making the determination.

48.               New section 79D would provide that the Future Fund Chair is not subject to directions from the Future Fund Board on certain matters.

49.               New subsection 79D(1) would provide that the Future Fund Chair is not subject to direction by the Future Fund Board in relation to the Future Fund Chair’s functions under the PGPA Act in relation to the Agency. This replicates the existing provision in paragraph 79(a) of the Future Fund Act, which operates to avoid possible conflicts of interest between the Future Fund Chair’s powers and responsibilities as in relation to the Agency and the Agency’s requirement to follow directions made by the Future Fund Board.

50.               New subsection 79D(2) would clarify that the Future Fund Chair is not subject to direction by the Future Fund Board in relation to the performance of the Future Fund Chair’s functions under new provisions relating to engaging employees of the Agency (new section 77), arranging for secondments (new section 79) and voluntary moves to the APS (new section 79A), determining a Code of Conduct (new section 79B) and Values (new section 79C) for the Agency, and engaging consultants and secondees (new section 78).

Item 5

51.               Item 5 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in paragraph 83B(1)(f) and replace it with a reference to “an employee of the Agency that is at a level equivalent to that of an SES employee”. This is a consequential change that is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

Item 6

52.               Item 6 is a consequential change that would amend the Note following subsection 83B(1) as the term “acting SES employee” is no longer referenced in the subsection.

Item 7

53.               Item 7 would insert new section 83C, which would allow the Future Fund Chair to delegate certain powers to an employee of the Agency who is at a level equivalent to an SES employee.

54.               The Agency has a well-defined organisational structure, with a leadership committee consisting of senior staff members that are responsible for divisions and/or large functions within the Agency. Delegations under this item would be limited to the most senior members in the Agency (for example, staff in the leadership committee), to ensure that the delegates have the appropriate level of skills and experience to perform the delegated power.

55.               New subsection 83C(1) would allow the Future Fund Chair to delegate, by writing, powers under new sections 77, 78, 79 and 79A, which relate to engaging employees and consultants for the Agency and arranging for employees of the Agency to be seconded to an APS Agency or to make a voluntary move to the APS. The Note to new subsection 83C(1) would direct readers to section 2B of the Acts Interpretation Act, which provides a definition of “SES employee”.

56.               New subsection 83C(2) would require any delegates, in exercising delegated powers, to comply with any directions of the Future Fund Chair.

57.               New subsections 83C(3) and 83C(4) would provide for the subdelegation of the powers listed in new subsection 83C(1). These subsections would be based on the subdelegations currently permitted under the subsections 78(7) to 78(11) of the Public Service Act.

58.               New subsection 83C(3) would allow an employee of the Agency who has been delegated powers under new subsection 83C(1) (the first delegate) to further delegate, by writing, any of those same powers to another employee of the Agency (the second delegate). Subdelegations would be limited to employees of the Agency who hold, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee. Where the first delegate is subject to directions of the Future Fund Chair, the first delegate must give corresponding directions to the second delegate. This is consistent with the requirements for other delegations to Agency employees and ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

59.               New subsection 83C(4) would state that a power exercised under new subsection 83C(3), to subdelegate powers to another Agency employee, would be taken to be exercised by the Chair for the purposes of the Future Fund Act.

Division 2 - Consequential amendments

Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018

Item 8

60.               Item 8 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in the ATSILSFF Act and replace it with a reference to “an employee of the Agency who holds, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee”. This consequential change is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

61.               This change will allow the Finance Minister to continue to delegate relevant powers under the ATSILSFF Act to senior staff members in the Agency. As is currently the case, the legislation would not require the Finance Minister to delegate any powers. The powers that are able to be delegated under the ATSILSFF Act will not change.

DisabilityCare Australia Fund Act 2013

Item 9

62.               Item 9 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in the DCAF Act and replace it with a reference to “an employee of the Agency who holds, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee”. This consequential change is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

63.               This change will allow the Finance Minister to continue to delegate relevant powers under the DCAF Act to senior staff members in the Agency. As is currently the case, the legislation would not require the Finance Minister to delegate any powers. The powers that are able to be delegated under the DCAF Act will not change.

Item 10

64.               Item 10 would amend the Note following subsection 52(3) of the DCAF Act to remove a reference to “acting SES employee”, which is no longer referenced in the subsection. This would be a consequential change to that made by item 9 above.

Emergency Response Fund Act 2019

Item 11

65.               Item 11 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in the ERF Act and replace it with a reference to “an employee of the Agency who holds, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee”. This consequential change is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

66.               This change will allow the Finance Minister to continue to delegate relevant powers under the ERF Act to senior staff members in the Agency. As is currently the case, the legislation would not require the Finance Minister to delegate any powers. The powers that are able to be delegated under the ERF Act will not change.

 

Future Drought Fund Act 2019

Item 12

67.               Item 12 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in the FDF Act and replace it with a reference to “an employee of the Agency who holds, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee”. This consequential change is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

68.               This change will allow the Finance Minister to continue to delegate relevant powers under the FDF Act to senior staff members in the Agency. As is currently the case, the legislation would not require the Finance Minister to delegate any powers. The powers that are able to be delegated under the FDF Act will not change.

Medical Research Future Fund Act 2015

Item 13

69.               Item 11 would remove a reference to “an SES employee, or acting SES employee, of the Agency” in the MRFF Act and replace it with a reference to “an employee of the Agency who holds, or performs the duties of, a position within the Agency that is at a level equivalent to that of an SES employee”. This consequential change is required because once the Agency ceases to employ staff under the Public Service Act, the Agency would also cease to have SES employees (as defined in that Act).

70.               This change will allow the Finance Minister to continue to delegate relevant powers under the MRFF Act to senior staff members in the Agency. As is currently the case, the legislation would not require the Finance Minister to delegate any powers. The powers that are able to be delegated under the MRFF Act will not change.

 

Part 2 - Transitional

Item 14

71.               Item 14 provides transitional provisions to ensure that existing terms, conditions and entitlements to benefits continue to apply to employees of the Agency as they transition from employment under the Public Service Act to employment under the Future Fund Act.

72.               Subitem 14(1) sets the scope for item 14, specifying that the item applies to a person who was a member of the staff of the Agency who was employed under the Public Service Act immediately before the commencement of the item.

73.               As per clause 2 of the Bill, this part of the Bill would commence on a single day to be fixed by Proclamation. However, if Schedule 1 does not commence within 6 months of the Royal Assent, it will commence on the day after the end of that 6-month period.

74.               Subitem 14(2) would provide the mechanism to transition employees of the Agency from employment under the Public Service Act to employment under the Future Fund Act, on and from commencement of the changes. This item would ensure that employees of the Agency are not unfairly disadvantaged by the amendments.

75.               This would be achieved by specifying that an employee of the Agency who is engaged under the Public Service Act immediately before commencement of the item would be taken, on and from commencement, to have ceased being employed under the Public Service Act after commencement, and become employed under subsection 77(1) of the Future Fund Act. Employees under the new employment arrangements (under the Future Fund Act) would have the same terms and conditions as the old employment arrangements (under the Public Service Act), and would be entitled to employment benefits equivalent to the entitlements they had immediately before the change to employment arrangements.

76.               Subitem 14(3) would provide that paragraph 2(c) of item 14, which transitions employees’ existing terms and conditions over to the new employment arrangements, is subject to any determinations by the Future Fund Chair under subsection 77(3) of the Future Fund Act. New subsection 77(3) would allow the Future Fund Chair to determine the terms and conditions of employment under the new employment arrangements. This would allow the terms and conditions of employment to be varied, following commencement of the changes, in accordance with those terms or conditions or by law, award, determination or agreement.

77.               Subitem 14(4) provides that the service of an Agency employee under new subsection 77(1) is taken, for all purposes, to have been continuous with his or her service as an APS employee (before commencement of the changes in Schedule 1 to the Bill).

78.               Subitem 14(5) ensures that the changes would not affect any promotion, performance management or disciplinary actions that started before the commencement of item 14. This would provide for the continuation of important organisational processes as the Agency transitions to the new employment framework.

79.               Subitem 14(6) provides that, to avoid doubt, employees are not entitled to receive any payment or other benefit merely because they cease to be employed under the Public Service Act. This provision refers to Agency employees transitioning from employment under the Public Service Act to employment under the Future Fund Act (as per paragraph 14(2)(a)), and does not apply to employees leaving the Agency entirely.

80.               Subitem 14(7) would ensure continuity of staffing processes for the Agency through the transition. This would be achieved by providing that the Agency’s staffing procedures that were in place immediately prior to the transition would continue to apply after the transition in respect of incomplete staffing processes and things done before the transition by, for or in relation to the Agency or an Agency employee.

81.               Subitem 14(8) would allow the Finance Minister to make rules, by way of legislative instrument, that prescribe how Agency staffing processes continue to apply under subitem 7.

82.               Subitem 14(9) would permit the Future Fund Chair to take disciplinary action against an Agency employee in relation to the conduct of that employee that occurred before the transition, so long as that conduct was in connection with the employee’s employment as an APS employee in the Agency. This would provide for continuity of any disciplinary action relating to the prior conduct of an employee.

83.               Section 33 of the Public Service Act (including regulations made under that section), provide certain rights of review to non-SES APS employees. Subitem 14(10) would provide that those rights of review would continue to apply in relation to actions taken while an Agency employee was engaged as an APS employee (before the transition). This would ensure that Agency employees retain their review rights after the transition, in respect of actions before the transition.

84.               Agency employees’ review rights in relation to actions after the transition would be determined by their terms and conditions of employment under new subsection 77(3).

85.               Subitem 14(11) would insert a definition for “staffing procedures” for the purposes it item 14. The effect of this subitem is to define the types of staffing procedures of the Agency that would continue to apply from commencement of the item under subitem 14(7), and that could be the subject of rules by the Finance Minister under subitem 14(8).

Item 15

86.               Item 15 would provide transitional provisions to ensure that the SRC Act continues to apply to employees of the Agency as they transition from engagement under the Public Service Act to engagement under the Future Fund Act. The SRC Act establishes the workers’ compensation scheme for Commonwealth employees.

87.               The amendments made by this item would be accompanied by an amendment to the SRC Regulations, so that the Agency is covered by paragraph (c) of the definition of “Entity” in subsection 4(1) of the SRC Act.

88.               Subitem 15(1) would set the scope for item 15, by specifying that the item would apply to a person if that person was a member of the staff of the Agency before commencement of the item (whether or not that person was a member of the staff of the Agency immediately before commencement of the item), was an employee within the meaning of the SRC Act before the commencement of the item, and suffered an injury (within the meaning of the SRC Act) before the commencement of the item.

89.               As per clause 2 of the Bill, this part of the Bill would commence on a single day to be fixed by Proclamation. However, if Schedule 1 does not commence within 6 months of the Royal Assent, it will commence on the day after the end of that 6-month period.

90.               Subitem 15(2) would provide that the SRC Act applies on and from commencement of the item, as if the person had been an employee of the Agency in its new capacity during the period that the person was a member of the staff of the Agency in its old capacity. The purpose of this subitem is to ensure that the SRC Act continues to apply to persons within the scope of subitem 15(1) on and from the commencement of the item.

91.               Subitem 15(3) would deem that for the purposes of this item, the Future Fund Management Agency in its old capacity means the Future Fund Management Agency in its capacity as an Entity covered by paragraph (a) of the definition of Entity in subsection 4(1) of the SRC Act.

92.               Subitem 15(4) would deem that for the purposes of this item, the Future Fund Management Agency in its new capacity means the Future Fund Management Agency in its capacity as an Entity covered by paragraph (c) of the definition of Entity in subsection 4(1) of the SRC Act.

Item 16

Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018

93.               Subitem 16(1) would provide for the continuation of certain delegations under the ATSILSFF Act following commencement of item 16. The delegations, which may be made under subsection 52(2) of the ATSILSFF Act, relate to powers that allow the Finance Minister (or delegate) to transfer funds from the ATSILSFF Special Account to the Future Fund Special Account for the purposes of covering costs that are common to the investment funds that are managed by the Future Fund Board.

94.               This subitem would ensure that any delegations under subsection 52(2) of the ATSILSFF Act that are in place immediately before the commencement of the item would continue to have effect after commencement.

95.               This transitional provision would relate to delegations made by the Finance Minister to a person who held, occupied or performed the duties, from time to time, of the Chief Executive Officer or the Chief Operating Officer of the Agency. These positions are held by senior executives in the Agency with a suitably high level of experience and qualifications to perform any of the powers that can be delegated under subsection 52(2) of the ATSILSFF Act.

96.               The delegations would continue to have effect after commencement of the item despite the positions ceasing to be SES positions as a result of removing Agency staff from employment under the Public Service Act.

DisabilityCare Australia Fund Act 2013

97.               Subitem 16(2) would provide for the continuation of certain delegations under the DCAF Act following commencement of item 16. The delegations, which may be made under subsection 52(3) of the DCAF Act, relate to powers that allow the Finance Minister (or delegate) to transfer funds from the DCAF Special Account to the Future Fund Special Account for the purposes of covering costs that are common to the investment funds that are managed by the Future Fund Board.

98.               This subitem would ensure that any delegations under subsection 52(3) of the DCAF Act that are in place immediately before the commencement of the item would continue to have effect after commencement.

99.               This transitional provision would relate to delegations made by the Finance Minister to a person who held, occupied or performed the duties, from time to time, of the Chief Executive Officer or the Chief Operating Officer of the Agency. These positions are held by senior executives in the Agency with a suitably high level of experience and qualifications to perform any of the powers that can be delegated under subsection 52(3) of the DCAF Act.

100.           The delegations would continue to have effect after commencement of the item despite the positions ceasing to be SES positions as a result of removing Agency staff from employment under the Public Service Act.

Emergency Response Fund Act 2019

101.           Subitem 16(3) would provide for the continuation of certain delegations under the ERF Act following commencement of item 16. The delegations, which may be made under subsection 59(2) of the ERF Act, relate to powers that allow the Finance Minister (or delegate) to transfer funds from the ERF Special Account to the Future Fund Special Account for the purposes of covering costs that are common to the investment funds that are managed by the Future Fund Board.

102.           This subitem would ensure that any delegations under subsection 59(2) of the ERF Act that are in place immediately before the commencement of the item would continue to have effect after commencement.

103.           This transitional provision would relate to delegations made by the Finance Minister to a person who held, occupied or performed the duties, from time to time, of the Chief Executive Officer or the Chief Operating Officer of the Agency. These positions are held by senior executives in the Agency with a suitably high level of experience and qualifications to perform any of the powers that can be delegated under subsection 59(2) of the ERF Act.

104.           The delegations would continue to have effect after commencement of the item despite the positions ceasing to be SES positions as a result of removing Agency staff from employment under the Public Service Act.

Future Drought Fund Act 2019

105.           Subitem 16(4) would provide for the continuation of certain delegations under the FDF Act following commencement of item 16. The delegations, which may be made under subsection 61(2) of the FDF Act, relate to powers that allow the Finance Minister (or delegate) to transfer funds from the FDF Special Account to the Future Fund Special Account for the purposes of covering costs that are common to the investment funds that are managed by the Future Fund Board.

106.           This subitem would ensure that any delegations under subsection 61(2) of the FDF Act that are in place immediately before the commencement of the item would continue to have effect after commencement.

107.           This transitional provision would relate to delegations made by the Finance Minister to a person who held, occupied or performed the duties, from time to time, of the Chief Executive Officer or the Chief Operating Officer of the Agency. These positions are held by senior executives in the Agency with a suitably high level of experience and qualifications to perform any of the powers that can be delegated under subsection 61(2) of the FDF Act.

108.           The delegations would continue to have effect after commencement of the item despite the positions ceasing to be SES positions as a result of removing Agency staff from employment under the Public Service Act.

Medical Research Future Fund Act 2015

109.           Subitem 16(5) would provide for the continuation of certain delegations under the MRFF Act following commencement of item 16. The delegations, which may be made under subsection 60(2) of the MRFF Act, relate to powers that allow the Finance Minister (or delegate) to transfer funds from the MRFF Special Account to the Future Fund Special Account for the purposes of covering costs that are common to the investment funds that are managed by the Future Fund Board.

110.           This subitem would ensure that any delegations under subsection 60(2) of the MRFF Act that are in place immediately before the commencement of the item would continue to have effect after commencement.

111.           This transitional provision would relate to delegations made by the Finance Minister to a person who held, occupied or performed the duties, from time to time, of the Chief Executive Officer or the Chief Operating Officer of the Agency. These positions are held by senior executives in the Agency with a suitably high level of experience and qualifications to perform any of the powers that can be delegated under subsection 60(2) of the MRFF Act.

112.           The delegations would continue to have effect after commencement of the item despite the positions ceasing to be SES positions as a result of removing Agency staff from employment under the Public Service Act.

 

Schedule 2 - Freedom of Information

Freedom of Information Act 1982

Item 1

113.           Item 1 would provide a partial exemption from the operation of the FOI Act for the Future Fund Board and the Agency, in relation to documents in respect of the investment activities of the Future Fund Board.

114.           The Future Fund Board and the Agency regularly produce, negotiate and receive documents that include confidential, competitive and commercially sensitive information. The public release, and potential for public release, of such information could compromise the ability of the Future Fund Board and the Agency to implement investment strategies effectively on behalf of the Government. Any compromise could have a very significant impact, given the Future Fund Board manages over $225 billion of Government assets as at 31 March 2021.

115.           The partial exemption from the operation of the FOI Act will reduce the risk of disclosing highly sensitive commercial and proprietary material. For example, the Future Fund Board is required by the Future Fund Act to invest through investment managers. Private equity and other investment managers place significant commercial value on their ability to operate and trade with proprietary information and in confidence. The potential risk of disclosing highly sensitive commercial and proprietary material about their activities, or proposed activities, is a risk to investment managers’ effective engagement with the Future Fund Board and the Agency.

116.           In some situations, this has led to the Future Fund Board and the Agency having access to less information from investment managers than they would normally expect, which presents an investment and governance risk. In particular, this presents the risk of negative impacts on investment outcomes, reduced access to investment opportunities and it could also prejudice investment managers in their dealing with other market participants. This in turn could make the Future Fund Board and the Agency less attractive clients.

117.           Given the Future Fund Board’s important role in seeking to strengthen the Commonwealth’s balance sheet, the growing size and complexity of the funds managed by the Future Fund Board, and that competing institutional investors in global markets are generally not subject to these requirements, there is significant value and public benefit in enabling the Future Fund Board and the Agency to compete on an even footing in global institutional investment markets.

118.           The exemption in this item would be consistent with the treatment of other entities that deal regularly with commercial information. This includes NBN Co, which is exempt for documents in respect of its commercial activities and Export Finance Australia, which has an exemption for documents including in relation to its insurance and financial services and national interest transactions.

119.           The exemption is intended to cover documents including (but not limited to) those in relation to the Future Fund Board’s or the Agency’s past, current or proposed investment strategies for the Australian Government’s investment funds, the evaluation of potential or current investments and investment managers, investing amounts, managing and realising investments and acquiring and managing derivatives. The FOI Act will continue to apply with respect to documents that do not relate to investment activities. Other transparency and accountability mechanisms will continue to apply including under the PGPA Act and the Future Fund Act.

 

 

Schedule 3 - Medical Research Future Fund

Part 1 - Amendments

Medical Research Future Fund Act 2015

Item 1

120.           This item would update the simplified outline of the MRFF Act to clarify that grants channelled through the MRFF Health Special Account can be paid to certain persons as well as certain bodies. This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” under the Acts Interpretation Act.

Item 2

121.           Item 2 would update the simplified outline of the MRFF Act to specify that the limit on the amount that can be debited from the MRFF Special Account each financial year is for the purposes of paying grants from the MRFF. These purposes are distinct from debiting the MRFF Special Account in relation to costs and other obligations incurred by the Future Fund Board in managing the MRFF under sections 18 and 19 of the MRFF Act.

Item 3

122.           Item 3 would update the simplified outline of the MRFF Act to remove a reference to the maximum annual distribution being determined by the Future Fund Board. This change reflects the changes to the MRFF Act made by this Bill, whereby the Future Fund Board would no longer be responsible for determining the maximum annual distribution amount from the MRFF each year.

Item 4

123.           Item 4 would repeal the definition of “maximum annual distribution” in the MRFF Act. This definition would not be required under the changes in the Bill.

Item 5 -

124.           This item would update the simplified outline of Part 2 of the MRFF Act to clarify that grants channelled through the MRFF Health Special Account can be paid to certain persons as well as certain bodies. This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” under the Acts Interpretation Act.

Item 6

125.           Item 6 would remove a reference to the current requirement in the MRFF Act for the Future Fund Board, in determining the maximum annual distribution for a financial year, to take into account the principle of preserving the nominal value of credits to the MRFF over the long term. This reference would become redundant as the Bill would remove the requirement for the Future Fund Board to determine the maximum annual distribution.

126.           The MRFF has been credited with $20 billon to date and the Government does not have any further credits to the MRFF scheduled. Following commencement, there would be no requirement to preserve the nominal value of credits ($20 billion) to the MRFF. The MRFF has a value of $21.4 billion as of 31 March 2021, having exceeded its benchmark rate of return since inception. With the MRFF now fully capitalised, the Government intends to issue a new investment mandate for the MRFF with a higher benchmark rate of return. While this would increase the risk of losses in the short term, it would also increase expected earnings and support the perpetual funding objective over the long term.

Item 7

127.           Item 7 would amend paragraph 15A(2)(b) to provide that the Health Minister has the power to seek expert advice on the merits of making multiple grants, to clarify that separate expert advice need not be sought on the merits of each individual grant.

Item 8

128.           Item 8 would insert a new subsection (subsection 15A(2A)) into the MRFF Act. The new subsection would clarify that a requirement made by the Health Minister under subsection 15A(1), for the Finance Minister to debit a specified amount from the MRFF Special Account for the purpose of paying grants, may relate to one or more grants and need not specify the grant or grants to which it relates.

Item 9

129.           Now that the MRFF is fully capitalised, item 9 would insert new section 15B into the MRFF Act, to establish a new methodology for the maximum amount that can be disbursed from the MRFF Special Account in each financial year from 2022-23 onwards.

130.           New subsection 15B(1) would provide for the maximum amount that can be debited from the MRFF Special Account for the purposes of making grants payments. The maximum amount for 2022-23 and later financial years would be $650 million, or if another amount is specified under subsection 15B(2) or15B(3), that other amount.

131.           New subsection 15B(2) would allow the responsible Ministers to determine, by way of legislative instrument, a maximum amount that can be debited from the MRFF Special Account in a specified financial year (from 2022-23 onwards) and all subsequent financial years. This would allow the responsible Ministers to update the maximum amount that can be debited to some other amount for all future financial years (or until otherwise specified).

132.           New subsection 15B(3) would allow the responsible Ministers to determine the maximum amount (or amounts) that could be debited from the MRFF Special Account in one or more specified financial years from 2022-23 onwards. This would allow the responsible Ministers to update the maximum amount that can be debited in the specified financial year (or financial years) to some other amount(s) - for example, by determining a schedule of maximum amounts applicable to specified financial years in the future.

133.           For certainty, any legislative instrument determined by the responsible Ministers under new subsections 15B(2) or 15B(3) would be subject to disallowance by the Parliament.

134.           New subsection 15B(4) would operate to ensure that any determination by the responsible Ministers under new subsection 15B(3) would prevail over any determination made under new subsection 15B(2). This would ensure that the Ministers can specify one or more amounts in specified financial years (under new subsection 15B(3)), even if a determination has already been made for all future financial years (under new subsection 15B(2)).

135.           New subsection 15B(5) would require the responsible Ministers to conduct a review of new paragraphs 15B(1)(c) and (d) at least every 5 years. In conducting a review under this new subsection, it is envisaged that the responsible Ministers would consider whether the maximum debit amount (or amounts) should be changed, having regard to the object of the MRFF Act as well as the perpetual funding objective of the MRFF.

Item 10

136.           Item 10 would repeal section 16 of the MRFF Act, which currently sets the limit on annual debits from the MRFF Special Account. This section is no longer required, as new section 15B would set the limit on annual debits following commencement.

Item 11

137.           Item 11 would add the term “persons” to paragraph 17(b) of the MRFF Act. This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” under the Acts Interpretation Act.

Item 12

138.           Item 12 would repeal subsection 20(5) and replace it with two new subsections to provide for new arrangements with respect to providing copies of directions under subsection 20(1) to debit a specified amount from the MRFF Special Account and credit that amount to the COAG Reform Fund.

139.           New subsection 20(5) would require the Finance Minister to give a copy of a direction under subsection 20(1) to the Treasurer and the Health Minister in instances where the Finance Minister personally gives a direction under that subsection.

140.           New subsection 20(6) would apply when the Finance Minister has delegated the power to give a direction under subsection 20(1). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 20(1), new subsection 20(6) would require the delegate to give a copy of that direction to the Treasury and the Health Department. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 20(1) has been delegated to an official in the Finance Department.

141.           Delegations under subsection 20(1) are limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

142.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 13

143.           Item 13 would add new section 22A to the MRFF Act, which would provide that a grant referred to in subsection 20(2) (to make grant to a State or Territory via the COAG Reform Fund) may be made in instalments.

Item 14

144.           Item 14 would create new subsection 24(1) in the MRFF Act, to accommodate the insertion of an additional subsection in section 24 (see item 18 below).

Item 15

145.           Item 15 would add the term “persons” to section 24 of the MRFF Act. This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” under the Acts Interpretation Act.

Item 16

146.           Item 16 would add States and Territories, and State and Territory authorities to the types of persons or bodies that can receive grants from the MRFF Health Special Account under section 24 of the MRFF Act.

147.           This would allow the MRFF Health Special Account to be debited for the purposes of paying grants to any State or Territory, including any body that shares legal personality with a State or Territory. This would allow for grants to be paid to bodies established by States or Territories, including those established through State or Territory law.

Item 17

148.           Item 17 would replace the reference to “A body that receives” with “The recipient of”. This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” (rather than “bodies”) under the Acts Interpretation Act.

Item 18

149.           Item 18 would add a new subsection (subsection 24(2)) to the MRFF Act, to provide that for the purposes of the section, corporation means a body corporate or a corporation sole.

150.           This would allow the MRFF Health Special Account to be debited for the purposes of paying grants to any incorporated body or corporation sole, irrespective of whether the body or person is incorporated or established by or under the Corporations Act 2001 or some other Commonwealth, State or Territory or foreign law. In particular it would allow for grants to be paid to statutory bodies incorporated under State or Territory laws.

Item 19

151.           Item 19 would repeal subsection 25(5) and replace it with two new subsections to provide for new arrangements with respect to providing copies of directions under subsection 25(1), to debit a specified amount from the MRFF Special Account and credit the MRFF Health Special Account.

152.           New subsection 25(5) would require the Finance Minister to give a copy of a direction under subsection 25(1) to the Treasurer and the Health Minister in instances where the Finance Minister personally gives a direction under that subsection.

153.           New subsection 25(6) would apply when the Finance Minister has delegated the power to give a direction under subsection 25(1). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 25(1), new subsection 25(6) would require the delegate to give a copy of that direction to the Treasury and the Health Department. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 25(1) has been delegated to an official in the Finance Department.

154.           Delegations under subsection 25(1) are limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

155.            The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act (see section 19 of the PGPA Act).

Item 20

156.           Item 20 would add the term “persons” to subsection 26(1). This item is consequential to the inclusion of States and Territories in section 24, which are classified as “persons” under the Acts Interpretation Act. 

Item 21

157.           Item 21 would remove the reference to "a person other than a State” from the heading of section 27. This change would be consequential to other changes made by the Bill that would allow States and Territories to be receive grants through the MRFF Health Special Account. The item would also change a reference to a “grant” to “grants”, for consistency with other sections of the MRFF Act.

Item 22

158.           Item 22 would insert “or body” to subsection 27(1) to provide for consistency in references to “persons or bodies” throughout relevant sections of the MRFF Act.

Item 23

159.           Item 23 would insert “or body” to subsection 27(2) to provide for consistency in references to “persons or bodies” throughout relevant sections of the MRFF Act.

Item 24

160.           Item 24 would add new section 28 to the MRFF Act, to provide that a grant referred to in subsection 26(1) (to a person or body listed in section 24) may be made in instalments.

Item 25

161.           Item 25 would repeal subsection 29(4) and replace it with two new subsections to provide for new arrangements with respect to providing copies of directions under subsection 29(1), to debit a specified amount from the MRFF Special Account to make a grant to a corporate Commonwealth entity.

162.           New subsection 29(4) would require the Finance Minister to give a copy of a direction under subsection 29(1) to the Treasurer and the Health Minister in instances where the Finance Minister personally gives a direction under that subsection.

163.           New subsection 29(5) would apply when the Finance Minister has delegated the power to give a direction under subsection 29(1). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 29(1), new subsection 29(5) would require the delegate to give a copy of that direction to the Treasury and the Health Department. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 29(1) has been delegated to an official in the Finance Department.

164.           Delegations under subsection 29(1) are limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

165.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 26

166.           Item 26 would add new section 30A to the MRFF Act, to provide that a grant referred to in subsection 29(1) (to a corporate Commonwealth entity) may be made in instalments.

Item 27

167.           Item 27 would update the simplified outline of Part 2A of the MRFF Act to replace a reference to 5 years with a reference to 6 years, for consistency with the amended duration of the Strategy made by item 29.

Item 28

168.           Item 28 would update the simplified outline of Part 2A of the MRFF Act to replace a reference to 2 years with a reference to 3 years, for consistency with the amended duration of the Priorities made by item 30.

Item 29

169.           Item 29 would update the language in subsection 32D(2) of the MRFF Act, to clarify that a Strategy (except for the first Strategy) must come into force as soon as the current Strategy ceases to be in force. This amendment would clarify that the point at which a Strategy comes into force is independent of when that Strategy is determined.

Item 30

170.           Item 30 would change the duration of each Strategy from 5 years to 6 years.

Item 31

171.           Item 31 would make a minor update to the language in subsection 32E(4) of the MRFF Act, to clarify that Priorities (except for the first Priorities) must come into force as soon as the current Priorities cease to be in force. This amendment would clarify that the point at which Priorities come into force is independent of when those Priorities are determined.

Item 32

172.           Item 32 would change the duration of each Priorities from 2 years to 3 years.

Item 33

173.           Item 33 would repeal Part 3 of the MRFF Act, which currently prescribes the methodology for the Future Fund Board to determine the maximum annual disbursement from the MRFF Special Account. This Part is no longer required, as the maximum annual disbursement would be determined under new section 15B.

Item 34

174.           Item 34 would update section 54 of the MRFF Act (the simplified outline of Part 5) to reflect the amended duration of the Priorities, which would no longer be determined every 2 years.

175.           Subsection 57A(1) of the MRFF Act requires the Health Minister to prepare a report on financial assistance provided from the MRFF Special Account after each Priorities cease. This requirement would not change, except for the fact that the duration of the Priorities, and hence the frequency of reporting under subsection 57A(1), has changed.

Part 2 - Application and Transitional

Item 35

176.           Item 35 would provide that the amendments made by items 12, 19 and 25 of Schedule 3 would apply in relation to a direction given after commencement of item 35.

177.           This would clarify that the new arrangements for providing copies of directions (as provided for by items 12, 19 and 25) would apply to any direction given after commencement of the item by the Finance Minister or the Finance Minister’s delegate under subsection 20(1), 25(1) or 29(1) of the MRFF Act. These directions relate to debiting the MRFF Special Account for the purposes of paying grants. 

Item 36

178.           Subitem 36(1) would provide that the amendment to subsection 32D(4), to change the duration of the Australian Medical Research and Innovation Strategy (Strategy) from 5 years to 6 years, would not apply to the current Strategy that is in place (the Australian Medical Research and Innovation Strategy 2016-2021 ). The duration of future Strategies would be determined by the new subsection 32D(4) and the transitional provisions contained in item 37 or item 38 (depending on the date of commencement).

179.           Subitem 36(2) would provide that the amendment to subsection 32E(5), to change the duration of the Australian Medical Research and Innovation Priorities (Priorities) from 2 years to 3 years, would not apply to the current Priorities that are in place (the Australian Medical Research and Innovation Priorities 2020-2022 ). The duration of future Priorities would be determined by the new subsection 32E(5) and the transitional provisions contained in item 37 or item 38 (depending on the date of commencement).

Item 37

180.           Item 37 would provide the transitional provisions for the Strategy and the Priorities that would apply if Schedule 3 commences before the end of 8 November 2021.

181.           Subitem 1 would specify that item 37 applies if Schedule 3 of the Bill commences before the end of 8 November 2021.

182.           Subitem 2 would specify that it is immaterial whether the Australian Medical Research Advisory Board consulted on a 5 year Strategy or a 6 year Strategy in determining whether it complied with its legislated consultation requirements under section 32EA of the MRFF Act and section 17 of the Legislation Act. This item would ensure that the Australian Medical Research Advisory Board does not need to conduct a separate consultation process following commencement of the legislation simply because the duration of the Strategy has changed from 5 years to 6 years.

183.           Subitem 3 would provide that the current Priorities, the Australian Medical Research and Innovation Priorities 2020-2022 , would cease to be in force at the end of 8 November 2021.

184.           Subitem 4 would specify that the Priorities that next follow the Australian Medical Research and Innovation Priorities 2020-2022 (the new priorities ) would cease to be in force at the end of 8 November 2024. The subitem would also specify that, in determining whether the Australian Medical Research Advisory Board complied with its legislated consultation requirements under section 32EA of the MRFF Act and section 17 of the Legislation Act, it is immaterial whether the Board consulted on 2 year Priorities or 3 year Priorities, and it is also immaterial whether that consultation (or part thereof) occurred before or after the commencement of item 37.

185.           This would ensure that the Australian Medical Research Advisory Board does not need to conduct a separate consultation process following commencement of the legislation simply because the duration of the Priorities has changed from 2 years to 3 years.  

186.           Under the changes, the new Priorities would be required to come into force at the same time as the new Strategy is issued. This would be required under subsection 32E(4) of the MRFF Act, which provides that new Priorities must come into force as soon as the current Priorities cease to be in force (at the end of 8 November 2021, as per subitem 37(4)). The ordinary principles relating to the commencement of legislative instruments, as per subsection 12(1) of the Legislation Act, would continue to apply to the Priorities.

187.           Going forward, every second Priorities would be updated at the same time as the Strategy is updated. This would allow the Australian Medical Research Advisory Board to conduct concurrent consultation processes for future Strategies and future Priorities, which would result in operational efficiencies and a reduced consultation burden on stakeholders.

188.           Subitem 5 would clarify that subitem 3 and paragraph 4(a) would have effect despite anything in subsection 32E(5) of the MRFF Act, which sets the duration of the Priorities. This would ensure that the transitional provisions contained in this item are effective in aligning the timing of updates to future Priorities and Strategies.

Item 38

189.           Item 38 would provide the transitional provisions for the Strategy and the Priorities that would apply if Schedule 3 commences after the end of 8 November 2021.

190.           Subitem 1 would specify that item 38 applies if Schedule 3 of the Bill commences after the end of 8 November 2021.

191.           Subitem 2 would specify that the Strategy in place immediately before the commencement of item 38 would cease to be in force at the end of 8 November 2027. This would effectively extend the duration of the Strategy in force immediately before commencement, in order to allow future updated of the Strategy to be aligned with every second update of the Priorities.

192.           Subitem 3 would clarify that subitem 2 would have effect despite anything in subsection 32D(4) of the MRFF Act, which sets the duration of the Strategy, or any determination made under section 32D of the MRFF Act. This would ensure that the transitional provisions contained in this item are effective in aligning the timing of updates to future Strategies and Priorities.

193.           Subitem 4 would provide that the Australian Medical Research and Innovation Priorities 2020-2022 would cease to be in force immediately before the commencement of the subsequent Priorities.

194.           Subitem 5 would specify certain terms applicable to the Priorities that next follow the Australian Medical Research and Innovation Priorities 2020-2022 (the new Priorities), in the event that Schedule 3 commences after the end of 8 November 2021. More specifically, the subitem would provide that:

·          the new Priorities would cease to be in force at the end of 8 November 2024, to align the timing of every second future update of the Priorities with an update of the Strategy;

·          the Australian Medical Research Advisory Board must take all reasonable steps to issue the new Priorities as soon as practicable after commencement, to ensure that there are no unnecessary delays to the issuance of the new Priorities; and

·          that, in determining whether the Australian Medical Research Advisory Board complied with its legislated consultation requirements under section 32EA of the MRFF Act and section 17 of the Legislation Act, the duration of the Priorities on which the Australian Medical Research Advisory Board consulted on (whether that duration is 2 years or any other period) is immaterial and it is also immaterial whether that consultation (or part thereof) occurred before or after commencement. This would allow the Australian Medical Research Advisory Board to satisfy its legislated requirement to consult on the new Priorities despite the duration of those Priorities being unknown until commencement of the legislation, which is reliant on passage through the Parliament.

195.           The ordinary principles relating to the commencement of legislative instruments, as per subsection 12(1) of the Legislation Act, would continue to apply to the Strategy.

196.           Subitem 6 would state that subitem 4 and paragraphs 5(a) and 5(b) would have effect despite anything in subsection 32E(5) of the MRFF Act, which sets the duration of the Priorities, or a determination made under section 32E of the MRFF Act. This would ensure that the transitional provisions contained in this item are effective in aligning the timing of updates to future Priorities and Strategies.

Item 39

197.           Subitem 1 would be a transitional provision to clarify that the MRFF Act would continue to apply in relation to debits in financial years up to and including 2021-22. This would ensure that the changes to debiting arrangements from 2022-23 onwards do not affect the debiting arrangement of the MRFF in earlier financial years.

198.           Subitem 2 would provide that the change to subsection 15(4) of the MRFF Act would apply to financial years up to and including 2021-22. This would ensure that the changes from 2022-23 onwards do not affect the operation of the MRFF in earlier financial years.

Schedule 4 - Emergency Response Fund 

Part 1 - Amendments

Emergency Response Fund Act 2019

Item 1

199.           Item 1 would update the simplified outline of the Act in section 3, to reflect the renaming of the Special Account used to pay amounts under grants and arrangements to recipients other than a State or Territory (states and territories receive funds via the COAG Reform Fund).

200.           The Special Account would be renamed from the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”. This change is consequential to the transfer of the administrative responsibly for expenditure from the ERF to the NRRA from 1 July 2021.

Item 2

201.           Item 2 would update a reference in section 3 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 3

202.           Item 3 would update a reference in section 3 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 4

203.           Item 4 would insert a definition into the ERF Act for the “Emergency Response Fund Payments Special Account”. This new definition is consequential to the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 5

204.           Item 5 would repeal the definition of the “Home Affairs Department” from the ERF Act. This definition would no longer be necessary following the transfer of the administrative responsibly for expenditure from the ERF from the Home Affairs Department to the NRRA (within the Department of the Prime Minister and Cabinet) from 1 July 2021.

Item 6

205.           Item 6 would repeal the definition of the “Home Affairs Emergency Response Fund Special Account” from the ERF Act, to reflect the transfer of the administrative responsibly for expenditure from the ERF to the NRRA from 1 July 2021.

Item 7

206.           Item 5 would repeal the definition of the “Home Affairs Minister” from the ERF Act. This definition, which is currently used to define the Home Affairs Department in the ERF Act, would no longer be necessary following the transfer of the administrative responsibly for expenditure from the ERF from the Home Affairs Department to the NRRA within the Department of the Prime Minister and Cabinet from 1 July 2021.

Item 8

207.           Item 8 would insert a definition for the “NRRA”, which is the body known as the National Recovery and Resilience Agency that was established as an Executive Agency under section 65 of the Public Service Act.

208.           This item is consequential to the transfer of the administrative responsibly for expenditure from the ERF from the Home Affairs Department to the NRRA from 1 July 2021.

Item 9

209.           Item 9 would update a reference in section 8 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 10

210.           Item 10 would update a reference in paragraph 14(a) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 11

211.           Item 11 would update a reference in section 19 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 12

212.           Item 12 would update a reference in section 19 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 13

213.           Item 13 would update a reference in section 19 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 14

214.           Item 13 would update a reference in subsection 26(1) from the Home Affairs Department to the NRRA, to reflect the transfer of the administrative responsibly for expenditure from the ERF from the Home Affairs Department to the NRRA from 1 July 2021.

Item 15

215.           Item 15 would update a reference in the heading of Division 3 of Part 3 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 16

216.           Item 16 would repeal section 27 of the ERF Act, which establishes the Home Affairs Emergency Response Fund Special Account, and replace it with new section 27 for the renamed special account, the Emergency Response Fund Payments Special Account.

217.           New subsection 27(1) would effectively rename the existing special account (from the Home Affairs Emergency Response Fund Special Account to the Emergency Response Fund Payments Special Account) and provide for the special account to continue operating with its new name.

218.           New subsection 27(2) would clarify that the Emergency Response Fund Payments Special Account is a special account for the purposes of the PGPA Act.

219.           The Note immediately following new subsection 27(2) would replicate the Note that currently exists in subsection 27(2) of the ERF Act. The Note assists the reader by clarifying that amounts could be credited to the special account by an Appropriation Act. A special account is an appropriation mechanism that sets aside an amount within the Consolidated Revenue Fund to be expended for specific purposes. Any amounts credited to the Emergency Response Fund Payments Special Account would be quarantined from the rest of the Consolidated Revenue Fund and could only be debited for the purposes set out in the ERF Act.

220.           New subsection 27(3) would provide that the accountable authority for the Emergency Response Fund Payments Special Account is the accountable authority of the NRRA. The Coordinator General of the NRRA is currently the accountable authority, as per section 15A of Schedule 1 to the Public Governance, Performance and Accountability Rule 2014.

Item 17

221.           Item 17 would update a reference in the heading of section 28 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 18

222.           Item 18 would update references in subsections 28(1) and (4) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 19

223.           Item 19 would update references in paragraphs 28(7)(a) and (d) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 20

224.           Item 20 would repeal subsection 28(9) and substitute it with two new subsections to specify the requirements for providing copies of directions under subsection 28(7), to transfer an amount from the ERF Special Account to the Emergency Response Fund Payments Special Account for the purposes of paying grants to fund emergency response and recovery following natural disasters in Australia that have a significant or catastrophic impact.

225.           The new subsection 28(9) would require the Finance Minister to give a copy of a direction under subsection 28(7) to the Treasurer and the Emergency Management Minister in instances where the Finance Minister personally gives a direction under that subsection.

226.           New subsection 28(10) would apply when the Finance Minister has delegated the power to give a direction under subsection 28(7). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 28(7), new subsection 28(10) would require the delegate to give a copy of that direction to the Treasury Department and the NRRA. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 28(7) has been delegated to an official in the Finance Department.

227.           Delegations under subsection 28(7) are limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

228.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 21

229.           Item 21 would update the heading of section 28A to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 22

230.           Item 22 would update references in subsections 28A(1) and (4) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 23

231.           Item 23 would update references in paragraphs 28A(7)(a) and (d) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 24

232.           Item 24 would repeal subsection 28A(9) and substitute it with two new subsections to specify the requirements for providing copies of directions under subsection 28A(7), to transfer an amount from the ERF Special Account to the Emergency Response Fund Payments Special Account for the purposes of paying grants to build resilience to, prepare for or reduce the risk of future natural disasters, and build the long-term sustainability of communities that are at risk of being affected by a future natural disaster.

233.           The new subsection 28A(9) would require the Finance Minister to give a copy of a direction under subsection 28A(7) to the Treasurer and the Emergency Management Minister in instances where the Finance Minister personally gives a direction under that subsection.

234.           New subsection 28A(10) would apply when the Finance Minister has delegated the power to give a direction under subsection 28A(7). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 28A(7), new subsection 28A(10) would require the delegate to give a copy of that direction to the Treasury Department and the NRRA. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 28A(7) has been delegated to an official in the Finance Department.

235.           Delegations under subsection 28A(7) are limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

236.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 25

237.           Item 25 would update the heading of section 29 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 26

238.           Item 26 would update a reference in section 29 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 27

239.           Item 27 would update the heading of section 30 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 28

240.           Item 28 would update a reference in section 30 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 29

241.           Item 29 would update the heading of section 31 to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 30

242.           Item 30 would update a reference in paragraph 31(1)(a) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 31

243.           Item 31 would update a reference in subparagraph 31(2)(a)(i) to reflect the renaming of the “Home Affairs Emergency Response Fund Special Account” to the “Emergency Response Fund Payments Special Account”.

Item 32

244.           Item 32 would repeal subsection 31(4) and substitute it with two new subsections to specify the requirements for providing copies of directions under subsection 31(2), to debit excess amounts from the Emergency Response Fund Payments Special Account and credit it to the ERF Special Account. A direction under subsection 31(2) occurs when the Emergency Management Minister (or delegate) makes an assessment that the balance of the Emergency Response Fund Payments Special Account exceeds what is sufficient to cover payments related to arrangements and grants in the upcoming 12-month period.

245.           The new subsection 31(4) would require the Emergency Management Minister to give a copy of a direction under subsection 31(2) to the Treasurer and the Finance Minister in instances where the Emergency Management Minister personally gives a direction under that subsection.

246.           New subsection 31(5) would apply when the Emergency Management Minister has delegated the power to give a direction under subsection 31(2). When this delegation has occurred, and the Emergency Management Minister’s delegate gives a direction under subsection 31(2), new subsection 31(5) would require the delegate to give a copy of that direction to the Treasury Department and the Finance Department. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 31(2) has been delegated to an official in the NRRA.

247.           Delegations under subsection 31(2) would be limited to the accountable authority of the NRRA and SES employees, or acting SES employees, in the NRRA. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

248.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 33 -

249.           Item 33 would repeal subsection 32(1) and substitute it for two new subsections to provide for the channelling of grants of financial assistance to a State or Territory, through the COAG Reform Fund, to fund emergency response and recovery following natural disasters in Australia that have a significant or catastrophic impact.

250.           Subsection 32(1) of the ERF Act currently provides for the Emergency Management Minister to make directions to debit the ERF Special Account, which is administered by the Finance Department, for the purposes of channelling grants of financial assistance to a State or Territory through the COAG Reform Fund. The process of a Minister directing a department outside of that Minister’s portfolio is unusual, and is inconsistent with comparable provisions in the legislation governing of other Australian Government investment funds (for example, see section 15A of the MRFF Act, as well as subsections 28(1) and 28A(1) of the ERF Act).

251.           The amendments in item 33 would align the process for channelling grants through the COAG Reform Fund with other comparable provisions. New subsection 32(1A) would provide that the Emergency Management Minister may request that the Finance Minister transfer amounts from the ERF Special Account for the purposes of channelling grants of financial assistance to a State or Territory through the COAG Reform Fund. Under the new subsection 32(1), the Finance Minister would be required to make a direction that the specified amount is to be debited from the ERF Special Account and credited to the COAG Reform Fund on a specified day.

252.           This would ensure that the Finance Minister is responsible for debiting the ERF Special Account, which is administered by the Finance Department.

Item 34

253.           Item 34 would make a consequential amendment to subsection 32(3) to reflect the amended role of the Emergency Management Minister in facilitating transfers from the ERF Special Account to the COAG Reform Fund (see item 33).

254.           The amendment would remove a reference to the Emergency Management Minister giving a direction and replace it with a reference to the Emergency Management Minister making a request. The effect of the subsection would remain that the annual limits on debits from the ERF Special Account, as per section 34 of the ERF Act, cannot be exceeded.

Item 35

255.           Item 35 would repeal subsection 32(6) and substitute it with two new subsections to specify the requirements for providing copies of directions under subsection 32(1), to transfer an amount from the ERF Special Account to the COAG Reform Fund for the purposes of paying grants to a State or Territory to fund emergency response and recovery following natural disasters in Australia that have a significant or catastrophic impact.

256.           The new subsection 32(6) would require the Finance Minister to give a copy of a direction under subsection 32(1) to the Treasurer and the Emergency Management Minister in instances where the Finance Minister personally gives a direction under that subsection.

257.           New subsection 32(7) would apply when the Finance Minister has delegated the power to give a direction under subsection 32(1), to transfer an amount from the ERF Special Account to the COAG Reform Fund. When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 32(1), new subsection 32(7) would require the delegate to give a copy of that direction to the Treasury Department and the NRRA. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 32(1) has been delegated to an official in the Finance Department.

258.           Delegations under subsection 32(1) would be limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

259.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 36

260.           Item 36 would repeal subsection 32A(1) and substitute it for two new subsections to provide for the channelling of grants of financial assistance to a State or Territory, through the COAG Reform Fund, to build resilience to, prepare for or reduce the risk of future natural disasters, and build the long-term sustainability of communities that are at risk of being affected by a future natural disaster.

261.           Subsection 32A(1) of the ERF Act currently provides for the Emergency Management Minister to make directions to debit the ERF Special Account, which is administered by the Finance Department, for the purposes of channelling grants of financial assistance to a State or Territory through the COAG Reform Fund. The process of a Minister directing a department outside of that Minister’s portfolio is unusual, and is inconsistent with comparable provisions in the legislation governing other Australian Government investment funds (for example, see section 15A of the MRFF Act, as well as sections 28(1) and 28A(1) of the ERF Act).

262.           The amendments in item 36 would align the process for channelling grants through the COAG Reform Fund with other comparable provisions. New subsection 32A(1A) would provide that the Emergency Management Minister may request that the Finance Minister transfer amounts from the ERF Special Account for the purposes of channelling grants of financial assistance to a State or Territory through the COAG Reform Fund. Under the new subsection 32A(1), the Finance Minister would be required to make a direction that the specified amount is to be debited from the ERF Special Account and credited to the COAG Reform Fund on a specified day.

263.           This would ensure that the Finance Minister is responsible for debiting the ERF Special Account, which is administered by the Finance Department.

Item 37

264.           Item 37 would make a consequential amendment to subsection 32A(3) to reflect the amended role of the Emergency Management Minister in facilitating transfers from the ERF Special Account to the COAG Reform Fund (see item 36).

265.           The amendment would remove a reference to the Emergency Management Minister giving a direction and replace it with a reference to the Emergency Management Minister making a request. The effect of the subsection would remain that the annual limits on debits from the ERF Special Account, as per section 34 of the ERF Act, cannot be exceeded.

Item 38

266.           Item 38 would repeal subsection 32A(6) and substitute it with two new subsections to specify the requirements for providing copies of directions under subsection 32A(1), to transfer an amount from the ERF Special Account to the COAG Reform Fund for the purposes of paying grants to a State or Territory to build resilience to, prepare for or reduce the risk of future natural disasters, and build the long-term sustainability of communities that are at risk of being affected by a future natural disaster.

267.           The new subsection 32A(6) would require the Finance Minister to give a copy of a direction under subsection 32A(1) to the Treasurer and the Emergency Management Minister in instances where the Finance Minister personally gives a direction under that subsection.

268.           New subsection 32A(7) would apply when the Finance Minister has delegated the power to give a direction under subsection 32(1). When this delegation has occurred, and the Finance Minister’s delegate gives a direction under subsection 32A(1), new subsection 32A(7) would require the delegate to give a copy of that direction to the Treasury Department and the NRRA. This would allow correspondence to occur between officials at a departmental level when the power to give a direction under subsection 32A(1) has been delegated to an official in the Finance Department.

269.           Delegations under subsection 32A(1) would be limited to the Secretary and SES employees, or acting SES employees, in the Finance Department. This ensures that any delegate has a suitable level of experience and skills to perform the delegated power.

270.           The purpose of this item is to reduce administrative burden, given that correspondence usually occurs at a departmental level as a result of delegations. Departments would still be required to keep their Ministers appropriately informed under provisions in the PGPA Act.

Item 39

271.           Item 39 would update the Finance Minister’s delegation powers to reflect the Finance Minister’s new roles with respect to sections 32 and 32A, as amended by this Bill.

272.           Under the amended sections, the Finance Minister would be required to transfer amounts from the ERF Special Account to the COAG Reform Fund for the purpose of paying grants to a State or Territory. Item 39 would allow the Finance Minister to delegate these powers to the Secretary or an SES employee (or acting SES employee) in the Finance Department. This would be consistent with the delegation arrangements for other similar functions under the ERF Act (for example, sections 28 and 28A).

Item 40

273.           Item 40 would update the delegation powers of the Emergency Management Minister to allow the delegation of powers under Division 2 of Part 3 (relating to the Emergency Response Fund Payments Special Account) to the accountable authority of the NRRA, instead of the Secretary of the Home Affairs Department.

274.           The Coordinator General of the NRRA is currently the accountable authority, as per section 15A of Schedule 1 to the Public Governance, Performance and Accountability Rule 2014. The Coordinator General, as the head of the NRRA, is highly suitable to carry out any delegated powers, as the senior official responsible for coordinating Australia’s recovery from crises and overseeing national resilience, preparedness and risk reduction.

275.           This item is consequential to the transfer of administrative responsibly for expenditure from the ERF to the NRRA, from the Home Affairs Department.

Item 41

276.           Item 41 would update the delegation powers of the Emergency Management Minister to allow the delegation of powers under Division 2 of Part 3 (relating to the Emergency Response Fund Payments Special Account) to an SES employee (or acting SES employee) in the NRRA, instead of an SES employee (or acting SES employee) in the Home Affairs Department.

277.           This item is consequential to the transfer of administrative responsibly for expenditure from the ERF to the NRRA, from the Home Affairs Department.

Item 42

278.           Item 42 would update the delegation powers of the Emergency Management Minister to allow the delegation of functions or powers under section 28, 28A, 31, 32 or 32A (in relation to transfers between special accounts and assessing the balance of the Emergency Response Fund Payments Special Account) to the accountable authority of the NRRA, instead of the Secretary of the Home Affairs Department.

279.           The Coordinator General of the NRRA is currently the accountable authority, as per section 15A of Schedule 1 to the Public Governance, Performance and Accountability Rule 2014. The Coordinator General, as the head of the NRRA, is highly suitable to carry out any delegated powers, as the senior official responsible for coordinating Australia’s recovery from crises and overseeing national resilience, preparedness and risk reduction.

280.           This item is consequential to the transfer of administrative responsibly for expenditure from the ERF to the NRRA, from the Home Affairs Department.

Item 43

281.           Item 43 would update the delegation powers of the Emergency Management Minister to allow the delegation of functions or powers under section 28, 28A, 31, 32 or 32A (in relation to transfers between special accounts and assessing the balance of the Emergency Response Fund Payments Special Account) to an SES employee (or acting SES employee) in the NRRA, instead of an SES employee (or acting SES employee) in the Home Affairs Department.

282.           This item is consequential to the transfer of administrative responsibly for expenditure from the ERF to the NRRA, from the Home Affairs Department.

 

Part 2 — Application

Item 44

283.           Item 44 would provide that the amendments made by items 20, 24, 32, 35 and 38 of Schedule 4 would apply in relation to a direction given after commencement of item 44.

284.           This would clarify that the new arrangements for providing copies of directions (as provided for by items 20, 24, 32, 35 and 38) would apply to any direction given after commencement of the item by the Finance Minister or the Finance Minister’s delegate under subsection 28(7), 28A(7), 32(1) or 32A(1), or the Emergency Management Minister or the Emergency Management Minister’s delegate under subsection 31(2), of the ERF Act. These directions relate to debiting the ERF Special Account for the purposes of paying grants and debiting the Emergency Response Fund Payments Special Account to return excess amounts to the ERF Special Account.