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Tuesday, 15 March 2005
Page: 11

Senator LUDWIG (1:16 PM) —I rise to speak on theAdministrative Appeals Tribunal Amendment Bill 2004 [2005]. I must say at the outset that the government has been forced to make some substantial changes to this bill, particularly in regard to the president, in the face of overwhelming opposition, but I will come to those changes later and in more detail during the committee stage. This amendment bill is primarily aimed at improving the AAT’s ability to manage its workload and ensure that it operates more efficiently. There are a number of reforms which will provide for a more efficient AAT. It is important that the AAT operates as efficiently and as quickly as justice will allow because we know that delays in the AAT can cause the parties not just much angst but often severe disadvantage. Anything this parliament can do to help this process is important, but in designing a tribunal of this type the balance between efficiency and justice requires very close consideration.

As has been noted during the long process of reforming the AAT, this tribunal is not a chapter 3 court; it is a tribunal within the executive and charged with conducting merit reviews of government decisions. Because of the very fact that the work of the AAT is the primary place of external review for citizens in dispute with the government, when it was originally designed the AAT was heavily weighted with judicial principle and practice. The requirement that the AAT president should be a Federal Court judge and the significant number of judges appointed to the tribunal with tenure demonstrated an early commitment that the tribunal should be seen not just to be a creature of the bureaucracy but an avenue of completely independent review. Great care went into ensuring that the tribunal was seen to be a body completely independent from the executive so that no bias could be attributed to its decisions and they would be respected by parties involved. The history of the Administrative Appeals Tribunal shows that parties, importantly including government, have respected its decisions and its standing. At the same time the tribunal was designed to be a relatively informal process so that it would remain accessible to anyone, regardless of their resources, who needed to appeal a decision to it.

The question we face in consideration of this bill is whether that important and delicate balance has in fact been maintained and to what extent it can be shaved away in terms of the tribunal’s judicial vestige and yet have the essential characteristics to maintain its actual and perceived independence. Labor had serious concerns about the original form of the bill, particularly with regard to the role and standing of the AAT president, and about the terms of appointment and tenure of the senior and presidential members, as they go directly to the question of independence from government. We are naturally happy that the government has taken up a number of Labor’s concerns, but I will come to those aspects later.

The amendments make a number of cosmetic changes to the act to update the language to plain English. This is particularly important for an act which creates a tribunal designed to be accessible to all. The bill also expands the alternative dispute resolution, or ADR, processes available to the tribunal and provides for the president to direct parties to these processes and that the parties are required to undergo ADR in good faith, though sanctions do not apply for failure to do so. As long as disputes are referred to ADR conscientiously and the process is carried out responsibly, there are benefits that can be obtained by resolving disputes in this way. Naturally the resolution of the dispute by the parties themselves is in fact preferable, but care must be taken to ensure that a difference in resources and power of the parties is not exacerbated by the referral to ADR. This is a concern that has been expressed by some organisations, including the National Welfare Rights Network, who argued in their submission to the Senate inquiry that the legislation should be amended to prescribe the factors that the AAT president should take into consideration when considering referring a matter to ADR, such as the power relationship between the parties, that it is optional and voluntary or that there are no factors that make it inappropriate. Whilst this is a concern, Labor is satisfied that good management by an independent and tenured president will ensure that it operates fairly.

Under these amendments the president will have responsibility for referring questions of law to the Federal Court and the Federal Court will be empowered to make findings of fact so that it can completely dispose of a matter without it returning to the tribunal for finalisation. This is a commonsense amendment which Labor supports. But again we note that it relies on the status and authority of the president. It is also beneficial in order to secure a working nexus between the AAT and the Federal Court that the AAT president is a judge of that court.

The powers of the AAT president will be increased by this bill. The existing sections 20 and 23 of the AAT act will be overhauled to remove restrictive provisions and to give the president broad powers to constitute the tribunal in relation to particular matters. The president will also have the power to authorise ordinary members to exercise powers that can currently be exercised only by presidential or senior members. These changes by themselves are reasonable and are designed to give the additional tribunal flexibility, but we can have confidence to bestow increased powers on the president only if the position itself maintains the existing level of independence and status.

Of the 17 submissions made to the Senate inquiry into this bill, not a single one was in favour of this particular reform, while a number of the submissions expressed strong opposition to it. The balance that this parliament has always tried to achieve in this structure of the AAT is to provide an informal avenue of review for citizens aggrieved by government decisions while maintaining the tribunal’s status so that its decisions are perceived as being fair and just. Of course, these two aims can be conflicting ones.

During the creation of the AAT there was a strong emphasis on creating a judicial-style structure. The early composition of the AAT was heavy with appointments of members of the judiciary in order to immediately bestow upon the tribunal both standing and the assurance of independence. We should not take the fragility of the AAT’s independent status lightly. Labor believes that the government’s attempts to completely strip the president of any of the protections which are automatically bestowed on our courts simply go one step too far. We have seen from the circulated government amendments that it seems the government has now completely caved in under overwhelming pressure, including from its own members on the legal and constitutional committee.

This does not, however, erase the fact that the government’s original intention was part of the Howard government’s overall attempts to gradually shut down all of the avenues of review, dissent and disagreement. Applicants must have faith that their case will be heard judiciously, and government decision makers should be aware that their decisions can in fact be scrutinised by a body that is known to be independent and not held or captured by the government or a department. The existence of a strong and independent president provides a positive assurance that this is the case. A president with tenure and with the authority and experience of a Federal Court judge gives the tribunal immediate status above that of a mere internal departmental review body. While we could accept the need for some flexibility in the appointment of ordinary members, we were never going to compromise the standing of the tribunal by relinquishing the status of the AAT president by removing tenure from the position and the need for the position to be filled by a chapter 3 court judge.

Therefore, we can say that we are pleased that the government has backed down in this regard. While the strongest concerns during the Senate inquiry into this bill were with the downgrading of the status of the president, there were also strong concerns about the removal of tenured appointments for presidential and senior AAT members. While the howls of protest against these changes were not as loud as the voices against the downgrading of the status of the president, there were significant concerns raised about this issue. Labor shares many of the concerns about the complete abolition of tenured positions in the tribunal. After all, the tenured positions are the best way of ensuring independence and securing good appointments.

The Senate committee report noted that it has become accepted practice that new appointments to the tribunal have been made on a fixed term basis for over 15 years and that this amendment is consistent with longstanding practice. But, similarly, it could be argued that this simply highlights an existing deficiency in the existing act. The arguments that apply to the importance of tenure in maintaining the status of the president can equally be applied to the importance of maintaining a number of tenured positions through the tribunal, although the symbolism is not as high and fearless standards can to some extent be set at the top by the president.

We understand the importance of flexibility in the appointment process, although Labor strongly believes that, at the very least, minimum terms must be maintained for appointments. The current proposal by the government, in our view, is seriously deficient. While the preservation of a number of tenured positions is preferable, the Senate committee recommended minimum term appointments of three years. Labor believes that five years would be preferable and we will be moving amendments to this effect in the committee stage. This will go some way to giving the AAT members the certainty they need and greater public confidence in their decision making.

This does not totally remove the possible perception that an AAT decision could be clouded by a member seeking reappointment, but Labor thinks it is a significant improvement. The government’s early proposals to reform administrative review in Australia failed because it is not willing to uphold the important safeguards existing in the AAT in its current form. In October 2003, when announcing the government’s intention to legislate current reforms, the Attorney-General signalled an ongoing commitment to the amalgamation of merit review tribunals into a single body. Labor rejected that bill, not on the basis of the amalgamation per se but because it did not make many of the changes and initiatives that would have improved the overall decision making capability of the tribunal. The bill undermined the importance of the AAT as a respected public institution, which it still is in our view. We think that the government got too arrogant and that it still maintains that arrogance when it comes to how it wants to reform institutions such as the AAT. When the government turns its mind to issues in social security, veterans’ affairs, tax, Comcare and so on, it seems to want to insulate itself from the ability to ensure that citizens have a fair appeals mechanism into those areas.

Turning to aspects of the Senate committee report in respect of this bill, Labor welcomes and strongly supports the unanimous recommendations. The committee made a number of sensible recommendations that would be a great improvement on the bill as it stands. Labor believes that the government bill went too far, as I think I have made plain, in undermining the status and standing of the AAT. We made no secret of our concerns about measures in the bill which would undermine the standing of the AAT president.

As I have said, we are glad that the government has come to take Labor’s view on this issue. The AAT president, particularly with the expanded powers proposed in the government’s current bill, needs to be in a position where there can be absolutely no question of political influence. This is essentially to maintain the status and integrity of the AAT. The ordinary applicant to the tribunal must be assured that their complaint about a government decision will be heard judiciously.

One of the AAT’s enduring strengths is that it has always been seen to be much more than an internal departmental review mechanism. Whilst it is not a court, and that is clearly recognised, it is seen to act totally independently. By removing the president’s tenure and status as a Federal Court judge, much of the AAT’s strength would have been undermined. The committee has unanimously recommended that this amendment be removed.

The committee made a number of other recommendations, all of which will make important improvements to the bill as it stands. The committee recommended that the act provide a minimum term for all new appointments to the AAT. This was an issue which was raised during hearings and indeed was a recommendation of the Administrative Review Council’s report, Better decisions, in 1995. The committee also recommended that the minimum term be three years. However, a number of submissions would have preferred a longer minimum period of between five and seven years. It was argued that a greater period would further insulate AAT members against any perception of bias or that decisions could be impugned because of a desire for reappointment. I understand that the government has rejected this recommendation. Labor stands behind that recommendation and will move amendments during the committee stage to give effect to that position.

The committee also recommended that further guidance be provided on the circumstances in which the president can remove an AAT member and reconstitute a tribunal in the interests of justice. We argued—for want of a better word—about what that term in fact meant. The Attorney-General’s Department informed the committee that this phrase was used to provide the president with balance so that they could then balance all the competing interests when making a decision. But it concluded that this phrase was too vague and that greater legislative direction should be given to the president when considering any factors that might warrant a member’s removal or the reconstitution of a tribunal. We do not believe, however, that the form of words in the government amendment is entirely adequate.

Finally, the committee recommended that the minister be required to consult with the AAT president before making assignments to divisions of the tribunal. This, combined with the recommendations that the AAT president remain a Federal Court judge, would add an extra layer of transparency and accountability. Again, we can say that we are pleased that the government has accepted the committee recommendation in this area.

We are left with a position where the government has significantly and substantially picked up the recommendations of the Senate Legal and Constitutional Legislation Committee. In this respect, you would normally expect the government to be congratulated on following the lead of the committee. However, it seems that the government in this instance acquiesced to the strong arguments that were put by the committee as to why these amendments should be made to ensure that the legislation allows the AAT the status and the ability to act independently and ensures that the public is confident in and recognises the transparency of its decision making. In that instance, I think the government failed to take the bill and move it through in a considered way.

What the government did do, I think, was try to push the envelope by tilting this too far—allowing the Senate Legal and Constitutional Legislation Committee, in some respects, as the gatekeeper, to try to bring back a bit of sense to the bill. The government should be on notice about the need to start at the beginning and work through bills with a proper intent, in my view, rather than rely on committees in that instance to try to add balance. Alternatively, you could take an adverse view and consider that the government was up to mischief and did want to downgrade the tribunal. I will leave it, I suspect, to the public to make that decision. We can certainly argue it, and argue it we will. The committee stage will give us an opportunity to propose additional amendments to the bill and to put our particular views.