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July 2012

CRU Associate, Amanda Sapienza, writes as follows about the Commonwealth's legislative response to the Williams case:

A court decides that government activity is invalid because it is inconsistent with representative government. The government’s response to the decision is carried out in a way that marginalises the operation of representative government. Ironic?

The Financial Framework Legislation Amendment Bill (No 3) 2012 (Cth) became law on 28 June 2012 with all of the media fanfare that legislation of that title deserves. The Bill sought to authorise spending by the Commonwealth government on more than 400 executive funding schemes by amending the Financial Management and Accountability Regulations 1997 ('the Regulations') to list all of the relevant schemes. The genesis of the Bill in the High Court’s decision in Williams v Commonwealth [2012] HCA 23 and the level of parliamentary scrutiny (or lack thereof) that the Bill received in the House of Representatives are discussed by Anne Twomey in an earlier post on this Blog here: http://blogs.usyd.edu.au/cru/2012/06/parliaments_abject_surrender_t_1.html. The concerns raised in the House of Representatives by the Opposition and Greens members were repeated in the Senate. In the end, however, it seems that a feeling prevailed that it was better to do something than nothing to save the chaplains program. The unamended Bill was given Royal Assent less than 48 hours after being introduced. It became the Financial Framework Legislation Amendment Act (No 3) 2012 (Cth) (‘the Amending Act’) and all the concerns voiced were consigned to the relevance of extrinsic material.

What the government appears to have overlooked is that the High Court’s requirement for legislative support for the chaplains program was driven in part by concerns about representative government and the lack of parliamentary oversight of Commonwealth spending on executive funding schemes. Leaving aside the substantive provisions of the Amending Act, even the government’s choice about how to effect the changes to the the Regulations suggests that giving full effect to representative government was not a priority.

Delegated legislation, of which the Regulations are an example, is commonplace in government regulation these days. Accusations of Executive usurpation of governance, at the expense of the Parliament, are frequently levelled at governments due to their increasing reliance on administration by regulation rather than legislation. The decision to locate the schemes in the Regulations rather than in an Act would have raised some eyebrows in this regard.

However, because of their ever-expanding role in administration, the making of regulations is itself strictly governed by legislation. The Legislative Instruments Act 2003 (Cth) sets out detailed requirements for the drafting, consultation, publication and parliamentary scrutiny of legislative instruments (which include the Regulations). The consultation and parliamentary scrutiny provisions apply whenever a new regulation is made, even where all the new regulation does is amend an older regulation. New regulations remain open to a disallowance motion for 15 sitting days after being tabled in each House of Parliament. A disallowance resolution can be passed by either House of Parliament within 15 sitting days of a disallowance motion being moved. However, these provisions do not seem to apply when a regulation is amended by an Act of Parliament rather than another legislative instrument. The rationale for this distinction appears clear: why subject an Act, which has already been passed by both Houses of Parliament, to further parliamentary scrutiny? If anyone had a problem with it, the problem would have been raised during the debates or committee stages. And in ordinary cases this would be a fair and complete answer to the lack of provision for disallowance.

What does all of this mean for the passage of the Amending Act and the consequential changes to the Regulations? Because the actual insertion of all of the schemes into the Regulations was achieved by an Act and not a legislative instrument, none of the schemes are open to disallowance by either House of Parliament. In the particular circumstances of the passing of the Amending Act the disallowance procedures might have been preferable from the perspective of representative government, as the following scenario demonstrates:

1. The Act would have been passed and the amending regulations duly made and registered on the Federal Register of Legislative Instruments (better known as comlaw.gov.au), thereby taking almost immediate effect to preserve all presently existing schemes.

2. Even if the amending regulations were not tabled in each House immediately, the passage of the Amending Act would have alerted the Opposition and cross-benchers to their existence and they could have obtained a copy from the register.

3. The Opposition and cross-benchers could have taken the winter Parliamentary recess to consider whether they supported each scheme in the Regulations.

4. A disallowance motion could be moved within 15 sitting days of the amending regulations being tabled in each House. On the present Parliamentary sitting calendar, that period might not expire until 20 September 2012 (later if the amending regulations were not tabled in each House until after the winter recess) and it is possible that a motion would not have to be voted on until February 2013.

5. By that stage the Opposition and cross-benchers might have agreed on at least some of the schemes that they wanted deleted from the Regulations and a disallowance motion could have had the numbers to pass the relevant House.


Disallowance only takes effect from the time of the disallowance. Everything done pursuant to the Regulations up until any disallowance remains valid. This would likely have satisfied the Greens, who were willing to pass the Bill to cover existing schemes but sought to have full parliamentary control over future spending. It also would likely have satisfied the Opposition, who foreshadowed that they did not agree with some of the schemes to be listed in the Regulations and wanted the Amending Act to sunset after 6 months.

While the process would have delayed the provision of certainty to administrators and recipients under the schemes, it would have at least ensured that the elected representatives had the proper time and resources to consider each and every scheme carefully. In this instance, it seems that changing a regulation by Executive-made regulations would have been truer to the concept of democracy and representative government than ordinary parliamentary processes.

As to why the government chose the Act route rather than the amending regulations route, one can only speculate. It certainly can’t have been because they did not want to trouble the Governor-General for another signature. The Governor-General made a new regulation amending the Regulations on 28 June 2012 (Financial Management and Accountability Amendment 2012 (No 3) (Cth)) but this had nothing to do with the enormous change that occurred to the Regulations on that very day courtesy of the Amending Act.

Going forward, it may be open to the government to amend the schemes either by Act or by amending regulation. In either case, the broad wording of the schemes in the Regulations means that the Opposition and cross-benchers are going to have to ask detailed questions of the government to ascertain precisely what the amendment entails. And that will only arise in the cases where the Regulations need to be changed. The Amending Act permits spending pursuant to schemes that either are listed in the Regulations, belong to a class of schemes listed in the Regulations or are for a purpose of a program listed in the Regulations. When the broad wording of this power is put together with the broad wording of the schemes, it seems that the Regulations will not need to be amended very often. This means that new executive funding schemes will not be subject to parliamentary scrutiny very often. And this, together with what has already occurred, means that the High Court’s concerns about representative government that led to the Amending Act in the first place have not been allayed by it whatsoever.

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