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1.7.1 Legislation Handbook

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The Legislation Handbook provides information about the procedures involved in preparing Commonwealth legislation, especially the procedures coordinated by the Department of the Prime Minister and Cabinet (PM&C). The handbook is intended as a guide for public servants on processes for the development and passage of new or amending legislation.

One of the priorities in the preparation of legislation is ensuring it is as clear as possible. Senior managers have a role in overseeing the legislation being prepared by their Agencies to ensure complexity is reduced as much as possible. This includes being prepared to consider policy options (and where necessary alternatives) where that would enable a simpler legislative approach. Senior managers also have a responsibility to ensure that appropriately senior and experienced staff are involved in the development of legislation.

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1.7.2 Working with the Office of Parliamentary Counsel (OPC) - A Guide for Clients

Working with OPC - A Guide for Clients provides guidance on developing drafting instructions and working on legislative projects in general.

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1.7.3 Best Practice Regulation, Regulation Management and Review

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Office of Best Practice Regulation Requirements

The OBPR administers the Government’s best practice regulation requirements and assists departments and agencies in meeting the requirements by advising on the level of impact analysis required and in assisting policy officers to prepare Regulation Impact Statements (RISs). The OBPR is also required to monitor and report publicly on compliance with the best practice regulation requirements.

The Government’s requirements are set out in the Best Practice Regulation Handbook. An updated version of the Handbook was released in June 2010. It provides guidance on the analysis and consultation which must be undertaken when developing regulatory proposals.

The Best Practice Regulation Handbook outlines regulatory best practice procedures and processes for making, reviewing or amending ‘regulation’. It has been endorsed by the Australian Government, and compliance with its requirements is mandatory for all Australian Government agencies making, reviewing or amending Australian Government regulation. Similar requirements, endorsed by COAG, apply to all regulations considered and made by ministerial councils and national standard setting bodies. COAG requirements are provided in the COAG-endorsed Council of Australian Government Best Practice Regulation: A Guide for Ministerial Councils and National Standard Setting Bodies.

The Best Practice Regulation Handbook defines regulation as:

Any ‘rule’ endorsed by government where there is an expectation of compliance. It includes primary legislation, and legislative instruments (both disallowable and non-disallowable) and international treaties. It also comprises other means by which governments influence businesses and the not-for-profit sector to comply but that do not form part of explicit government regulation (for example, industry codes of practice, guidance notes, industry-government agreements and accreditation schemes).

Grant programs, government procurement of specific goods or services or government agreements are not included unless these processes impose more general regulatory requirements on the organisations receiving funding or providing goods/services.

A RIS is mandatory for all decisions made by the Australian Government (including departments, agencies, statutory authorities and boards) that are likely to have a regulatory impact on business or the not-for-profit sector, unless that impact is of a minor or machinery nature and does not substantially alter existing arrangements. The OBPR is required to assess whether a proposal requires a RIS.

Under the Australian Government regulation-making framework, a regulatory proposal cannot proceed to Cabinet or other decision‑makers unless it has complied with the best practice regulation requirements. These requirements recognise that for some proposals, the Prime Minister may grant exceptional circumstances. Where exceptional circumstances have been granted, the regulation will be subject to a post‑implementation review within one to two years of implementation. Where a proposal proceeds (either through Cabinet or another decision‑maker) without an adequate RIS, the resulting regulation must also be subject to a post-implementation review within one to two years of implementation.

The OBPR reports publicly on compliance with the requirements in the Best Practice Regulation Report which is released around December each year, and on the Best Practice Regulation Updates website. The report lists which departments and which regulatory decisions have not complied with the Government’s regulatory impact analysis requirements.

Departments and agencies are encouraged to contact the OBPR early in the policy development process, and are also responsible for preparing and publishing an Annual Regulatory Plan in July each year.

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1.7.4 Legislative Instruments Act

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The Legislative Instruments Act 2003 (LI Act) establishes a comprehensive regime for the registration, tabling, scrutiny and sunsetting of Commonwealth legislative instruments. The LI Act came into effect on 1 January 2005.

Section 5 of the LI Act defines a legislative instrument for the Act. A legislative instrument is a written instrument of a legislative character made in the exercise of a power delegated by the Parliament. An instrument is taken to be legislative if it determines or alters the law, rather than applying it in a particular case, and has the direct or indirect effect of affecting a privilege or interest, imposing an obligation, creating a right, or varying or removing an obligation or right.

Section 6 declares certain instruments to be legislative, such as regulations, statutory rules, ordinances of non-self-governing territories, disallowable instruments and proclamations.

Section 7 of the LI Act declares certain kinds of instruments not to be legislative instruments. In addition, Schedule 1 of the Legislative Instruments Regulations 2004 lists a number of commonly found instruments which are not legislative instruments, for example, instruments of appointment and delegations. Sections 7, 44 and 54 of the LI Act and various Schedules of the Regulations contain a range of exemptions from the whole or parts of the LI Act.

In practice, a provision that enables an instrument to be made will usually specify whether or not the instrument is legislative in character unless section 6 or 7 of the LI Act applies.

Instruments which are not legislative may still be subject to disallowance. In order to be disallowable, such instruments must be specifically identified as disallowable non-legislative instruments for the purposes of section 46B of the Acts Interpretation Act 1901.

A legislative instrument made on or after 1 January 2005 is not enforceable unless the instrument is registered on the Federal Register of Legislative Instruments.

A legislative instrument made before 1 January 2005 must have been lodged for registration under section 29 of the LI Act to remain in force.

The requirements for registration are set out in Part 4, Division 2 and 3 of the LI Act.

The LI Act emphasises the importance of consultation by encouraging rule makers to consult experts and those likely to be affected by an instrument before it is made.

The explanatory statement for the instrument, which will be tabled in the Parliament and accessible on the register, must also contain a description of any consultation undertaken, or if not undertaken, an explanation for its absence.

Almost all registered legislative instruments will sunset after 10 years, on either a 1 April or a 1 October. Section 54 of the LI Act provides for limited exemptions. Exemptions may also be set out in other Commonwealth legislation.

The Attorney-General must, 18 months before the sunset date, table in Parliament lists of the instruments that are due to sunset. Either House of Parliament can, by resolution, exempt an instrument from sunsetting for a further 10-year period.

In most cases, the requirement to register a legislative instrument under the LI Act replaces any requirement under enabling legislation to notify or publish the instrument in the Gazette.

The Federal Register of Legislative Instruments is an electronic database, incorporated in the ComLaw website.

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The following publications set out the framework in which the issues relating to Ministerial and parliamentary matters are to be managed:

1.8.1 Cabinet Handbook

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The Cabinet is the apex of executive Government. Meeting regularly, it sets the broad directions of Government, makes important decisions facing a Government and resolves potential conflicts within Government. It is for the Government of the day, and in particular the Prime Minister, to determine the shape and structure of the Cabinet system and how it is to operate.

The Cabinet Handbook lays down the principles and conventions by which the Cabinet system operates. It also outlines the procedures designed to ensure that the Cabinet process fulfils its central purposes of contributing to consistency in public policy formulation, supporting Ministers in meeting their individual and collective responsibilities, facilitating coordinated and strategic policy development and enabling informed decision making on all issues requiring collective determination.

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1.8.2 The Drafter’s Guide (for Cabinet documents)

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The Drafter’s Guide aims to assist Ministers’ senior advisers, departmental policy advisers and Cabinet Liaison Officers in the preparation of Cabinet submissions and memoranda. The Guide is available from the Cabinet Liaison Officer in each agency.

1.8.3 Federal Executive Council Handbook

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The Federal Executive Council is established by section 62 of the Australian Constitution to ‘advise the Governor-General in the Government of the Commonwealth’. Under section 63, any functions or powers vested in the ‘Governor-General in Council’ by the Constitution must be carried out or exercised with the advice of the Federal Executive Council.

Legislation can also confer powers on the Governor-General — such as making regulations or appointing statutory office holders— that are exercised ‘in Council’.

The Federal Executive Council Handbook is issued by the Federal Executive Council Secretariat in the Department of the Prime Minister and Cabinet, for the convenience of Ministers and officials who prepare Executive Council documents. The Handbook aims to give an overview of the process and operations of the Executive Council that will assist users in preparing and submitting documents for consideration.

The appendices to the Handbook provide models for the presentation of generic documents, including for regulations and appointments. The Executive Council Secretariat can provide examples and models illustrating more complex points of process and presentation.

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1.8.4 Guidelines for the Presentation of Government Documents, Government Responses, Ministerial Statements and Other Instruments to the Parliament

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The Guidelines for Presentation of Government Documents, Government Responses, Ministerial Statements and Other Instruments to the Parliament provide advice to agencies on the procedures to be followed when preparing Ministerial statements for presentation in Parliament and arranging for the tabling in Parliament of reports and other documents, including annual reports and responses to parliamentary committee reports.

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1.8.5 Rights and responsibilities of witnesses before parliamentary committees

The Guidelines for Official Witnesses before Parliamentary Committees and related matters require public servants to assist Ministers to fulfil their accountability obligations.

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1.8.6 Guidance on Caretaker Conventions

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The Guidance on Caretaker Conventions explains and provides guidance to agencies on the conventions and practices for handling of the business of Government during the ‘caretaker period’. The caretaker period begins at the time the House of Representatives is dissolved following the calling of an election and continues until the election result is clear or, if there is a change of Government, until the new Government is appointed.

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1.8.7 Australian Government branding design guidelines

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All Australian Government agencies are required to comply with the Australian Government Branding Design Guidelines. Further information can be obtained from the Awards and Culture Branch of the Department of the Prime Minister and Cabinet, telephone (02) 6271 5601 or email governmentbranding [at] pmc.gov.au.

Australian Government websites should comply with minimum requirements relating to content, format and accessibility.

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The terms ‘Machinery of Government’ (MoG) changes and ‘administrative re-arrangements’ are interchangeable and are used to describe a variety of organisational or functional changes affecting the Commonwealth.

Some common examples of administrative re-arrangements are:

  • changes to the Administrative Arrangements Order (AAO) following a decision by the Prime Minister to abolish or create a department or to move functions/responsibilities between departments/agencies (these commonly occur after an election but can also happen at other times)
  • the creation of a new statutory agency or executive agency, or the abolition of such agencies, or
  • the movement of functions into, or out of, the APS.

Not all administrative re-arrangements involve a change to the AAO but the Prime Minister’s agreement will be required on each occasion and action may also need to be taken to move employees under section 72 of the Public Service Act 1999 (PS Act) or to transfer amounts that have been appropriated under section 32 of the Financial Management and Accountability Act 1997 (FMA Act).

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1.9.1 Administrative Arrangements Order

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Under the Constitution, the Governor-General, on the advice of the Prime Minister, appoints Ministers, establishes Departments of State and formally allocates executive responsibility among Ministers through the Administrative Arrangements Order (AAO).

The AAO is published in the Commonwealth Gazette. It sets out the matters dealt with by each Department of State and the legislation administered by a Minister of State administering a Department. The AAO entry for each Department of State covers the principal matters and legislation administered by all agencies (including statutory agencies and executive agencies) within the relevant portfolio.

The Department of the Prime Minister and Cabinet (PM&C) is responsible for the provision of advice to the Prime Minister on machinery of Government changes and the preparation of the documentation necessary to give effect to those changes. PM&C also maintains the AAOs.

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1.9.2 Financial/resource management aspects of an administrative re-arrangement

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Section 32 of the FMA Act

Where a Machinery of Government (MoG) change results in a transfer of a function to another agency, the transferring agency will need to make arrangements for the transfer of any remaining annual departmental and administered appropriations relating to the function to the gaining agency.

Section 32 of the Financial Management and Accountability Act 1997 (FMA Act) provides a process by which the Minister for Finance and Deregulation (Finance Minister), or the Minister’s delegate, may issue a determination to transfer appropriations between the transferring and gaining agencies.

The Finance Minister’s determination must relate to a transfer of a function between agencies. Transfers of functions are determined by the government of the day, in, for example, a Ministerial announcement or a formal change to the Administrative Arrangements Order.

Agency Advice Units in the Department of Finance and Deregulation should be contacted for assistance.

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Transfer of functions between FMA Act agencies and CAC bodies

Section 32 transfers can only occur between FMA Act agencies. Where a function has been transferred from a body subject to the Commonwealth Authorities and Companies Act 1997 (CAC Act) to an FMA Act agency or vice versa, section 32 of the FMA Act has no application. Agencies should contact the relevant Agency Advice Unit (AAU) in the Department of Finance and Deregulation to discuss specific circumstances. It is possible that agencies may also need to seek legal advice on these issues.

Where legal issues are likely to take some time to resolve, Finance will consider if interim measures may need to be put in place to enable continuation of service delivery. AAUs in the Department of Finance and Deregulation should be contacted for assistance.

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Transfer of Special Accounts

A Special Account is an appropriation mechanism that sets aside an amount within the Consolidated Revenue Fund (CRF) to be expended for specific purposes. The appropriation authority is section 20 or 21 of the FMA Act.

Section 20 Special Accounts are established, varied or abolished by determinations made by the Finance Minister. Determinations to establish or vary a section 20 Special Account must be tabled in both Houses of the Parliament and only take effect after a disallowance period of five sitting days. A determination to abolish a section 20 Special Account takes effect when signed by the Finance Minister.

Section 21 Special Accounts are established by separate Commonwealth legislation. They can be varied or abolished only by amending or repealing the legislation which established the Special Account. The Minister responsible for a section 21 Special Account is responsible for undertaking changes to the enabling legislation for the Special Account.

Machinery of Government (MOG) changes may result in the transfer, abolition, variation or establishment of Special Accounts. In most cases, when a function transfers between agencies, the management of any related Special Accounts follows the movement of the function. Section 21 Special Accounts transfer automatically to the gaining agency when the enabling legislation is assigned to the gaining Minister through the Administrative Arrangements Order (AAO). Agencies should consult with their relevant Agency Advice Unit in Finance on all proposals to establish, transfer, vary or abolish Special Accounts as a result of AAO changes.

For more information:

  • Special Accounts - Department of Finance and Deregulation website
  • Implementing Machinery of Government Changes: A Good Practice Guide

Special appropriations

A special appropriation is an appropriation that appears in an Act (other than those in the annual appropriation Acts), which appropriates money from the Consolidated Revenue Fund for a particular purpose.

When a MOG change occurs, portfolio Departments should review the allocation of responsibilities for administering relevant special appropriations to ensure the responsibilities lie with the appropriate agency. If responsibility for administering a special appropriation is to be transferred, the portfolio Department should ensure that the gaining agency is able to comply with its statutory responsibilities.

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Transfer of assets and liabilities between FMA Act agencies

The process for determining the amount of appropriation that is to be transferred is separate and distinct from the process of transferring assets and liabilities. FMA Act agencies should identify those assets and liabilities that are to be transferred, preferably under a Memorandum of Understanding (MoU). This identification needs to consider those assets (including cash) and liabilities that belong to the function that is to be transferred. Cash to be transferred may include amounts of cash that have been accumulated to meet future commitments, including departmental capital budgets. Accounting for the transfer should be in accordance with relevant accounting standards and the Financial Management and Accountability (Financial Statement) Orders.

Superannuation Arrangements

Since 1 July 2005, most new Australian Government employees and statutory office holders are covered by the choice of superannuation fund arrangements (choice) under the Superannuation Guarantee (Administration) Act 1992.

Choice has allowed agencies to have different superannuation arrangements, such as contribution rates, salary sacrifice contributions and employer (default) funds, agencies should consider the implications to superannuation arrangements under a MOG change. Agencies should consult with the Department of Finance and Deregulation on Australian Government superannuation scheme issues and consult with the Department of Education, Employment and Workplace Relations on industrial instruments.

1.9.3 Movement of employees as a result of an administrative re-arrangement

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Section 72 of the Public Service Act 1999 (PS Act) gives the Public Service Commissioner certain powers in relation to administrative re-arrangements. Under this section the Commissioner may:

  • move APS employees to another APS agency (without anyone’s consent) by a determination in writing
  • determine in writing that APS employees cease to be APS employees and become employees of a specified non-APS Commonwealth authority
  • determine in writing that non-APS Commonwealth employees cease to be employed as non-APS employees and become APS employees in a specified agency
  • on behalf of the Commonwealth, engage any person as an APS employee in a specified agency.

There is no power under the PS Act to move employees out of the APS to non-Commonwealth employment.

The movement or engagement of employees under section 72 of the PS Act is not subject to normal APS merit selection requirements.

The principle that ‘staff follow function’ generally applies to the movement of employees within or into the APS or between the APS and non-APS Commonwealth employment in order to give effect to an administrative re-arrangement.

Under this principle, affected employees are generally moved with their function and for those that remain under the PS Act, their employment status remains the same.

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1.9.4 Implementing Machinery of Government Changes: A Good Practice Guide

Workplace relations aspects of administrative re-arrangements

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Section 72 of the Public Service Act 1999 and regulations 8.1 and 8.2 of the Public Service Regulations 1999 set out specific provisions relating to remuneration and other conditions of employment of persons moved between APS agencies, or between the APS and other Commonwealth employment as a result of an administrative re-arrangement.

In addition, the transfer of business provisions of the Fair Work Act 2009 may be relevant where an administrative re-arrangement involves the movement of functions and employees into, or out of, the APS.

The operation of these provisions can vary depending on the circumstances of each administrative re-arrangement. As such, agencies should contact the Australian Public Service Commission for advice in these circumstances.

For more information:

  • Implementing Machinery of Government Changes: A Good Practice Guide
  • Public Service Act 1999
  • Fair Work Act 2009