John Watson (Tasmania, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Regulations and Ordinances, I give notice that, 15 sitting days after today, I shall move:

That the Veterans’ Entitlements (Special Disability Trust Beneficiary Requirements) Nomination of Agreement 2006, made under subsection 52ZZZWA(3) of the Veterans’ Entitlements Act 1986, be disallowed.

I seek leave to incorporate in Hansard a short summary of the matters raised by the committee.

Leave granted.

The summary read as follows—

[Legislative Instruments Act 2003 provisions apply to the instrument: must be resolved within 15 sitting days after today or the instrument will be deemed to have been disallowed.]

FRLI Number – F2006L03097

Veterans’ Entitlements (Special Disability Trust Beneficiary Requirements) Nomination of Agreement 2006

This instrument nominates, for the purposes of section 52ZZZWA(3) of the Veterans’ Entitlements Act 1986, each of the agreements entered into by the Commonwealth and a State or Territory, collectively known as the Commonwealth State/Territory Disability Agreement.  The instrument does not indicate the date of this Agreement.  Indeed, on the face of it, the instrument appears to apply to any agreement so described whenever it is made.  This would raise the prospect of breaching subsection 14(2) of the Legislative Instruments Act 2003, by which a legislative instrument may not apply any matter contained in a non-legislative instrument as in force from time to time.  The Minister advises that the Agreement is not a legislative instrument for the purposes of the Legislative Instruments Act 2003 and that it has been nominated rather than incorporated.  The Committee is seeking further advice from the Minister on these matters.

Following the receipt of a satisfactory response, on behalf of the Standing Committee on Regulations and Ordinances, I give notice that, on the next day of sitting, I shall withdraw business of the Senate notice of motion No. 1 standing in my name for three sitting days after today, for the disallowance of determination No. HIB 29/2006 made under paragraph 1(bj) of schedule 1 to the National Health Act 1953. I seek leave to incorporate in Hansard the committee’s correspondence concerning the determination.

Leave granted.

The correspondence read as follows

Determination No. HIB 29/2006 made under paragraph 1(bj) of Schedule 1 to the National Health Act 1953

19 October 2006

The Hon Tony Abbott MP

Minister for Health and Ageing

Suite MG.43

Parliament House

CANBERRA  ACT  2600

Dear Minister

I refer to Determination No. HIB 29/2006 made under paragraph (bj) of Schedule 1 to the National Health Act 1953. 

The Committee notes that this instrument amends the principal Determination which was made on 19 September 2006 and which was registered and commenced operation on 20 September 2006.  The only amendment made is to specify that the default benefit that is payable per night for nursing home type patients in a private hospital is $73.80.  In the principal Determination, the benefit was stated to be $74.80.  The Explanatory Statement indicates that this amendment is necessary because the figure of $74.80 was “an administrative oversight” that requires correction.  This amending instrument was registered on 28 September 2006, but has retrospective effect, commencing on 20 September 2006. 

The Committee makes the following comments about this present instrument, both of which suggest that this instrument has no effect.

First, the retrospective effect reduces the amount of benefit that is payable for patients and thus apparently works to the disadvantage of persons to whom that benefit is payable.  Subsection 12(2) of the Legislative Instruments Act 2003 states that a legislative instrument has no effect if it takes effect before the date it is registered and as a result the rights of a person other than the Commonwealth would be affected so as to disadvantage that person. 

The Committee notes that the Explanatory Statement argues that there is no disadvantageous effect because the instrument reduces the liability of registered health benefits organisations while leaving patient contribution rates unchanged.  On the other hand, a letter from the Office of Legislative Drafting and Publishing addressed to the Secretary of the Committee states that the retrospective operation of the instrument is detrimental and thus, under subsection 12(2) the instrument has no effect (copy attached).  With respect, the Committee has difficulty with the argument presented in the Explanatory Statement, and agrees with the conclusion reached by the Office of Legislative Drafting.

Secondly, the present instrument appears to contravene section 46 of the Legislative Instruments Act 2003.  That section provides that where a legislative instrument (in this case, the principal Determination) has been registered, then no legislative instrument the same in substance as that original instrument is to be made in the period commencing on the registration date of the original instrument (in this case, 20 September 2006) and ending 7 days after the date on which the original instrument is tabled.  The original instrument was tabled on 9 October 2006 and so no similar instrument can be made until 16 October 2006.  This present instrument was made in contravention of this section and thus appears to contravene section 46 with the result that, again, it has no effect.

The Committee draws these matters to your attention and, in particular, seeks advice as to why subsection 12(2) and section 46 of the Legislative Instruments Act 2003 should not apply.

The Committee would appreciate your advice on the above matters as soon as possible, but before 24 November 2006, to enable it to finalise its consideration of this Determination.  Correspondence should be directed to the Chairman, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

John Watson

Chairman

14 December 2006

Senator John Watson

Chairman

Standing Committee on Regulations and Ordinances

Parliament House

CANBERRA ACT 2600

Dear Senator Watson

Thank you for your letter of 19 October 2006 about Determination No. HIB 29/2006 made under Schedule 1, paragraph (1)(bj) of the National Health Act 1953.

I note the Committee’s comments that HIB 29/2006 may have a detrimental effect to patients. The sole purpose of creating HIB 29/2006 was to correct an administrative oversight in HIB 20/2006. Having considered the Committee’s comments, I believe there is a possibility that the retrospective operation of HIB 29/2006 may have a detrimental effect on someone other than the Commonwealth Government. I note that the amount of the detriment would be $0.90 per night and that HIB 29/2006 was made nine days after the principal Determination. My Department advises that no complaint has been received to date in relation to HIB 29/2006.

Whilst I acknowledge that there is a potential detriment, it may assist the Committee’s deliberations to consider the sequence of events as set out below:

HIB 20/2006 was registered with the Federal Register of Legislative Instruments (FRLI) on 19 September 2006 effective 20 September 2006;

the Nursing Home Type Patient (NHTP) contribution increased to $37.30 per day;

the Commonwealth determined basic default benefit paid by health funds to hospitals for NHTP was specified as $74.70 per day;

the default benefit should have been reduced from $74.70 to $73.80, as the combined default benefit and patient contribution is capped at $111.10 per day; and

this mistake meant the basic default benefit was not changed and is therefore 90 cents more than it should have been.

To correct this error my Department took the following steps:

HIB 29/2006 was registered with FRLI on 4 October 2006;

my Department asked for it to be retrospective i.e, to take effect from 20 September 2006;

the patient contribution was unchanged at $37.30; and

the health insurance fund default benefit was amended to the correct rate of $73.80.

A legislative instrument under Schedule 1, paragraph (1)(bj) of the National Health Act 1953 was made on 26 October 2006 in order to insert new Schedules 1, 3, 4 and 6 (HIB 31/2006). This Instrument was registered on the FRLI on 30 October 2006, and on 31 October 2006 the default benefit payable by health funds to private hospitals in relation to NHTPs was reduced from $74.70 to $73.80.

In regard to the second issue raised by the Committee, where the instrument appears to contravene section 46 of the Legislative Instruments Act 2003, I note that HIB 29/2006 is an amending determination. Its sole purpose is to change a figure appearing in the original determination (HIB 20/2006). I believe that an amending determination involving a minor mechanical amendment of this nature does not amount to a determination that is “the same in substance” as HIB 20/2006. As such it is my view, HIB 29/2006 may be made within the seven day time period without infringing section 46 of the Legislative Instruments Act 2003.

I trust the information I have provided has addressed the concerns raised by the Committee.

Yours sincerely

Tony Abbott

Minister for Health and Ageing

8 February 2007

The Hon Tony Abbott MP

Minister for Health and Ageing

Suite MG.43

Parliament House

CANBERRA  ACT  2600

Dear Minister

Thank you for your letter of 14 December 2006 responding to the Committee’s concerns with Determination No. HIB 29/2006 made under paragraph (bj) of Schedule 1 to the National Health Act 1953.

In your response you acknowledge that there is ‘a possibility’ that the retrospective operation of this Determination may disadvantage the rights of persons other than the Commonwealth, or that there may be a ‘potential detriment’ – albeit relatively minor ($0.90 per night).  The Committee is of the opinion that, regardless of the fact that the amount of detriment is small and no complaint has been received to date, the effect of subsection 12(2) of the Legislative Instruments Act 2003 applies if the retrospective operation ‘would’ be affected.  It does not depend on evidence of actual disadvantage nor the extent to which it may impact on a person or persons.  It is the view of the Committee that subsection 12(2) does apply in this case and that, as a matter of law, the instrument is thus rendered ineffective. The Committee would appreciate guidance on whether the Department has sought independent legal advice on this issue, and on the related issue of whether the uncertainties surrounding the validity of this instrument could be resolved through the making of primary legislation.

Notwithstanding the comments above, the Committee would also like to take the opportunity to address the second matter raised by this Determination, namely whether it was the same in substance as a previously tabled Determination.  The case law is sparse on this subject but in Victorian Chamber of Manufacturers v The Commonwealth (CLR 67, p.389), McTiernan J considered a regulation to be the same in substance ‘if, irrespective of its form or expression it was so much like the disallowed regulation in its general legal operation that it could be fairly said to be the same law as the disallowed regulation’.  In your response you consider that HIB 29/2006 was not the same in substance as HIB 20/2006 as it is an amending Determination involving a minor mechanical amendment.  However, the Committee notes that HIB 29/2006 included identical Schedules to those found in HIB 20/2006 with only a minor variation to one fee in one schedule.  Given McTiernan J’s test, HIB 29/2006 would seem to be the same in substance as HIB 20/2006 and therefore in breach of section 46 of the Legislative Instruments Act 2003.  The Committee would appreciate guidance on whether the Department has sought independent legal advice on this issue and its effect on the validity of the instrument.

The Committee acknowledges that ultimately the legal standing of this Determination will be a matter for the courts.

The Committee would appreciate your advice on the above matters as soon as possible, but before 26 February 2007, to enable it to finalise its consideration of this Determination.  Correspondence should be directed to the Chairman, Senate Standing Committee on Regulations and Ordinances, Room SG49, Parliament House, Canberra.

Yours sincerely

John Watson

Chairman

26 February 2007

Senator John Watson

Chairman

Senate Standing Committee on Regulations and Ordinances

Room SG49

Parliament House

CANBERRA ACT 2600

Dear Senator Watson

Thank you for your letter of 8 February 2007 in response to my letter of 14 December 2006 about Determination HIB 29/2006 made under Schedule 1, paragraph (1)(bj) of the National Health Act 1953.

As indicated in my letter of 14 December 2006, HIB 29/2006 potentially had a detrimental effect. Therefore, my Department has taken the view that, under subsection 12(2) of the Legislative Instruments Act 2003 (the LIA), this instrument had no effect. Another legislative instrument was made on 26 October 2006 (HIB 31/2006) which made further amendments to HIB 20/2006, including amendments to Schedule 4. As HIB 29/2006 had no effect, there does not appear to be a need to resolve the issue through making primary legislation.

In relation to the second issue raised by the Committee, the Australian Government Solicitor (AGS) has provided advice to my Department on the meaning of `same in substance'. I have enclosed that advice for your reference.

While the advice deals with whether an instrument can be made while HIB 29/2006 is subject to a motion to disallow (section 47 of the LIA), it also provides guidance on how the words `same in substance' should be interpreted for the purposes of the LIA.

My Department made instrument HIB 0l /2007 pursuant to that advice. The AGS’s advice indicates that regard needs to be given to the substantive effect of HIB 29/2006, which was to only amend Schedule 4, “the fact that-all the Schedules to HIB 20/2006 have been physically attached to HIB 29/2006 and registered, does not change this substantive effect of HIB 2912006.”

I trust that the information I have provided has addressed the concerns raised by the Committee.

Yours sincerely

Tony Abbott

Minister for Health and Ageing

Encl:  Attachment: Advice from AGS

Farhana

I refer to your e-mail below and to our discussions about this matter.

As foreshadowed, our advice is brief, given the urgency of the matter. We would be happy to expand on the matters in it, as necessary.

As discussed, generally, in the context of s 47, a legislative instrument would be the ‘same in substance’ with an instrument subject to a motion to disallow if it produced ‘substantially the same result ...even though they might be different in detail’ (see Pearce and Argument Delegated Legislation in Australia 3rd Edition at [13.38] when discussing Victorian Chambers of Manufactures v Commonwealth (Women’s

Employment Regulations) (1943) 67 CLR 347.

We think Schedule 5 of HIB20/2006 could be amended while HIB29/2006 is subject to a motion to disallow. In this context, we think that a legislative instrument amending Schedule 5 would not be the same in substance as HIB29/2006. The only substantive effect that HIB29/2006 had was to amend Schedule 4 which deals with Nursing Home Type Patient Accommodation. (The fact that, apparently through some error, all the Schedules to HIB20/2006 have been physically attached to HIB29/2006 and registered, does not change this substantive effect of HIB29/2006 in the context of s 47.) However, the proposed amending legislative instrument would deal with amendments to Schedule 5 which deals with Second Tier Default Benefit for Overnight and Day Only Treatment. Schedules 4 and 5 appear to us to deal with different episodes of hospital treatment. Therefore, a legislative instrument amending Schedule 5 would not be the ‘same in substance’ as HIB29/2006.

We also think the Department may revoke and remake HIB20/2006 under the current circumstances. Given the substantive effect of HIB29/2006 discussed above, we do not think that a legislative instrument revoking and remaking HIB20/2006 would be the ‘same in substance’ as it.

Regards

Peter Lahy

Senior General Counsel

Australian Government Solicitor