Karen Grogan (SA, Australian Labor Party) Share this | Hansard source

On behalf of the Chair of the Senate Standing Committee for the Scrutiny of Delegated Legislation, I present Delegated legislation monitor 2 of 2025, together with ministerial correspondence. I move:

That the Senate take note of the report.

I seek leave to incorporate a tabling statement in Hansard.

Leave granted.

The statement read as follows—

I rise to speak to the tabling of the Scrutiny of Delegated Legislation Committee's Delegated Legislation Monitor 2 of 2025. This Monitor reports on the committee's consideration of 27 legislative instruments registered between 16 and 17 December 2024.

This Monitor contains two new instruments that the committee has commented on. These are the Competition and Consumer (Industry Codes—Food and Grocery) Regulations 2024 and the Competition and Consumer (Industry Codes—Food and Grocery) (Consequential Amendments) Regulations 2024. The principal Regulations set out a mandatory code for the food and grocery industry, to support a competitive and sustainable food and grocery sector. This includes civil penalties that may be imposed on supermarkets with annual Australian revenue exceeding $5 billion. The amending Regulations increase the amounts of civil penalties in the principal Regulations to reflect the strengthened penalty framework provided by Schedule 4 to the Treasury Laws Amendment (Fairer for Families and Farmers and Other Measures) Act 2024, which is scheduled to commence on 1 April 2025.

As the instrument prescribes a mandatory industry code to regulate the conduct of food and grocery industry participants, the committee considers that this instrument provides for significant matters that are more appropriate for parliamentary enactment under scrutiny principle (j).

Additionally, the civil penalty provisions for contravening the Code concern matters that are significant in nature, including governing the content of grocery supply agreements and the treatment of suppliers. With the increases to the penalty amounts enacted by the amending Regulations, new civil penalty amounts for contravening the Code can exceed $10 million. The committee notes that the explanatory statement does justify the appropriateness of these high penalties. However, the committee remains concerned as a matter of principle about the significant amount of these penalties as they far exceed the committee's expectations for maximum penalty amounts in delegated legislation—being 50 penalty units for individuals and 250 penalty units for corporations.

The committee also acknowledges that the explanatory statement to the principal Regulations states that prescribing these matters in delegated legislation is enabled by the Competition and Consumer Act 2010. The explanatory statement explains that prescribing the measures in the Code aims to improve accountability and address suppliers' fear of retribution for exercising their rights under the Code. As set out in Monitor 2, the committee encourages the minister to amend the explanatory statements to each of these instruments to set out why it was considered necessary and appropriate to include such matters in delegated legislation, including significant penalties. This is in accordance with the committee's expectations under principle (j) and as outlined in the committee's guidelines. Given the inclusion of significant elements of a regulatory scheme and significant penalties that are prescribed in these instruments, the committee is drawing this instrument to the attention of the Senate under standing order 23(4).

Additionally, the committee is concluding its examination of the National Land (Road Transport) (Parking) Rules 2024in this Monitor. The committee sought the Minister for Regional Development, Local Government and Territories' further advice in Monitor 1 of 2025 about the skills, qualifications and experience of APS Executive Level 1 and 2 delegates of the National Capital Authority. While the committee thanks the minister for providing further advice on this matter, the committee emphasises its expectations under principle (c) that an explanatory statement to an instrument enabling delegation below the Senior Executive Service level should include information about the skills, qualifications and experience expected of these delegates. In this regard, the committee notes that it expects this information will be included in the explanatory statement to an instrument replacing the Rules later this year.

The committee also sought advice on the specific legal authority for the delegation of powers under section 7 of the instrument, as it was not clear to the committee that the relevant provision of the enabling Ordinance provided this. The minister reiterated her earlier advice, which included that the enabling Ordinance will be replaced this year and will include express authority for delegation. The committee is concluding its examination of the instrument on the basis of this advice and thanks the minister for her engagement on this instrument. Finally, I note that on 10 February, the committee placed a protective disallowance notice on this instrument, which was subsequently withdrawn earlier today as the committee has concluded its consideration of the instrument.

In relation to protective notices of motion to disallow, I wish to emphasise that the committee occasionally uses this approach to facilitate additional time for correspondence between the minister and committee, in order to resolve the committee's scrutiny concerns, as was the case with the National Land Parking Rules. Whether the committee places a protective notice of motion to disallow on an instrument is dependent on a number of factors including the complexity of the instrument, the number of scrutiny concerns raised, the engagement by the relevant minister and the Senate sitting calendar. As a matter of practice, the committee lodges any notices of motion to disallow on the last day to do so in order to facilitate the maximum amount of additional time to engage with the minister, and will only lodge notices if there are outstanding scrutiny concerns to be resolved.

For example, on 17 September 2024 I placed a notice of motion to disallow on the Therapeutic Goods Legislation Amendment (Vaping Reforms) Regulations 2024 on behalf of the committee. This was to enable more time to engage with the Minister for Health on several outstanding scrutiny concerns. The iterative process involved much back-and-forth engagement with the minister and led to a series of amendments to improve the explanatory statement. In this instance, a longer period was required for multiple rounds of discussion of the committee's scrutiny concerns and for explanatory statement amendments to be implemented. Nonetheless, the notice was ultimately withdrawn on 5 February 2025 after 15 sitting days. On the other hand, a disallowance motion against the Explosives Regulations 2024 was only in place for two days before it was withdrawn, as the Minister for Defence promptly responded to and addressed the committee's scrutiny concerns.

The committee stresses that disallowance motions are a necessary and almost-always temporary measure to ensure time for the minister and the committee to engage and reach an outcome that resolves the committee's scrutiny concerns before the disallowance period on the instrument expires.

I would also like to take this opportunity to continue to raise awareness of the committee's scrutiny principles and expectations, outlined in Senate Standing Order 23. In previous tabling statements, I have discussed principles (a), (b) and (c). Today I would like to discuss principle (d), which relates to consultation.

Under this principle, the committee scrutinises each legislative instrument as to whether those likely to be affected by the instrument, as well as relevant experts, were adequately consulted in relation to it. The committee expects the explanatory statement to include a detailed explanation of who was consulted, the issues raised during consultation and a summary of the outcomes of the consultation process. If no consultation was undertaken, the explanatory statement should justify why no such consultation was undertaken. It is important to note that the committee's expectations are separate to the obligation imposed by section 17 of the Legislation Act, which requires that the rule-maker must be satisfied that appropriate consultation was undertaken prior to an instrument being made.

The committee raised scrutiny concerns under principle (d) 55 times at the agency level in 2024, a significant increase from just four times in 2023. While consultation matters are more commonly raised at an agency level, the committee also raised matters at a ministerial level four times in 2024, an increase from twice in 2023. As concerns regarding consultation are frequent and ongoing, the committee will continue to focus on this issue and draw attention to its expectations under principle (d) in 2025.

With these comments, I commend the committee's Delegated Legislation Monitor 2 of 2025 to the Senate.