Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

The bill we are considering in the Senate this afternoon, the Financial Framework Legislation Amendment Bill (No. 2) 2005, is similar to the Financial Framework Legislation Amendment Act 2005, the FFLA Act, which commenced in February 2005. The bill we are considering is an omnibus bill which seeks to amendment 16 acts and repeal two acts. The amendments are mostly of a housekeeping nature. They relate to six main areas of policy. Firstly, through various acts, there is special account streamlining of the Aboriginal and Torres Strait Islander land account, the Aboriginal advancement account, the ARC research endowment account, the child support account, the gene technology account, the industrial chemicals account, the national blood account, the medical research endowment account and the natural resources management account. That is covered in schedule 1.

Secondly, a category known as compensation to eligible employees aligns the Safety, Rehabilitation and Compensation Act 1988 with the existing administrative practice of compensation due to eligible employees being paid either through Commonwealth employers or direct to employees. That is in schedule 2. The third area is act of grace payments. Schedule 3 of the bill clarifies the appropriation acts and provides the appropriation authority for an act of grace payment approved under the Financial Management and Accountability Act 1997, the FMA Act, or a payment in special circumstances to a person employed by the Commonwealth authorised under the Public Service Act 1999.

The fourth area is intelligence and security agencies. The bill extends the existing authority for the modified application of the FMA Act to cover sensitive activities of law enforcement agencies specified in regulations. The fifth area is modernising language. Schedule 3 of the bill more clearly expresses provisions in the Public Accounts and Audit Committee Act 1951. I have to ask whether it is possible to modernise language in this area of the financial framework—especially for the layperson, who I am sure is listening with great interest to this debate; I notice we are on broadcast—given the highly complex and technical financial terminology used. An attempt is being made to modernise language. Finally, there are a number of miscellaneous amendments and updates of other financial management provisions in acts in schedule 3 and the repeal of two superseded acts in schedule 4.

The Labor Party will not be opposing the passage of this legislation. However, I think Senator Murray has circulated a second reading amendment.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

No, it’s for the committee stage.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

That will be in the committee stage—good. I should note that in the committee stage an amendment will be moved which is endorsed by both Senator Murray on behalf of the Australian Democrats and me on behalf of the Labor Party opposition. That is unusual, but once again the Democrats and the Labor Party are in agreement on an approach, which we will deal with in some detail in the committee stage.

Before I conclude my remarks, I want to touch on an area for the public record, given this is financial framework legislation. As I mentioned, relatively minor areas in respect of financial management are being updated across a range of different sectors. It is certainly not apparent to Labor why some of these would be included in an omnibus piece of legislation of this nature. Nevertheless, they are included, and that does not preclude us from supporting the legislation.

I suppose this piece of financial framework legislation concludes what has been a very sorry episode in terms of financial management and accountability for this government. I refer to the initial changes, made by this government on being elected, in 1997 with the passage of the Financial Management and Accountability Act 1997, the FMA Act. This act and the changes were touted as a major new initiative in the financial management of Commonwealth departments and agencies by the newly elected Liberal government. It was almost 10 years ago that we had the passage of this new act—how time flies. The basic purpose of the new act was to devolve large areas of financial management and accountability from the Department of Finance and Administration back to government departments and agencies. Much of the work being carried out by the department of finance at that time was devolved back to the individual departments and the offices within those departments.

This sounded like a good idea, at least in theory. But in practice what occurred as a consequence was an absolute shambles of the first order. I rarely pick on and name individual public servants, but in this case I am going to. It was presided over by the now infamous Dr Boxall. It was a political appointment, so I have absolutely no qualms at all in naming Dr Boxall as the person responsible for overseeing what became an absolute shambles in the department of finance.

As I said, theoretically at least, this sounded like a good approach—devolving everything back to departments. They take responsibility for special accounts and management oversight of expenditure in a devolved way. Of course, what happened was that the department of finance slashed hundreds of jobs. Hundreds of staff were either made redundant or moved into other government departments. Unfortunately, a number of the government departments were not well enough equipped to actually do the financial decision making that was being devolved back to them.

In retrospect, what should have occurred as part of this process was much closer management of government departments as they took up these additional responsibilities, by the department of finance. But basically it was a slash-and-burn approach by the department of finance. I have to say that many good officers either lost their jobs or were moved to other entities—hundreds of people were involved in this slash-and-burn approach. What should have occurred was much greater training, supervision and coordination of government departments to ensure that they were properly equipped to take up these devolved responsibilities.

There have been a number of critical Auditor-General reports of this process over a number of years, one of which I was reading only earlier this week in response to another issue. That was the Management of net appropriation agreements, Audit report No. 28 by the Australian National Audit Office on the authorisation arrangements for some areas of revenue and expenditure across government departments and agencies.

Firstly, I place on record my congratulations to the National Audit Office. It is one of the last bastions, if you like, of true, rigorous, independent oversight of this government—one of the last bastions. Thank goodness for it. We have seen an increasingly arrogant government, now it has control of the Senate, shutting down wherever it can areas of scrutiny and oversight. The Audit Office remains one of the last, fearless bastions of independent oversight.

This Audit Office Audit report No. 28 identified very serious breaches of financial management requirements by a number of departments and agencies. As I have indicated, the government’s Financial Management and Accountability Act 1997 devolved back to departments and their heads of finance, chief executives in some cases, responsibility for authorisation of a range of expenditure and a range of receipts. What this Audit Office report revealed was that there were widespread shortcomings in the administration of appropriation arrangements. In particular, it noted:

… there has been inadequate attention by a number of agencies to their responsibility to have in place … effective—

what are known as—

Section 31 arrangements that support additions made to annual appropriations and the subsequent expenditure of those amounts.

The Audit Office acknowledged:

While many of the issues raised by this audit—

but certainly not in all of the areas audited—

are quite technical (in a legal sense), there are important considerations of appropriate accountability, including transparency, to the Parliament.

I do realise that most people do not pick up these reports and read them, but they are very useful because of the shortcomings that they identify. What we have in this particular case, I think, is one of the most critical reports of this government’s financial management and the new system that was implemented. This report identifies truly massive failures by a range of government agencies and departments in the execution of their legal requirements under section 31 of the Financial Management and Accountability Act.

The Audit Office found that, of the agreements examined—bearing in mind they did not examine them all—157, or 68 per cent, were assessed as having been ‘effectively executed’; in other words, they met legal requirements. However, 42 agreements, or 18 per cent, were assessed as ‘ineffective’ and a further 32 agreements, or 14 per cent, on the basis of legal advice from the Australian Government Solicitor, the AGS, were assessed as ‘in doubt’. So, of the spot-checking that the Audit Office carried out, some 32 per cent of agreements were defective. That is a massive proportion of defects identified. And, to the extent that the amounts were identified as having been spent without an appropriation, section 83 of the Constitution was contravened.

We are not talking here about small change. If we look at the table on page 113 of this Audit Office report, we see there was defective authorisation—in other words, illegal expenditure or receipt of moneys—to varying degrees, in the hundreds of millions of dollars over a number of years. That is over a number of years, not just one year. Let me just give you a couple of examples. Under the heading ‘“Ineffective” Section 31 agreements’, the table shows that the Australian Bureau of Statistics, from 1 July 1999 to 6 March 2005, took illegal receipt of some $135 million, while ‘receipts spent’ totalled $128 million. The Australian Federal Police had some $623 million in ‘receipts affected’ and under ‘receipts spent’ some $443 million.

This is a whole table totalling ‘receipts affected’ of some $1.7 billion and ‘receipts spent’ of some $1.162 billion under ineffective section 31 agreements—in other words, illegal expenditure of receipts. That is not small change by anyone’s definition. This came about as a result of this devolved responsibility back to agencies and government departments with, unfortunately, a failure to equip those agencies and government departments with the appropriately skilled officers—with the appropriate training and oversight so they would be equipped to do that.

When this Audit Office report was released, I note that Senator Minchin was quoted in the Financial Review as saying, ‘These are technical breaches. They have been identified and action has been taken to address them.’ He described them as mere technical breaches. That is not the description that the Audit Office gave of these identified breaches. Some of them were acknowledged as technical breaches; however, many of them were serious in nature. As I referred to earlier in my contribution, the Auditor-General, Mr McPhee, noted a handful of annual reports tabled so far and that departments and agencies had contravened section 83 of the Constitution, which relates to appropriations. That is a serious issue. It is no mere technical breach; it is a serious issue in relation to many of the expenditures that occurred.

I am pleased to note that there was a reference in the Financial Review to this Audit Office report and I am pleased to note that the Clerk of the Senate, Mr Evans, was referred to as criticising the lack of spending transparency of government. It quoted him as saying:

… section 31 agreements reduced the parliamentary scrutiny of funding decisions. “The bigger issue is you’ve got government departments generating all this loot, which they don’t get parliamentary approval to spend.”

I believe that the Clerk of the Senate, Mr Evans, is spot-on in his criticism. It was not mere technical breaches, as the Minister for Finance and Administration would like to portray it. This was another example, and the legislation we are dealing with today is really the final nail in the coffin, if I could describe it as that, of this devolved financial accountability and management back to government departments and agencies.

The government has totally reversed that policy. It has never said it publicly. It does not want to admit just what level of problem did occur with this devolved approach, but effectively the government has totally reversed its policy as announced and implemented back in 1997, and it has taken most of what had been devolved to government departments and agencies back under the umbrella of the department of finance quite directly. It is interesting to note that, as a consequence, the department of finance has employed some extra hundreds of staff to do so. Hence my earlier critique of Dr Boxall, who sacked hundreds of staff when implementing this policy. It has now been almost fully reversed, and the department of finance has re-employed hundreds of staff to fix up the mess.

I did want to put those remarks on the record with respect to this financial framework legislation, because I think there should be appropriate scrutiny. We will deal with the specific amendment in the committee stage.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The Financial Framework Legislation Amendment Bill (No. 2) 2005, with the endearing acronym of FFLAB, seeks to amend 17 acts and is arranged into four schedules. A key feature of this bill is the underlying intention to extend provisions introduced by the Financial Framework Legislation Amendment Act 2005 to a number of other acts. I will say at the outset that the Democrats support this bill. The minister’s second reading speech accurately reflects the government’s intention, which was ‘to update, clarify and align or integrate several financial management provisions in legislation’.

Among other things, this bill reflects a response to the need identified by DOFA, the JCPAA and the ANAO for better risk management practices and protections. It is legitimate to add ‘and to lessen or diminish the mismanagement and sloppy administration that has been a past characteristic of special accounts’.

While the bill is an attempt to improve matters and while we are told that the bill is purely technical—perhaps even noncontroversial—and that it makes no substantive changes, it further entrenches special accounts and the decentralised management of them, which has its own dangers, and weakens the provisions applying to law enforcement agencies.

When I support the devolution of authority and responsibility to CEOs and CFOs for agency financial affairs, why then do I say that entrenching special accounts and the decentralised management of them has its own dangers? I might say I have particular regard for the expertise of the CEO of DOFA and his supporting executives, and I might say that I have particular regard for the Minister for Finance and Administration. I say what I have just said because DOFA and its minister have no regulatory power, and various Auditor-General reports have exposed how recalcitrant, wilful or plain sloppy ministers or agency executives have been able to ignore Finance directives.

We have an effective watchdog in the ANAO, but we have no Public Service regulator to match the private sector equivalent of ASIC. We have no effective regime of enforcement or punishment of transgressions of DOFA requirements of the scale outlined by the shadow minister in the remarks he was making earlier. Therefore, a special account system that could be satisfactory in a properly safeguarded, regulated and monitored system still carries instead the dangers of unsupervised discretion and improper management. Turning to the amendments of the Public Accounts and Audit Committee Act: they do nevertheless appear to be purely for clarification.

Schedule 1 of the bill amends provisions in nine acts pertaining to special accounts and is arranged into nine parts dealing with each of the nine acts to be amended. I will not read out the acts, but they concern matters ranging from Aboriginal affairs through to natural resources management. A special account is a mechanism used to record amounts in the consolidated revenue fund that are appropriated for specified purposes and represent a notional division within the consolidated revenue fund, which, as you know, Mr Acting Deputy President, has a constitutional basis. When Audit report No. 24 2003-04 reported, the Auditor-General advised us that there were 241 special accounts in existence. In the year of audit, $10.33 billion was credited to special accounts and $10.06 billion debited to special accounts, with $3.4 billion being held.

From the Democrats’ perspective, there are two crucial matters that require further attention when we discuss schedule 1. A number of the amendments to the aforementioned acts pertain to the use and application of special accounts, which in turn are funded with special or standing appropriations, as governed by section 20(4) of the Financial Management and Accountability Act 1997, which states:

The CRF is hereby appropriated for expenditure for the purposes of a Special Account established under subsection (1), up to the balance for the time being of the Special Account.

The finance minister alone can establish a special account as well as the quantum of money to be appropriated. Since standing appropriations effectively circumvent a large degree of the parliamentary scrutiny faced by other means of appropriating public funds, including budget estimates hearings with their corresponding parliamentary approval process, my inclination has been to seek to curtail their use and application to essential matters.

There are no administrative or other merits in seeking to exempt the use of public funds from regular parliamentary scrutiny and approval, yet standing appropriations can have this very consequence and do continue to grow unchecked. The numbers of special accounts and standing appropriations and the amounts of expenditure involved have steadily grown over the life of the Commonwealth. Today and yesterday there was a fairly lengthy debate on the offshore petroleum bills, but as far as I am aware no-one raised within that debate the issue of those bills carrying standing appropriations, and yet once that is through that is the end of it. Parliament will not have to come back to them.

Standing appropriations now amount to over 80 per cent of all Commonwealth government expenditure. Comparable jurisdictions have not allowed standing appropriations to expand to this degree. Research shows that in the United Kingdom, for example, they amount to about 25 per cent of total government expenditure. More concerning still is that, in the report on the financial management of special standing appropriations of November 2004, the Australian National Audit Office found widespread illegalities and a lack of accountability and control in the management of these appropriations. More than half of the appropriations were not properly reported by departments and agencies in their annual financial statements.

By way of an example, consider the first act listed for amendment within this bill, the Aboriginal and Torres Strait Islander Act 2005. On the surface, there may appear to be little difference in converting a land fund to a land account but for the designation of this account as a special account. On closer inspection of the act, it is apparent that funds derived for the purposes of carrying out the act are derived my means of standing appropriations, as stated in section 144TA of the act in question:

Money payable to TSRA

(1) There is payable to the TSRA such money as the Parliament appropriates from time to time for the TSRA.

(2) The Finance Minister may give directions as to the amounts in which, and the times at which, money so appropriated is to be paid to the TSRA.

Also of concern is the fact that this bill directs surplus funds appropriated for the act to be invested and for earnings from the investment to be credited to the special account. That may make sense for a time, but, once the funds accumulate to a level where they are not retained earnings husbanded for later expenditure, what then? I am of the mind that, regardless of the government agency in question, if substantial surplus funds exist then such money should be returned to the consolidated revenue fund for use in other areas. I am not at all convinced that the department of finance has systems in place to monitor these issues and to police these matters effectively. Once again, I do not reflect on the quality and ability of DOFA staff; I reflect on the means by which they can do the job that is required.

There will always be a government agency or department in need of funds or that is underfunded. The automatic question therefore is: why should some agencies invest surplus funds for their own purposes when other agencies suffer a funding shortage? That is always a question that needs to be asked and answered. If there exist funds surplus to the needs of carrying out the intention of the underlying act by which a government agency or department is governed, then that agency has fulfilled its purpose with adequate funds and the surplus should be returned to general revenue.

Part 4 of schedule 1 proposes a number of amendments to the Child Support (Registration and Collection) Act 1988. Specifically, the government proposes broadening the types of accounts that can be credited to the Child Support Agency as well as broadening the types of payments that can be made from the Child Support Agency. Is the flexibility that might be achieved from broadening the types of payments and receipts made from or to the CSA either desirable or necessary? Does broadening the forms of transactions that can occur pose an unnecessary risk to the underlying system or does it improve the administration of the underlying system? These are questions that are difficult to ask, and perhaps difficult to answer, since the CSA already struggles under the pressure of many individuals and their financial difficulties and problems. Many Australians who currently maintain a responsible relationship with the CSA are acutely aware of the pressure that comes with meeting the financial obligations with which they are encumbered. I do not know the answers to my questions; I just pose them as commonsense questions.

In addition to the application of special accounts, the second key area of concern I wish to raise about this bill is the delegating of authority away from ministers to senior public servants. Once again I confirm my belief that the principle of sheeting responsibility home to the CEO and the CFO is a good one, but only if it is accompanied by full and frank accountability to DOFA and to the parliament and under a regime where regulation, enforcement and punishment for transgression operate—which they do not. That is the weakness in our system. For example, the proposed amendments to the National Health and Medical Research Council Act 1992 transfer responsibility for dealing with money held in trust from the minister for finance to the minister responsible for administering the NHMRC Act and from that minister to the chief executive officer of the NHMRC or to an APS employee.

When ministerial responsibility has deteriorated to the worrying situation of, ‘I didn’t know; I wasn’t told,’ or ‘It was the actions of a bureaucrat that caused the problem’—and fortunately we do not have anyone claiming deafness yet, as they do in the AWB farce—then the chief executive officer must be fully accountable instead. The question I would ask is: if you are going to devolve responsibility, if they are going to acquire that responsibility, are they fully accountable, especially in circumstances where the government of the day has already shown on particular issues that it is willing to muzzle them, to censor them and to require them not to answer questions in specific areas?

Schedule 2 amends the Safety, Rehabilitation and Compensation Act 1988. A number of anomalies are removed from the act, including the inability of employers to provide paid leave or sick leave to injured employees prior to the determination by Comcare and the inability of Comcare to pay employees via employers or to reimburse employers. This is achieved by the establishment of a predetermination period which allows the employee to be paid and, following a favourable determination, for Comcare to offset the compensation against the pay received whilst off work. Amendments are proposed which will also allow Comcare to pay employees via employers. This is currently prohibited under the Safety, Rehabilitation and Compensation Act but is said to be administratively superior and favourable for employees, who receive a seamless income stream whilst injured. I support these amendments, and I encourage the government to continue reform in this area.

Schedule 3 groups together a number of other amendments to disparate bills and is titled ‘Other amendments’. These amendments are so grouped as they all pertain to delegating decision-making power away from the Treasurer to the finance minister and in some cases further down the seniority list to senior public servants. The bills in question include the Australian Institute of Marine Science Act 1972, the Financial Management and Accountability Act 1997, the Native Title Act 1993 and the Public Service Act 1999.

As I have already highlighted with reference to the proposed amendment to the Child Support (Registration and Collection) Act 1988, I do have concerns about a number of provisions contained in this bill that appear to act to broaden the scope for payments to or from special accounts because they do not appear to be accompanied by sufficient regulatory safeguards. I am not talking about the determinations or the directions that are issued from Finance, which generally speaking are very good; I am talking about the ability to police them, to enforce them and, if there are transgressions, to punish those who transgress them. This includes extremely general references to special circumstances payments as proposed for the Public Service Act 1999 and acts of grace payments for the Financial Management and Accountability Act 1997, all of which are ultimately derived from special appropriations.

With regard to delegating authority, the Australian Institute of Marine Science Act 1972 gives the finance minister power to delegate authority to an official. My question to the minister would be: would you still assume responsibility for those decisions made under your delegated authority? Would the minister be responsible for the actions they have directly or indirectly authorised? Or is the new culture in the Public Service that the only person fully, absolutely and completely accountable is in fact the official and not the minister? This has become very grey in all our minds as we have watched the unfolding of the Howard government culture.

The final issue that I wish to discuss in relation to schedule 3 is the amendment to the Financial Management and Accountability Act 1997 which proposes extending access to modified applications allowed under this act to law enforcement agencies. These provisions currently only apply to intelligence and security agencies. The purpose of this amendment is to protect employees that are involved in sensitive or undercover operations. Once again, this is an amendment that reduces the level of accountability for government agencies—but for an apparently good purpose. While I agree that the safety and security of the employees concerned is of paramount importance, the government must still be held to account for the financial management of its security operations. I concur with views of the member for Melbourne, who attested in the other place that ‘these changes will take place without the benefit of the Australian Commission for Law Enforcement Integrity, promised prior to the last election but which has still not been delivered’.

Schedule 4 is the final schedule in this bill. It proposes repealing two redundant acts: the Employment Services Act 1994 and the Loan Act 1977. The Employment Services Act 1994 was passed to establish Employment Assistance Australia and the Employment Services Regulatory Authority, both of which are now non-operational organisations, making the act redundant. The Loan Act 1977 authorised the Treasurer to borrow money for the year ending 30 June 1978 and is also being repealed due to redundancy. I should say that these moments when we get rid of legislation and regulation should be greeted by a round of applause. I would remind the Senate of the calculation that, in the last 10 years, we have produced more legislation and regulation than in the previous 90 years. There must come a stage when we should be asking ourselves when enough is enough. Our real problem is in fact enforcing and regulating and ensuring that existing law operates fully and effectively and that existing law is pursued to its fullest extent. My congratulations go to the government for wiping some regulation and legislation off the books because they are redundant.

In the committee stage, with the shadow minister from Labor, I will be moving amendments to address our concern with regard to the reporting and the proper listing and aggregation of special accounts and matters like that. It has been very difficult to get a tag on what exists and in what form it is. I happen to know that DOFA has had similar concerns and has been improving its own aggregatability, if you like, to put this sort of information together. With Labor, I will be seeking to give this some legislative bite.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The Financial Framework Legislation Amendment Bill (No. 2) 2005 aims to maintain the currency of the financial and governance framework of the Commonwealth public sector and it continues the work achieved in the Financial Framework Legislation Amendment Act 2005. As we have heard, the bill is divided into four schedules. Schedule 1 proposes amendments to nine acts that establish individual special accounts. These amendments cover special accounts including the Aboriginal and Torres Strait Islander Land Account, the Aboriginal Advancement Account, the ARC Research Endowment Account, the Child Support Account, the Industrial Chemicals Account, the National Blood Account, the Medical Research Endowment Account and the Natural Resources Management Account. Most of the amendments covering special accounts are of the same type as the amendments in schedule 1 of the Financial Framework Legislation Amendment Act.

Schedule 2 of the bill proposes amendments to the Safety, Rehabilitation and Compensation Act 1988 to authorise Comcare to pay workers compensation benefits to employees either through Commonwealth employers or direct to employees. The SRC Act currently authorises compensation benefits only to be paid directly to employees. The proposed amendments reflect current and best practice to ensure there is seamless transition for the employee between payment of a salary et cetera and payment of compensation. The amendments also give effect to the conclusion of the Joint Committee of Public Accounts and Audit in its report 395, Inquiry into the draft Financial Framework Legislation Amendment Bill, supporting amendments to align the act with current good practice whereby Comcare makes compensation payments to agencies.

Schedule 3 of the bill proposes amendments to seven acts that are not included in schedules 1 or 2, and I will highlight the main amendments proposed in schedule 3. The bill proposes amendments to the FMA Act to extend to law enforcement agencies access to the modifications to the FMA Act that currently apply to intelligence or security agencies. These modifications are set out in the Financial Management and Accountability Regulations 1997—the FMA regulations. Some law enforcement agencies need to undertake sensitive activities that are similar in nature to those of intelligence and security agencies. It is therefore appropriate that they be able to access the same modified application of the FMA Act for those sensitive activities subject to ministerial agreement and consideration by parliament through amendment to the FMA regulations that would prescribe a law enforcement agency for this purpose.

Amendments to the Public Accounts and Audit Committee Act 1951 are proposed to correct, update and express in clearer language previous provisions. The amendments cover such matters as the inclusion of non-gender specific language, sectional committees, evidence taken in public or in private and payment of allowances. The amendments do not alter the intent of the existing provisions. Amendments to the Native Title Act 1993 are proposed to transfer from the Treasurer to the finance minister the power to approve the investments of surplus money by an Aboriginal and Torres Strait Islander body and to provide the finance minister with a delegation power in relation to that approval power. The amendment proposed to the Australian Institute of Marine Science Act 1972 provides the finance minister with a delegation power in relation to his existing powers to approve borrowing by and guarantees relating to the Australian Institute of Marine Science. The amendments proposed to the Native Title Act and the Australian Institute of Marine Science Act align these acts with amendments made to 25 acts by the FFLA Act.

Schedule 3 also proposes amendments to the Superannuation Act 1976 and the Public Service Act 1999 to clarify that the appropriation authority for an act of grace payment or payment to a person because of special circumstances arising out of employment by the Commonwealth is not provided in these acts. The appropriation authority would generally be an agency’s annual appropriation providing the payment relates to some matter that has arisen in the course of the agency’s administration.

Schedule 4 of the bill proposes the repeal of two acts: the Employment Services Act 1994 and the Loan Act 1977. With the commencement of the employment services market in 1998, the case management system set up by the Employment Services Act is no longer required and the Employment Services Regulatory Authority, which is established in that act, has become non-operational. Therefore, the Employment Services Act is now redundant. The Loan Act is also redundant. It authorises the Treasurer to borrow a specified amount of money during the financial year ended 30 June 1978. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.