Andrew McLachlan (SA, Deputy-President) Share this | Link to this | Hansard source

I'll now put the questions for the remaining stages of the Financial Framework (Supplementary Powers) Amendment Bill 2024. The question is that the bill now be read a second time.

Andrew McLachlan (SA, Deputy-President) Share this | Link to this | Hansard source

I will now deal with the Committee of the Whole amendments circulated by Senator David Pocock. This is sheets 2426 and 2427. The question is that the amendments on sheets 2426 and 2427 be agreed to.

Senator David Pocock's circ ulated amendments—

SHEET 2426

(1) Clause 2, page 2 (at the end of the table), add:

(2) Page 12 (after line 34), at the end of the Bill, add:

Schedule 2 — Grants administration reforms

Public Governance, Performance and Accountability Act 2013

1 Section 6

After "The Dictionary in section 8 contains a list of every term that is defined in this Act.", insert "Some additional terms used in Schedule 1 to this Act are defined in clause 2 of that Schedule.".

2 At the end of section 7

Add:

Some additional terms used in Schedule 1 to this Act are defined in clause 2 of that Schedule.

3 After Division 5 of Part 2-4

Insert:

Division 5A — Grants

59A Grants

Schedule 1 has effect.

4 At the end of the Act

Add:

Schedule 1 — Grants

Note: See section 59A.

Part 1 — Preliminary

1 Simplified outline of this Schedule

This Schedule defines the resource management framework as an overarching accountability framework for the proper use and management of public resources, including for grants administration.

This framework provides responsible Ministers, accountable authorities and officials with the flexibility to:

(a) administer grants that contribute to a range of government outcomes; and

(b) work together with non-government stakeholders, such as industry, small business and the not-for-profit sector.

Part 3 of this Schedule sets out, as part of this framework, some specific requirements for grants administration.

Part 4 of this Schedule establishes the Parliamentary Joint Committee on Grants Administration, which has a role in the resource management framework.

2 Definitions

Note: A number of expressions used in this Schedule are defined elsewhere in this Act (see section 8), including the following:

(a) CRF;

(b) other CRF money;

(c) proper;

(d) relevant money.

In this Schedule:

Committee means the Parliamentary Joint Committee on Grants Administration(see Part 4 of this Schedule).

grant has the meaning given by clause 3.

grant agreement means a written agreement formalising a grant.

GrantConnect means the Australian Government's central grants public reporting repository.

Note: In 2024, this repository could be accessed at https://help.grants.gov.au.

grants administration includes all processes involved in the grants lifecycle, including:

(a) designing grant opportunities and activities; and

(b) preparing program guidelines for the relevant grants program; and

(c) assessing and selecting grantees; and

(d) preparing and executing grant agreements; and

(e) ongoing management of grantees and grant activities; and

(f) evaluating grant opportunities and activities.

program guidelines, for a grants program, has the meaning given by clause 18.

resource management framework has the meaning given by clause 5.

3 Meaning of grant

(1) A grant is an arrangement for the provision of financial assistance by or on behalf of the Commonwealth, or by or on behalf of a corporate Commonwealth entity:

(a) under which relevant money or other CRF money is to be paid to a grantee other than the Commonwealth; and

(b) which is intended to help address one or more of the Australian Government's policy outcomes while assisting the grantee achieve its objectives.

(2) Without limiting subclause (1), a grant may take a variety of forms including payments made:

(a) as a result of competitive or non-competitive selection processes; or

(b) where particular criteria are satisfied; or

(c) on a one-off or ad hoc basis.

Note: Types of grants include, for example, research grants, grants providing for the delivery of services, grants that help fund infrastructure, and grants that help build capacity.

(3) Despite subclause (1), none of the following arrangements are grants:

(a) the acquisition of goods and services by a Commonwealth entity for its own use, or on behalf of another entity;

(b) an act of grace payment approved under section 65;

(c) a payment of compensation made under:

(i) an arrangement relating to defective administration; or

(ii) an arrangement relating to employment conditions; or

(iii) an arrangement established by a law;

(d) a payment to a person of a benefit or an entitlement established by a law;

(e) a tax concession or offset;

(f) an investment or loan;

(g) a payment:

(i) to a State under section 96 of the Constitution; or

(ii) to a State or Territory for the purposes of the Federal Financial Relations Act 2009;

unless the Commonwealth has a determinative input into the final recipients of the payments;

(h) a payment made for the purposes of the Local Government (Financial Assistance) Act 1995;

(i) a payment made for the purposes of the Australian Education Act 2013;

(j) a payment made for the purposes of the Higher Education Support Act 2003;

(k) a payment of assistance for the purposes of Australia's international development assistance programme, which is treated by the Commonwealth as official development assistance;

(l) a payment of a charitable donation by a non-corporate entity from monies received from individuals for that purpose;

(m) a membership payment for the purposes of complying with Australia's obligations under international treaties;

(n) a payment, or notional payment, from one Commonwealth entity to another;

(o) a notional payment by a Commonwealth entity to itself.

Note: Additional guidance on the range of arrangements referred to in this subclause is available on the Department's website (http:///www.finance.gov.au).

Part 2 — Resource Management Framework

4 Background to the Resource Management Framework

Ministers, accountable authorities and officials, and the third parties they deal with, operate within an environment of legislation and government policy. Within this broad context, the resource management framework consists of the legislation, policy and guidance governing the management of public resources.

This framework contains an overarching requirement that accountable authorities govern Commonwealth entities in a way that promotes proper use and management of public resources.

The key legislative requirements in this framework are located in this Act (including this Schedule) and in rules made under this Act.

Ministers, accountable authorities and officials are subject to these requirements. Officials need to advise their Ministers about the requirements that their Ministers are subject to.

5 Meaning of resource management framework

(1) The resource management framework is the overarching accountability framework for the proper use and management of public resources, including for grants administration, and consists of:

(a) requirements in this Schedule; and

(b) requirements in this Act other than in this Schedule; and

(c) requirements prescribed by the rules for the purposes of a provision of this Act other than in this Schedule; and

(d) requirements prescribed by the rules for the purposes of this paragraph; and

(e) policy guidance in instruments made by the Finance Minister under subsection 105C(1).

Note: For paragraph (e), in 2024 the relevant instrument is the Commonwealth Grants Rules and Guidelines 2017. Part 2 of that instruments sets out key principles for grant administration. In 2024, those Guidelines could be viewed on the Department's website (http://www.finance.gov.au).

(2) Without limiting paragraph (1)(b), that paragraph includes requirements in:

(a) section 15 (about the accountable authority of a Commonwealth entity governing the entity in a way that promotes the proper use and management of public resources); and

(b) section 19 (about the accountable authority of a Commonwealth entity keeping the responsible Minister informed of the activities of the entity etc.); and

(c) sections 21 and 22 (about the accountable authority of a Commonwealth entity complying with policies of the Australian Government).

6 Governing Commonwealth entities in accordance with the resource management framework

(1) The responsible Minister, accountable authority, and officials of a Commonwealth entity must comply with the requirements in the resource management framework.

(2) The accountable authority of a Commonwealth entity must ensure that the entity complies with any requirements in the resource management framework to which the entity is subject.

Note: These requirements include those set out in Part 3 of this Schedule.

Part 3 — Additional requirements for grants administration

Division 1 — Objectives and general requirements for grants administration

7 Objectives of grants administration

(1) The objective of grants administration is to promote proper use and management of public resources through collaboration with government and non-government stakeholders to achieve government policy outcomes.

(2) This objective is achieved through compliance with the following:

(a) the legislative, policy and reporting requirements and guidance set out in the resource management framework that are applicable to grants administration;

(b) whole-of-government and individual Commonwealth entity grants administration practices.

8 Requirement for internal guidelines, controls etc. relating to grants administration

A Commonwealth entity's:

(a) internal guidelines and policies, and operational guidance and controls, relating to grants administration; and

(b) program guidelines for grants programs;

must be consistent with the resource management framework.

9 Requirements for performing grants administration

A Commonwealth entity must perform its grants administration in a way that:

(a) is proportionate to the risks identified and outcomes sought; and

(b) achieves value with relevant money; and

(c) involves effective and efficient governance and accountability; and

(d) achieves probity and transparency; and

(e) is consistent with the resource management framework.

10 Requirement to record legal authority and constitutional head of power supporting grants

A Commonwealth entity must, before a grant is approved under the entity's grants program, record:

(a) the legal authority supporting the grant; and

(b) the constitutional head of power supporting the grant.

Note 1: Examples of legal authority are:

(a) section 32B of the Financial Framework (Supplementary Powers) Act 1997; and

(b) specific legislation such as Part II of the Disability Services Act 1986; and

(c) section 23 of this Act.

Note 2: Ministers, accountable authorities and officials also have obligations under the resource management framework relating to approving the commitment of relevant money, including:

(a) a Minister being satisfied, after making reasonable inquiries, that the expenditure would be a proper use of relevant money (see section 71 of this Act); and

(b) approvals of proposed commitments of relevant money be recorded in writing (see rules prescribed under this Act).

Division 2 — Requirements for planning and design of grant programs

11 Initial planning

(1) An official of a Commonwealth entity must establish and document whether a proposed arrangement is a grant before applying the resource management framework to it.

(2) An official of a Commonwealth entity who is involved in the entity's grants program must:

(a) prepare draft program guidelines for all new grant opportunities under the grants program, and prepare revised draft program guidelines if significant changes are made to the program; and

(b) have regard to any key principles for grants administration set out in instruments made by the Finance Minister under subsection 105C(1); and

(c) ensure the draft program guidelines and related internal guidance are consistent with the resource management framework; and

(d) brief the responsible Minister for the entity on the draft program guidelines; and

(e) advise the responsible Minister for the entity on the relevant requirements of resource management framework, if the responsible Minister is considering approving the proposed commitment of relevant money for a grant under the grants program.

12 Third party administering grants for a Commonwealth entity

(1) If a Commonwealth entity has an arrangement with a third party for the third party to administer grants on behalf of the entity, the accountable authority of the entity must ensure the arrangement:

(a) is in writing; and

(b) promotes the proper use and management of other CRF money; and

(c) requires the third party to administer the grants so that the resource management framework is fully complied with.

Working collaboratively across government

(2) The accountable authority and officials of a Commonwealth entity involved in grants administration must work together across government and with non-government stakeholders.

(3) When determining what the acquittal or reporting requirements are for those grants, the officials must have regard to information collected by Commonwealth Government regulators that is available to the officials.

Division 3 — Approving commitments of relevant money for grants

13 Role of officials

Approver is the accountable authority or an official

(1) If the accountable authority, or an official, (the approver) of a Commonwealth entity approves the proposed commitment of relevant money for a grant under a grants program, the approver must record in writing:

(a) the basis for the approval relative to the program guidelines for the grants program; and

(b) how the approval achieves value with relevant money.

Obligations on officials if approver is the responsible Minister

(2) If the responsible Minister for the Commonwealth entity is to approve the proposed commitment of relevant money for a grant under a grants program, an official of the entity must provide written advice to the Minister that, at a minimum:

(a) explicitly states that the spending proposal being considered for approval is a grant; and

(b) provides information on the applicable requirements of the resource management framework (particularly any ministerial reporting obligations), including the legal authority for the grant; and

(c) outlines the application and selection process followed, including the selection criteria, that were used to select potential grantees; and

(d) includes the merits of the proposed grant relative to the program guidelines for the grants program, and whether the proposed grant achieves value with relevant money.

(3) While the official does not have to rank all grants when briefing the responsible Minister on the merits of a specific grant or group of grants, the official should, at a minimum, indicate:

(a) which grant applications fully meet the selection criteria; and

(b) which applications partially meet the selection criteria; and

(c) which applications do not meet any of the selection criteria.

Any specific recommendations regarding grant applications for approval can be in addition to this information.

14 Role of the Minister as the approver

(1) The responsible Minister for a Commonwealth entity must not approve the proposed commitment of relevant money for a grant under a grants program before receiving written advice under clause 13 from an official of the entity on the merits of the proposed grant.

(2) If the responsible Minister gives that approval, the Minister must record in writing:

(a) the basis for the approval relative to the program guidelines for the grants program; and

(b) how the approval achieves value with relevant money.

15 Minister approving grants within the Minister's own electorate

(1) A responsible Minister for a Commonwealth entity may approve the proposed commitment of relevant money in relation to a grant within the Minister's own electorate.

Note: A Minister includes a Parliamentary Secretary (see the Ministers of State Act 1952).

(2) However, if the Minister does so, the Minister must:

(a) prepare a report about the grant that includes a brief statement of:

(i) the reasons for the approval; and

(ii) if the approval was contrary to the advice or recommendations of an official of the entity (see subclause 16(1))—the reasons for giving the approval contrary to that advice or those recommendations; and

(b) table the report in each House of the Parliament no later than 2 sitting days of that House after the day of the approval; and

(c) publish the report on GrantConnect no later than 2 business days after the day of the approval.

(3) Subclause (2) does not apply if:

(a) the Minister is a Senator; or

(b) the grant is one that has been approved Australia-wide, state-wide, or across a region that is larger than the Minister's own electorate, on the basis of a formula.

16 Minister approving grants contrary to advice or recommendations

(1) The responsible Minister for a Commonwealth entity may approve the proposed commitment of relevant money for a grant contrary to the advice or recommendations made by an official of the entity under clause 13.

(2) However, if the Minister (including a Senator) does so, the Minister must:

(a) prepare a report about the grant that includes a brief statement of reasons for giving the approval contrary to the official's advice or recommendations; and

(b) table the report in each House of the Parliament no later than 2 sitting days of that House after the day of the approval; and

(c) publish the report on GrantConnect no later than 2 business days after the day of the approval.

(3) Subclause (2) does not apply if the Minister has already prepared, tabled and published a report about the grant under clause 15.

Division 4 — Public reporting for grant programs

17 Scope and role of accountable authorities

(1) This Division applies to a Commonwealth entity's grants administration for a grants program it is delivering or is proposing to deliver.

(2) The accountable authority of the Commonwealth entity must ensure that the entity complies with this Division for the grants program.

Note Effective disclosure and reporting arrangements for grants administration is essential for reasons of transparency and public accountability. Reliable and timely information on grants awarded is a precondition for public and parliamentary confidence in the quality and integrity of grants administration.

18 Making and publishing program guidelines

(1) The responsible Minister for the Commonwealth entity must, by legislative instrument, determine program guidelines for the grants program that include the following:

(a) the grant opportunity process;

(b) the process (including selection criteria) for assessing grant applications and selecting grantees;

(c) the process for notifying selected grantees and entering into grant agreements with them;

(d) the key responsibilities and expectations of grantees under the grant agreements;

(e) the process for monitoring and evaluating grantees and grant activities.

Note 1: For paragraph (a), the grant opportunity process is the specific grant round or process where grants are available. This process includes mentioning whether grant opportunities are open or targeted.

Note 2: A draft of the program guidelines must be prepared by an official of the Commonwealth entity (see subclause 11(2)).

(2) The program guidelines for the grants program must be determined under subclause (1) at least 30 days before the first day applications for grants may be made under the grants program.

(3) The Commonwealth entity must ensure that the program guidelines are publicly available on GrantConnect:

(a) as soon as practicable; and

(b) at least 7 days before the first day applications for grants may be made under the grants program.

(4) Subclause (2) and paragraph (3)(b) do not apply for the grants program if the grants program relates to a national disaster or emergency.

Note: As they are a legislative instrument, the program guidelines will also be tabled in each House of the Parliament within 6 sitting days after being registered (see subsection 38(1) of the Legislation Act 2003).

19 Reporting information about each grant under the program

(1) The Commonwealth entity must report information about each grant under the grants program:

(a) on the entity's website on or before the day the grant takes effect; and

(b) on GrantConnect no later than 7 days after the day the grant takes effect.

The information can be removed from the entity's website once it is accessible on GrantConnect.

(2) Information reported under subclause (1) about a grant must specify:

(a) whether the grant agreement for the grant contains any confidentiality provisions; and

(b) if the grant agreement does so—the reasons for doing so.

(3) If an official of the Commonwealth entity determines that reporting some information about the grant would be contrary to a law (such as the Privacy Act 1988), or the grant agreement for the grant, the Commonwealth entity must:

(a) comply with subclause (1) as much as is legally possible; and

(b) document the reasons for not fully complying with subclause (1); and

(c) take reasonable steps to ensure that future grant agreements do not prevent full compliance with subclause (1).

Note: For paragraph (a), it may be possible, for example, to omit the name of the grantee and other personal information that may contravene the Privacy Act 1988, and report other grant details.

(4) If an official of the Commonwealth entity determines that complying with subclause (1) about the grant could adversely affect the achievement of government policy outcomes, the responsible Minister for the entity may seek an exemption from the Finance Minister.

20 Additional reporting requirements for grants programs worth at least $100 million

(1) This clause applies to the grants program (the reportable program) if the total amount of money forming part of the CRF that is available for grants under:

(a) the reportable program; and

(b) each other grants program (if any) of the Commonwealth entity that:

(i) is being or is proposed to be delivered in a financial year in which the reportable program is being or is proposed to be delivered (the current financial year); or

(ii) was delivered in any of the previous 3 financial years;

and that relates to the same or similar subject matter as the reportable program;

is at least $100 million (the reportable program threshold).

Note 1: The $100 million threshold is not limited to grants actually given in the current financial year or in the previous 3 financial years.

Note 2: This clause applies separately (in parallel):

(a) for each of the other grants programs covered by paragraph (b) that is being or is proposed to be delivered in the current financial year; and

(b) for each financial year in which the reportable program is being or is proposed to be delivered.

(2) The Commonwealth entity must prepare a report about each of the following stages of the reportable program:

(a) the making under subclause 18(1) of the program guidelines for the reportable program;

(b) the assessment and selection of grantees;

(c) the entering into of grant agreements with selected grantees;

(d) the conclusion of the reportable program (which should include an evaluation of the program's effectiveness).

(3) The Commonwealth entity must give each report prepared under subclause (2) about a stage of the reportable program to the Parliamentary Joint Committee on Grants Administration:

(a) within 30 days after the day that stage was completed; or

(b) such longer period as the Committee allows.

(4) Each report prepared under subclause (2) must comply with the requirements:

(a) approved by the Parliamentary Joint Committee on Grants Administration; and

(b) prescribed by the rules.

(5) The Parliamentary Joint Committee on Grants Administration must table the report in each House of the Parliament no later than 2 sitting days of that House after the day the Committee receives it.

Part 4 — Parliamentary Joint Committee on Grants Administration

21 Parliamentary Joint Committee on Grants Administration

As soon as practicable after the commencement of this clause and the first session of each Parliament, a joint committee of members of the Parliament, to be known as the Parliamentary Joint Committee on Grants Administration, is to be appointed:

(a) according to the practice of the Parliament; and

(b) as required in this Part.

22 Membership of the Committee

(1) The Committee is to consist of 16 members as follows:

(a) 6 members of the Senate appointed by the Senate;

(b) 10 members of the House of Representatives appointed by that House.

(2) No more than 8 of the Committee's members may be from a recognised political party that forms part of the Government.

(3) The Chair of the Committee must not be from a recognised political party that forms part of the Government.

(4) A member of the Committee ceases to hold office:

(a) when the House of Representatives expires by effluxion of time or is dissolved; or

(b) if the member ceases to be a member of the House of the Parliament by which the member was appointed; or

(c) if the member resigns the member's office as provided by subclause (5) or (6).

(5) A member appointed by the Senate may resign the member's office by writing signed by the member and delivered to the President of the Senate.

(6) A member appointed by the House of Representatives may resign the member's office by writing signed by the member and delivered to the Speaker of that House.

(7) Either House of the Parliament may appoint one of its members to fill a vacancy amongst the members of the Committee appointed by that House.

23 Functions of the Committee

The functions of the Committee are:

(a) to oversee Commonwealth grant administration, including:

(i) scrutinising grant program guidelines made under subclause 18(1), and regularly reporting to Parliament; about those guidelines; and

(ii) scrutinising reports from Ministers under clauses 15 and 16 regarding grant approvals, and regularly reporting to Parliament about those reports; and

(iii) any other matter relating to Commonwealth grants administration that the Committee resolves is of public importance; and

(iv) referrals from any House; and

(v) referrals from the Joint Committee of Public Accounts and Audit; and

(b) to consider, and report quarterly to each House of the Parliament, each report given to the Committee under clause 20 during the quarter.

24 Powers and proceedings of the Committee

Meetings

(1) The Committee may meet at such times and at such places within Australia:

(a) as the Committee, by resolution, determines; or

(b) subject to any resolution of the Committee, as the Chair determines.

Quorum and voting

(2) At a meeting of the Committee, 6 members constitute a quorum.

(3) All questions to be decided by the Committee are to be decided by a majority of the votes of the members present.

(4) The Chair or other member presiding has a deliberative vote and, in the event of an equality of votes, also has a casting vote.

(5) If the members present do not vote unanimously, the manner in which each member votes must, if a member so requires, be recorded in the minutes and in the Committee's report.

Other matters

(6) All other matters relating to the powers and proceedings of the Committee are to be determined by resolution of both Houses of the Parliament.

25 Annual report

(1) The Committee must, in relation to each financial year, prepare a report on the performance of its functions during the year.

(2) The Committee must table the report in each House of the Parliament.

Public Service Act 1999

5 After subsection 41B(2)

Insert:

(2A) Paragraph (1)(a) does not apply for an alleged breach of the Code of Conduct relating to the resource management framework (within the meaning of Schedule 1 to the Public Governance, Performance and Accountability Act 2013).

6 After subsection 41B(9)

Insert:

(9A) Paragraph (9)(b) does not apply for a breach of the Code of Conduct relating to the resource management framework (within the meaning of Schedule 1 to the Public Governance, Performance and Accountability Act 2013).

_____

SHEET 2427

(1) Clause 2, page 2 (at the end of the table), add

(2) Page 12 (after line 34), at the end of the Bill, add:

Schedule 3 — Improved grants reporting

Public Governance, Performance and Accountability Act 2013

1 Section 105A (paragraph beginning "It also")

Omit "also".

2 Section 105A (after the paragraph beginning "It also")

Insert:

It also provides for reporting requirements for certain types of grants approved under instruments made under section 105C (see section 105CA).

3 At the end of Division 3 of Part 4-1A

Add:

105CA Reportable grants approved under instruments

(1) This section applies if a Minister:

(a) approves a grant in accordance with an instrument made under section 105C; and

(b) the grant is a reportable grant.

(2) If the Minister approves a reportable grant, the Minister must provide a written report to the Finance Minister within 30 days of approving the reportable grant.

(3) The report must include a statement of reasons that explains the basis on which the Minister approved the reportable grant.

(4) If the Minister is a member of the House of Representatives and the Minister approves a reportable grantfor a grantee in their electorate, the Minister must include this information in the statement of reasons in subsection (3).

(5) Subsection (4) does not apply if the reportable grant is awarded Australia-wide, state-wide or across a region on the basis of a formula, and the reportable grant falls in the relevant Minister's electorate.

(6) The Finance Minister must table a copy of the report in each House of Parliament within 5 sitting days of that House after receiving the report.

(7) In this section:

grant means an arrangement for the provision of financial assistance by the Commonwealth or on behalf of the Commonwealth under which relevant money or other CRF money is to be paid to a grantee other than the Commonwealth, which can be awarded:

(a) on the basis of a variety of processes, including the following:

(i) a competitive or non-competitive selection process;

(ii) where particular criteria are satisfied;

(iii) on a one off or ad hoc basis; and

(b) for a variety of purposes, including the following;

(i) research;

(ii) providing for the delivery of services;

(iii) helping fund infrastructure;

(iv) helping build capacity.

reportable grant means a grant which is approved:

(a) based on an application which:

(i) an official has recommended should be rejected; or

(ii) does not meet any of the relevant selection criteria; or

(b) by a Minister, who is a member of the House of Representatives, for a grantee in their electorate.