Commonwealth of Australia Explanatory Memoranda

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FINANCIAL FRAMEWORK LEGISLATION AMENDMENT BILL (NO. 1) 2011

                         2010-2011



THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




              HOUSE OF REPRESENTATIVES




             FINANCIAL FRAMEWORK
     LEGISLATION AMENDMENT BILL (NO. 1) 2011




     SUPPLEMENTARY EXPLANATORY MEMORANDUM



     Amendments to be Moved on Behalf of the Government



             (Circulated with the authority of the
            Minister for Finance and Deregulation,
                Senator the Hon Penny Wong)
                                      TABLE OF CONTENTS


    Table of abbreviations and common terms ........................................................... ii
I. NOTES ON AMENDMENT ................................................................................ 1
    a)      Overview ..................................................................................................... 1
    b)      Clarifying the status of CEIs ....................................................................... 1




Supplementary Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011                        i
(Winter sittings)
        Table of abbreviations and common terms


          Abbreviation or                                   Full term or description
           common term
    Chief Executive                    Chief Executive, for a prescribed Financial Management and
                                       Accountability Act 1997 (FMA Act) Agency under the
                                       Financial Management and Accountability Regulations 1997,
                                       means the person identified by the regulations as the Chief
                                       Executive of the Agency, or, for any other FMA Act Agency,
                                       means the person who is the Secretary of the relevant
                                       Department of State (for the purposes of the Public Service
                                       Act 1999) or the Secretary or Clerk of the relevant Department
                                       of the Parliament (under the Parliamentary Service Act 1999).
    CEIs                               Chief Executive's instructions, made under section 52 of the
                                       FMA Act
    FFLA Bill 2011                     Financial Framework Legislation Amendment Bill
                                       (No. 1) 2011
    FMA Act                            Financial Management and Accountability Act 1997
    FMA Regulations                    Financial Management and Accountability Regulations 1997
    FRLI                               Federal Register of Legislative Instruments
    Item                               An item of a Schedule of the Financial Framework
                                       Legislation Amendment Bill (No. 1) 2011
    Legislative Instruments Act        Legislative Instruments Act 2003
    OLDP                               Office of Legislative Drafting and Publishing (in the
                                       Attorney-General's Department)




Supplementary Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011   ii
(Winter sittings)
I. NOTES ON AMENDMENT
     a) Overview
1.     The proposed Government amendment to the Financial Framework Legislation
Amendment Bill (No. 1) 2011 (FFLA Bill 2011) comprises a single amendment that
clarifies that Chief Executive's instructions (CEIs), made under section 52 of the
Financial Management and Accountability Act 1997 (FMA Act), are not to be treated
as legislative instruments.
2.     The amendment would appear at Item 3 of Schedule 2 of the FFLA Bill 2011.

     b) Clarifying the status of CEIs
3.    CEIs are internal management instruments that have been able to be made by
Chief Executives, under section 52 of the FMA Act, since the FMA Act commenced
on 1 January 1998.
4.    No CEIs have been registered on the Federal Register of Legislative
Instruments (FRLI), which was established under the Legislative Instruments
Act 2003 (Legislative Instruments Act) that commenced on 1 January 2005.
5.   The Office of Legislative Drafting and Publishing (OLDP), which is
responsible for FRLI, does not view CEIs as being legislative in character, nor, as a
consequence, legislative instruments.
6.   The FFLA Bill 2011 aims to improve the interaction of the FMA Act with the
Legislative Instruments Act regarding 3 types of instruments:
       · Special Account determinations (made under section 20 of the FMA Act);
       · Guidelines (such as those dealing with procurement, under section 64 of the
         FMA Act and regulation 7 of the FMA Regulations); and
       · CEIs (under section 52 of the FMA Act).
7.    The amendment proposed to the FFLA Bill 2011 would ensure that CEIs
continue to not be treated as legislative in character, given that CEIs relate to the
internal administration of each of the agencies under the FMA Act.
8.    Under the current arrangements, FMA Act agencies are not required to register
their CEIs on FRLI. The proposed amendment would ensure that this situation is
retained, through a definitive statement that CEIs are not legislative instruments.
9.    In contrast, Special Account determinations and Guidelines, such as the
Commonwealth Procurement Guidelines, are registered on FRLI: that will continue
to be the case under the FFLA Bill 2011.




Supplementary Explanatory Memorandum to the Financial Framework Legislation Amendment Bill (No. 1) 2011   1
(Winter sittings)