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1997
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
HEALTH
INSURANCE COMMISSION (REFORM AND SEPARATION OF FUNCTIONS) BILL
1997
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Health and Family Services,
the Hon. Dr
Michael Wooldridge, MP)
88759 Cat. No. 96 9149 9 ISBN 0644 504447
HEALTH INSURANCE COMMISSION (REFORM AND SEPARATION OF
FUNCTIONS) BILL 1997
OUTLINE
This Bill provides for the transfer of Medibank Private from the
Health Insurance Commission to a new company. The new company will initially be
Commission-owned, but after a transitional period, ownership of the company will
be transferred to the Commonwealth.
The Bill also confers some new
functions on the Health Insurance Commission, and restructures the way in which
the Commission's functions are conferred. The Bill effects some corporate
governance changes concerning the Commission, and makes amendments consequential
on the transfer of Medibank Private from the Commission.
FINANCIAL IMPACT
The measures in this Bill have no financial impact on the
Commonwealth.
NOTES ON CLAUSES
PART 1 - PRELIMINARY
Clause 1 - Short title
This clause sets out the short title
of the proposed Act.
Clause 2 - Commencement
This clause
provides for the commencement of the different parts of the proposed
Act.
All parts, other than Part 2 of Schedule 1 to the proposed Act and
the provisions relating to the amendments of section 9A and repeals of section
35 and paragraphs 42(a), (b) and (c) of the Health Insurance Commission Act
1973, commence on Royal Assent. The remaining provisions commence on
fund-transfer day (the meaning of this day is explained in clauses 4 and 6 of
the proposed Act), except that the provisions relating to the amendments of
section 9A and the repeals of section 35 and paragraphs 42(a), (b) and (c) - if
Schedule 2 of the Audit (Transitional and Miscellaneous) Amendment Act
1997 does not commence before the fund-transfer day - will commence
immediately after the commencement of Schedule 2 of the Audit (Transitional
and Miscellaneous) Amendment Act 1997.
PART 2 - TRANSITIONAL PROVISIONS RELATING TO THE TRANSFER OF MEDIBANK PRIVATE FROM THE HEALTH INSURANCE COMMISSION TO A SEPARATE ORGANISATION (THE NOMINATED COMPANY)
Division 1 - Introduction
Clause 3 - Simplified outline
This clause sets out a
simplified outline of the provisions of this Part of the proposed
Act.
Clause 4 - Definitions
The scope and intent of the
range of the definitions are largely self-explanatory. A number of the defined
terms are cross-referenced to specific clauses of the proposed Act or to other
laws.
It is noted, in respect of the definition of "asset", that a bank
account (as a chose-in-action) would be included as an asset.
Clause
5 - Nominated company
The means of separating Medibank Private from
the Health Insurance Commission, effected by the proposed Act, involves transfer
of the Medibank Private fund into a company, described as the "nominated
company" in the proposed Act. The "nominated company" is at first to be
Commission-owned, and ownership will subsequently transfer to the
Commonwealth.
As the company will not have been formed at time of introduction of the
proposed Act, clause 5 provides the means by which it will be identified later -
that is, by means of written Ministerial declaration. The clause requires the
company, at the time of the declaration, to be incorporated under the
Corporations Law, to have a share capital and to be Commission-owned.
Sub-clause 5(4) requires Gazettal of the Minister's
declaration.
Clause 6 - Fund-transfer day
The meaning of
"fund-transfer day" is given in this clause. It is on this day that the Act's
scheme for transfer of the Medibank Private fund, and the business of that fund,
is effected (see, in particular, the provisions of Part 2 Division 4 of the
proposed Act).
The day is determined by means of written Ministerial
determination. The day must be a day after commencement of clause 6 (that is,
after Royal Assent) and be a day when the nominated company has been registered
as a health benefits organisation under the National Health Act 1953.
(Clause 12 of the proposed Act requires the nominated company to take all steps
open to it to obtain this registration.) Sub-clause 6(4) requires Gazettal of
the Minister's determination.
Clause 7 - Commission-owned
company
Various of the provisions of Part 2 of the proposed Act apply
to the nominated company only when it is Commission-owned (and not when
ownership transfers to the Commonwealth under the provisions of clause 34).
Clause 7 explains what is meant by this term "Commission-owned" company
- a company is only Commission-owned at a particular time if all shares in the
company are legally and beneficially owned by the Commission at that
time.
Clause 8 - Crown to be bound
This clause ensures that
the Crown in the right of the Commonwealth, the States, the Australian Capital
Territory and Norfolk Island is bound by Part 2 of the proposed
Act.
Clause 9 - External Territories
Clause 9 extends Part
2 of the proposed Act to all the external Territories.
Clause 10 -
Extra-territorial operation
Clause 10 gives Part 2 of the proposed
Act an extra-territorial application. For example, this ensures the
application, of its provisions, to assets of the Commission held outside
Australia.
Division 2 - Provisions relating to the period when the nominated company is Commission-owned
Clause 11 - Commission to hold shares in the nominated
company
Sub-clause 11(1) explicitly provides the authority for the
Commission to hold shares in the nominated company, and sub-clause 11(2)
prohibits the Commission from transferring any of its shares in the company.
Sub-clauses 11(3) and 11(4) are intended to ensure that neither the Commission
nor the nominated company do anything to derogate from the Commission's full
ownership of the company, so as to thwart the ultimate transfer to the
Commonwealth of ownership of the nominated company.
Sub-clause 11(5)
provides that the remaining sub-clauses cease to have effect immediately before
the time at which the ownership of the nominated company transfers to the
Commonwealth, in order that this transfer may be effected.
Clause 12 -
Nominated company must seek registration as a registered health benefits
organisation
Sub-clauses 12(1) and 12(2) operate to require the
nominated company, when Commission-owned, to take all steps open to it to obtain
registration as a registered health benefits organisation under the National
Health Act 1953. (These steps include the making of an application to the
Minister's delegate, together with the tendering of information including
Articles of Association and rules of the organisation, and detailed financial
estimates.) By virtue of clause 6 of the proposed Act, the actual transfer of
the Medibank Private fund to the nominated company cannot occur until the
company is so registered.
Sub-clause 12(3) exempts the nominated company
from the requirements of section 73BAB of the National Health Act 1953,
but merely as an interim measure for the period until the company begins to
conduct the Medibank Private fund. Section 73BAB establishes minimum reserves
requirements for registered health benefits organisations. The exemption is
necessary because the assets of the fund will not transfer to the nominated
company, under the provisions of clause 16 of the proposed Act, until
fund-transfer day - and the company must already have been registered at
fund-transfer day.
Clause 13 - Activities of the nominated
company
The purpose of clause 13 is to ensure that the nominated
company, while Commission-owned, is not limited in its functioning by reference
to the Commission's functions and powers. Sub-clause 13(2) excludes the
nominated company from the application of section 29 of the Commonwealth
Authorities and Companies Act 1997 - section 29 prevents subsidiary
companies owned by Commonwealth authorities functioning beyond the authority's
functional regime. These provisions will ensure that the nominated
company is able to compete on a fairer footing with its competitors in the
private health fund market.
Sub-clause 13(4)
provides, further, that the boundaries of the nominated company's range of
activities may extend as broadly as the legislative powers of the Commonwealth
Parliament.
Clause 14 - Commission may provide services or facilities
to the nominated company
Sub-clause 14(1) authorises the Commission
to enter into service arrangements with the nominated company, on a
cost-recovery basis, as a transitional means of effecting the separation of
Medibank Private from the Commission in accordance with certain
Government-agreed "principles of separation". These principles included notions
of minimal disruption to the normal operations of Commission functions,
legitimate outcomes for both post-separation entities (with no resulting
advantage to either entity at the expense of the other), and the achievement of
cost neutrality at the macro level. Examples of such services or facilities as
might be provided, for a limited time, to the nominated company in this way
include personnel or registry services or leasing of property.
Reflecting
the transitional nature of these service agreements, paragraph 14(1)(c) requires
that they be entered into when the nominated company is Commission-owned - that
is, before transfer of ownership to the Commonwealth.
Division 3 - Commission to facilitate transfer of Medibank Private to the nominated company
Clause 15 - Commission to facilitate transfer of Medibank Private to
the nominated company
Clause 15 authorises the Commission to
facilitate the transfer of the Medibank Private fund from the Commission to the
nominated company and to assist, in a general sense, in the implementation of
the transfer regime set out in Part 2 of the proposed Act. (The intention of
the clause is to counter any concern that such activities would not, otherwise,
properly be supported by the Commission's functions.)
Division 4 - Transfer of Medibank Private from the Commission to the nominated company
Division 4 contains the provisions which enable the necessary transfers -
to the nominated company - of the Medibank Private fund, assets, contracts and
liabilities, and staff, to occur.
Subdivision A - Transfer of Medibank Private fund
Clause 16 - Transfer of Medibank Private fund to the nominated
company
Clause 16 provides the means by which the Medibank Private
fund (and the business of the fund) will be transferred from the Commission to
the nominated company : namely, by Ministerial formulation of a scheme, which
scheme must be in writing and Gazetted.
The requirements of the scheme
are set out in subclauses 16(2), 16(3), 16(4) and 16(6): the scheme must -
* provide that the transfer will occur on the fund-transfer
day;
* provide that the transfer does not affect the continuity of a person's
status as a contributor to the fund (for example, for purposes of waiting
periods);
* require the nominated company to adopt the fund rules in force
immediately before fund-transfer day (subject to any modifications set out in
the scheme) - but this does not prevent variation of the rules after the fund
transfer day; and
* set out outlines of any transfer-related declarations,
contracts or other arrangements (but merely outlines - not the details of such -
so that necessary commercial confidentiality may be
maintained).
Sub-clause 16(5) is a catch-all provision, to ensure that
the scheme may contain other appropriate ancillary or incidental provisions.
Sub-clause 16(9) ensures that the scheme may be varied or revoked at any time
before its effective date, fund-transfer day. Sub-clause 16(10) makes clear
that clause 16 is not to be read as limiting the more general provisions of
clauses 17, 18 or 19, relating to transfers of assets, contracts and
liabilities, respectively. A "declaration", for purposes of sub-clause 16(6),
is defined in sub-clause 16(11) as a declaration under clause 17, 18 or 19.
Subdivision B - Transfers of assets, contracts and liabilities
Clause 17 - Transfer of assets
This clause sets out the
mechanism for transferring assets of the Commission to the nominated company.
The term "asset" is defined very broadly in clause 4, and "instrument" (a term
used in paragraph 17(2)(b)) is also defined there, as including a
document.
Sub-clause 17(2) provides for the transfer of assets (through
simple asset vesting - paragraph (a); continued effectiveness of instruments -
paragraph (b); and legal succession - paragraph (c)), by means of Ministerial
declaration in writing. A time is required to be specified at which a
particular asset vests in the nominated company, but sub-clause 17(5) requires
that where an asset is an asset of the Medibank Private fund, this specified
time must occur during the fund-transfer day. The Minister's declaration is to
be Gazetted.
Sub-clause 17(6) makes clear that the sub-clause 17(2)
declaration mechanism is not the only means by which assets may be transferred
from the Commission to the nominated company - for example, assets of the
Commission may be transferred to the nominated company on a normal contractual
basis, where the transfer is not related to the separation.
Where the
"asset" the subject of a sub-clause 17(2) declaration is company shares,
sub-clause 17(7) facilitates the registration of the nominated company as the
holder of the shares, which should follow the change of share ownership.
Clause 18 - Transfer of contractual rights and
obligations
Clause 18 sets out the means by which contractual rights
and obligations are to be transferred from the Commission to the nominated
company, similar to the mechanism under clause 17 for transfer of assets.
Again, the transfer is to be achieved by means of Ministerial declaration, in
writing, with a requirement for Gazettal of the declaration.
Sub-clause
18(1) limits the operation of the clause to Commission contracts, other than
contracts of employment (staff transfers are dealt with separately, under
Subdivision C).
Under the provisions of sub-clauses 18(2), 18(3), 18(4)
and 18(5) - and in respect of specified contracts - rights and obligations cease
to be those of the Commission and become rights and obligations of the nominated
company; the nominated company is substituted for the Commission under the
contracts or related instruments; and the nominated company becomes the
Commission's successor in law.
Sub-clause 18(8) qualifies the operation
of sub-clauses 18(2) and 18(3) in a timing sense, in respect of the classes of
contracts listed there (these contracts are those which relate closely to the
functioning of the Medibank Private fund itself - as distinct from contracts
supporting the administrative operations of Medibank Private): these listed
contracts must be transferred on the fund-transfer day. For purposes of
determining the scope of paragraph 18(8)(b), paragraph 18(10) defines the terms
"goods", "services" and "supply" by importing the broad definitions contained in
the Trade Practices Act 1974, and defines "person" as including a
partnership. Examples of the type of contract which would fall within paragraph
18(8)(b) are agreements for the supply of optical goods or dental services to
Medibank Private contributors and their families.
Clause 19 - Transfer
of liabilities
Clause 19 follows a similar model to that adopted in
clauses 17 and 18, in respect of transfers of liabilities of the Commission to
the nominated company.
Sub-clause 19(2) enables the Minister, by written
declaration (which declaration is to be Gazetted - sub-clause 19(4)), to
transfer specified liabilities from the Commission to the nominated company.
The nominated company is substituted for the Commission under related
instruments, and the nominated company becomes the Commission's successor in
law. Sub-clause 19(5) mirrors sub-clause 17(5) in requiring Medibank Private
fund-related liabilities to be transferred on fund-transfer
day.
Clause 20 - Commission contracts may be split
Clause
20 enables a contract between the Commission and a supplier of goods or services
to be split into two separate contracts, a "Medibank Private contract" and a
"residual contract", each relating to a specified part of the goods or services
which are the subject of the original Commission contract. The Medibank Private
contract can then be transferred to the nominated company under clause
18.
Under sub-clause 20(3), the splitting of a Commission contract may be
effected by a written declaration of the Minister, which operates
to:
* terminate the Commission contract without giving the supplier any
entitlement to compensation or damages (other than a possible entitlement under
clause 46); and
* deem the Commission to have entered into two contracts with
the supplier, each for the supply of some of the goods or services covered by
the Commission contract, in the terms set out in the
declaration.
However, sub-clause 20(7) requires that the total
consideration payable to the supplier under the two contracts must equal the
consideration that would have been payable to the supplier under the Commission
contract, and the aggregate of the obligations imposed on the supplier under the
two contracts must not be more onerous than the obligations that would have been
imposed on the supplier under the Commission contract. These requirements
ensure that the contract splitting mechanism can only be used in circumstances
where it would be just to do so - and these requirements also make it very
unlikely that the mechanism could be said to involve an acquisition of property
otherwise than on just terms, so as possibly to give rise to a compensation
liability under clause 46.
Sub-clause 20(5) requires Gazettal of a
sub-clause 20(3) declaration, and there is a requirement for provision of a copy
of the declaration to the supplier as soon as practicable after its making
(sub-clause 20(6)). Sub-clause 20(8) mirrors the definitions provision
contained in sub-clause 18(10).
Sub-clauses 20(9) and 20(10) make clear
that "services" in clause 20 include rights arising under a computer software
licence - it is envisaged that the bulk of the Commission contracts which need
to be continued in respect of both the post- separation entities fall into this
category of computer software licences. Whilst the Government takes the view
that the meaning of "services" under the Trade Practices Act 1974 clearly
is wide enough to cover rights under software licences, the specific mention
made of these licences in clause 20(9) reflects the significance of such
licences to the Commission.
It is intended that the clause 20
contract splitting mechanism would rarely be used (if at all). The clause
provides merely a fall-back remedy, in the event that negotiations with
suppliers cannot satisfactorily be concluded.
Subdivision C - Transfer of staff
Clause 21 - Transfer of staff from the Commission
Clause 21
sets out the means by which employees of the Commission can be transferred to
the nominated company.
Sub-clause 21(2) provides for a transfer to be
effected by Ministerial declaration in writing. There is a requirement for
Gazettal of the Minister's declaration: sub-clause 21(5).
Sub-clause 21(4)
provides that the transfer mechanism set out in the clause is only operative
during the transitional phase while the nominated company is Commission-owned
and in the period of twelve months after transfer of ownership of the company to
the Commonwealth.
Clause 22 - Terms and conditions - transferred
employees
Sub-clause 22(1) makes provision in relation to
preservation at point of transfer of a transferred employee's terms and
conditions. The preserved terms and conditions are those which applied to the
employee immediately before that person's transfer time (the "transfer time" is
the time specified by the Minister in the sub-clause 21(2)
declaration).
Sub-clause 22(2) defines what is meant by "terms and
conditions" for purposes of sub-clause 22(1). These are terms and conditions
set out in:
* a determination of the Commission under subsection 28(2) of
the Health Insurance Commission Act 1973 (this is the general provision
covering determination of employee terms and conditions);
* an award, a
certified agreement or an Australian Workplace Agreement - within the
definitions in section 4 of the Workplace Relations Act 1996; or
* a
certified agreement under the Industrial Relations Act 1988 that has
continued to have effect.
Clause 23 - Accrued benefits -
transferred employees
Clause 23 provides for continuation of accrued
benefits (such as recreation leave) of a transferred employee (a person whose
employment has been transferred in accordance with a clause 21 declaration - see
definition in clause 4).
Clause 24 - Continuity of service of
transferred employees
This clause ensures that transfer of an
employee from the Commission to the nominated company, under clause 21, does not
have the effect of dislocating that employee's continuity of
service.
Clause 25 - Termination payments - transferred
employees
Clause 25 makes clear that a transferred employee is not
entitled to receive any termination payment or benefit merely because of his or
her transfer of employment as a result of Part 2 of the proposed
Act.
Clause 26 - Variation of terms and conditions - transferred
employees
Clause 26 ensures the ability of the nominated company to
deal in a flexible way with employment issues, in relation to transferred
employees, beyond their time of transfer. Terms and conditions of such
employees may subsequently be varied, but only in accordance with those terms
and conditions themselves, or by or under a law, award, determination or
agreement. The notion of "variation", for purposes of sub-clause 26(1), is
defined broadly in sub-clause 26(2) as including omissions of, or additions to,
terms and conditions, and substitutions of new terms or
conditions.
Clause 27 - Mobility rights - transferred
employees
Part IV of the Public Service Act 1922 deals with
mobility rights of certain public employment officers (covering matters such as
accrual of leave and rights to return to the service or apply for positions).
The effect of clause 27 is that transferred employees will retain any current
Part IV mobility rights, at the point of transfer.
Clause 28 -
Re-transfer of staff from the nominated company
Clause 28 makes
provision in relation to the re-transfer, to the Commission, of employees who
had originally transferred to the nominated company under clause 21. The intent
of the re-transfer provisions is to give some flexibility to the Commission and
the nominated company, for a time-limited period, to settle and adjust the
staffing needs of both entities.
The provisions for re-transfer mirror
those in respect of transfer, in clause 21.
Sub-clause 28(2) provides for
a re-transfer to be effected by Ministerial declaration in writing. There is a
requirement for Gazettal of the Minister's declaration: sub-clause
28(5).
Sub-clause 28(4) provides that the re-transfer mechanism set out
in the clause is only operative during the transitional phase while the
nominated company is Commission-owned and in the period of twelve months after
transfer of ownership of the company to the Commonwealth.
Clause 29 -
Terms and conditions - re-transferred employees
Sub-clause 29(1)
makes provision in relation to the terms and conditions on which the
re-transferred employee is taken to be engaged by the Commission at the point of
re-transfer : these are to be no less favourable than those that applied to the
person immediately before the re-transfer time (the "re-transfer time" is the
time specified by the Minister in the sub-clause 28(2)
declaration).
Sub-clause 29(2) defines what is meant by "terms and
conditions" for purposes of sub-clause 29(1). These are terms and conditions
set out in :
* a written contract of employment;
* a determination
under subsection 28(2) of the Health Insurance Commission Act 1973 that
was preserved at the point of original transfer to the nominated company from
the Commission, by operation of sub-clause 22(1); or
* an award, a certified
agreement or an Australian Workplace Agreement - within the definitions in
section 4 of the Workplace Relations Act 1996.
Clause
30 - Accrued benefits - re-transferred employees
Clause 30 provides
for continuation of accrued benefits (such as recreation leave) of a
re-transferred employee (a person whose employment has been transferred in
accordance with a clause 28 declaration - see definition in clause
4).
Clause 31 - Continuity of service of re-transferred
employees
In a manner similar to clause 24 (in respect of transferred
employees), clause 31 ensures that the re-transfer of an employee from the
nominated company to the Commission, under clause 28, does not have the effect
of dislocating that employee's continuity of service.
Clause 32 -
Termination payments - re-transferred employees
Clause 32 makes clear
that a re-transferred employee is not entitled to receive any termination
payment or benefit merely because of his or her re-transfer of employment as a
result of Part 2 of the proposed Act.
Clause 33 - Variation of terms
and conditions - re-transferred employees
Clause 33 mirrors clause 26
(in respect of transferred employees), in ensuring the ability of the Commission
to deal in a flexible way with employment issues, in relation to re-transferred
employees, beyond their time of re-transfer. Terms of conditions of
re-transferred employees may subsequently be varied, but only in accordance with
those terms and conditions themselves, or by or under a law, award,
determination or agreement. The notion of "variation", for purposes of
sub-clause 33(1), is defined broadly as including omissions of, or additions to,
terms and conditions, and substitutions of new terms and conditions.
Division 5 - Acquisition by the Commonwealth of shares in the nominated company
The provisions of this Division deal with the separation of the nominated
company from the Commission, by the transfer of ownership of the company to the
Commonwealth.
Clause 34 - Acquisition by the Commonwealth of shares in
the nominated company
This clause provides the mechanism for transfer
of full ownership of the nominated company from the Commission to the
Commonwealth. This notion of full ownership is imported by the language of
"legal and beneficial" ownership of shares, used in sub-clause 34(1) (and,
earlier, in clause 7).
Sub-clause 34(2) provides for the transfer, from
the Commission to the Commonwealth, of full ownership of all the shares in the
nominated company, by means of Ministerial declaration in writing. The
declaration may cover simple vesting of the shares (paragraph 34(2)(a)),
continued effectiveness of instruments (paragraph 34(2)(b)), and legal
succession (paragraph 34(2)(c)). A time is required to be specified at which
the shares vest in the Commonwealth.
The Minister's declaration is to
be Gazetted.
Sub-clause 34(5) facilitates the registration of the
Commonwealth as the holder of the shares.
Clause 35 - Commonwealth to
retain ownership of the nominated company
Once the ownership of the
nominated company has transferred to the Commonwealth under clause 34, clause 35
operates to prohibit the Commonwealth from transferring any of its shares in the
company. Just as restrictions were imposed on the Commission while the
nominated company was Commission-owned (under sub-clauses 11(3) and 11(4)), so
too is the Commonwealth prohibited from doing anything to derogate from its full
ownership of the company : sub-clauses 35(3) and 35(4).
Division 6 - Exemption from stamp duty
Clause 36 - Exemption from stamp duty
Broadly speaking,
clause 36 exempts from State or Territory stamp duty or other tax, the various
transfer and other transactions under the specified clauses of Part 2 relating
to the transfer of Medibank Private to the nominated company, and ultimate
transfer of that company to the Commonwealth. This exemption is necessary in
terms of the Government's desire to effect the separation of Medibank Private
from the Commission on a "cost neutral" basis.
Sub-clause 36(1) defines
"designated matter" for purposes of the clause, by reference to matters,
transfers or agreements relating to or arising under clauses 16 (transfer of
fund), 17 (transfer of assets), 18 (transfer of contracts), 19 (transfer of
liabilities), 20 (contract splitting) or 34 (transfer of company to the
Commonwealth). By virtue of sub-clause 36(2), the exemption is to operate very
broadly in respect of the "designated matters", extending to anything done
because of or in connection with or arising out of such matters.
Division 7 - Miscellaneous
Clause 37 - Transfers of land may be registered
Clause 37
relates to registration of dealings in land. It is facilitative of the
transfers of land from the Commission to the nominated company that may occur
under a clause 17 Ministerial declaration. Sub-clause 37(1) provides, in
respect of land which has so transferred to the nominated company, that there
may be lodged with a "land registration official" (this term is defined in
clause 4) a certificate signed by the Minister which identifies the land and
makes reference to the transfer. The official may then register the matter in
the usual way and effectuate the certificate: sub-clause 37(2). A certificate
which appears to be a sub-clause 37(1) certificate is presumed so to be (unless
it is shown otherwise): sub-clause 37(3).
Clause 38 - This Part does
not modify registers kept by land registration officials
This clause
makes clear that, despite the operation of the Part by which one party may be
deemed to be substituted for another in a specified instrument, this of itself
does not modify the relevant register kept by a State or Territory land
registration official. In other words, any action necessary under State or
Territory law to effect a modification to an entry in such register must still
be taken.
Clause 39 - Application of Lands Acquisition
Act
Clause 39 excludes things done under Part 2 from the application
of the Lands Acquisition Act 1989. This Act deals with the acquisition
of land by the Commonwealth and certain agencies. Under regulations to the Act,
the Commission is currently an authority exempt from the Act's application, in
any event.
Clause 40 - Legislative Instruments Act does not apply to
this Part
Clause 40 makes clear that instruments made under Part 2 of
the proposed Act (other than regulations made under clause 53) are not to be
taken to be legislative instruments for purposes of the Legislative
Instruments Act 1997. (It is expected that the Legislative Instruments
Act 1997 will be passed by the Parliament, before passage of the proposed
Act). It would clearly be inappropriate that Part 2 instruments (other than
clause 53 regulations) be treated as legislative instruments, as they do not
constitute legal regulation but merely effect the necessary transfer mechanisms.
It would be inappropriate for such instruments to be subject to the
disallowance regime, and would threaten the smooth transition to separation.
Clause 41 - Transfer of pending proceedings
This clause
deals with transfer of pending civil proceedings relating to an asset,
liability, right, benefit or obligation which has transferred either from the
Commission to the nominated company, or from the Commission to the Commonwealth
(in respect of ultimate transfer of ownership of the nominated company itself),
as a result of a Ministerial declaration under Part 2.
Sub-clause 41(2)
provides the general rule, in respect of such pending proceedings, that the
successor in relation to the asset, liability, right, benefit or obligation the
subject of the proceedings, will be substituted for the original party.
However, the Minister may determine otherwise, in writing.
Clause 42 -
Operation of this Part does not place a person in breach of contract
etc.
Clause 42 makes clear that the operation of the transfer
provisions contained in Part 2 is not to have unintended consequences in terms
of :
* placing a person in breach of contract or confidence;
* making
a person guilty of a civil wrong;
* placing a person in breach of a
contractual restriction or prohibition on assignment or transfer, or on
disclosure of information (for example, a prohibition on disclosure of the terms
of the contract to another person - where the transfer of a contract from one
entity to another will necessarily involve the terms being revealed to that
other entity); or
* releasing any surety from release of the surety's
obligations in relation to the transferred liability or
obligation.
Clause 43 - Transfer of Records
Clause 43
enables the Minister to direct the Commission to transfer specified records
(being Commission records that relate to Medibank Private) to the nominated
company, and for effect to be given to such direction. "Record" is given the
same meaning it has in the Archives Act 1983.
This clause operates
subject to clause 48, which deals with "Commonwealth records" within the meaning
of the Archives Act 1983.
Clause 44 - Nominated company not to
be an agency of the Commonwealth etc.
This clause provides that the
nominated company is not to be taken to be a Commonwealth authority, established
for a public or Commonwealth purpose, or a public authority or a Crown agency or
instrumentality, (within the ordinary meaning of those expressions) unless a law
expressly provides so. (Sub-clause 44(2) provides a definition of "law", for
purposes of the clause - Commonwealth, State and Territory Acts are covered, as
are regulations and instruments made thereunder.) The clause avoids the
unintended application to the nominated company of laws which base their
application on general notions such as "public purpose".
It is noted
that clause 44 does not operate to exclude the nominated company, when
Commonwealth owned, from the operation of the Archives Act
1983.
However, clause 44 will have the effect of excluding the
nominated company, in an ongoing sense, from the operation of the Privacy Act
1988 and the Freedom of Information Act 1982 (transitional
arrangements are put in place by clauses 50 and 51). The rationale for these
exclusions is that the nominated company should not formally be subject to this
type of competitive burden. It is intended, though, that the nominated company
will operate within the spirit of these regimes.
Clause 45 -
Application of certain provisions of the Corporations Law
Sub-clause
45(1) provides that section 186 and paragraph 461(d) of the Corporations Law do
not apply to the nominated company. These Corporations Law provisions impose
certain consequences (in respect of liability for debt and winding up) if the
number of members of a company falls below five. It is desired to ensure that
the nominated company may be owned solely by the Commission, and solely by the
Commonwealth (upon its transfer).
Sub-clauses 45(2) and 45(3) relate to
subsection 249(7) of the Corporations Law. Subsection 249(7) makes provision in
relation to holding companies which hold the whole of the issued shares in a
subsidiary: in this event, a minute may be signed by an authorised
representative of the holding company giving effect to certain matters which
would normally be required to be dealt with at a general meeting. Sub-clauses
45(2) and 45(3) apply subsection 249(7) to the nominated company as if the
situation were that of a holding company, and specify the Chairperson and the
Minister to be the authorised representatives for the Commission and the
Commonwealth, respectively.
Clause 46 - constitutional
safety-net
Sub-clause 46(1) imposes a liability on the Commonwealth
to pay compensation of a reasonable amount if, apart from that provision, the
operation of Part 2 (containing the various transfer provisions) would result in
an acquisition of property from a person otherwise than on just terms and the
acquisition would be invalid due to paragraph 51(xxxi) of the Constitution.
Sub-clause 46(3) defines the expressions "acquisition of property" and "just
terms" by reference to the Constitution.
Under sub-clause 46(2), resort
may be had to the Federal Court for recovery of such reasonable amount of
compensation as the court determines, where the amount cannot be agreed between
the Commonwealth and the person.
Clause 47 -
Delegation
Sub-clause 47(1) enables the Minister to delegate all or
any of his functions or powers under Part 2 of the proposed Act (other than
Subdivision C of Division 4 - dealing with transfer of staff, and clause 45 -
dealing with the Minister's representational functioning in respect of the
Commonwealth-owned nominated company) to the Chairperson of the
Commission.
Functions and powers of the Minister relating to transfer of
staff, by virtue of sub-clauses 47(2) and 47(3), may be delegated to all or any
of various specified combinations of the Managing Director of the Commission,
the Chief Executive Officer of the nominated company and the Human Resource
Managers of the Commission and the nominated company. The intention is that the
interests of both the Commission and the nominated company, in respect of staff
transfers and re-transfers, be adequately represented through this joint
decision-making scheme of delegation.
In relation to the Minister's powers
under sub-clause 45(3), sub-clause 47(4) enables a delegation in favour of the
Secretary to the Department or any Senior Executive Service officer in the
Department.
Sub-section 47(5) sets out necessary definitions of "Chief
Executive Officer", "Human Resources Manager", "Managing Director" and "Senior
Executive Service office".
Clause 48 - Commonwealth
records
Sub-clause 48(1) makes clear that Commonwealth records
(within the meaning of the Archives Act 1983) must not be transferred or
otherwise dealt with, other than in accordance with that Act. In particular,
sub-clause 48(2) requires Australian Archives permission for transfers of
Commonwealth records.
The intention of sub-clause 48(3) is to ensure that
the nominated company, in the transitional phase while it is Commission-owned,
is covered by the Archives Act regime (as will the company be covered, when
Commonwealth-owned, by virtue of the application of various of the definitions
provisions of that Act).
Clause 49 - Complaints and investigations
under the Ombudsman Act 1976
This clause ensures that
unfinalised Ombudsman Act matters (including those which have not yet
crystallised as actual complaints), in connection with the Commission's Medibank
Private functions, and relating to the period before fund-transfer day, are able
- on and after the fund-transfer day - to be continued through the substitution
of the nominated company for the Commission. (It is intended that the nominated
company will not be subject, in an ongoing sense, to the Ombudsman Act
1976 - but this is to be achieved, outside the scope of the proposed Act, by
regulation under the Ombudsman Act 1976 itself.)
Clause
50 - Requests under the Freedom of Information Act 1982
In a
manner similar to clause 49, sub-clause 50(1) continues unfinalised Freedom of
Information requests for access to documents which have transferred to the
nominated company under Part 2, by means of deemed transfer of the requests to
the nominated company on the fund-transfer day.
Consistent provision is
also made, by sub-clause 50(2), for substitution of the nominated company in
relation to actual (or potential) applications under the Administrative
Appeals Tribunal Act 1975 for reviews of such FOI decisions of the
Commission and in relation to requests for statements of reasons for such
decisions.
Clause 51 - Complaints and investigations under the
Privacy Act 1988
This clause is like clauses 49 and 50.
Clause 51 continues unfinalised complaints to the Privacy Commissioner under the
Privacy Act 1988 (including those which have not yet crystallised as
actual complaints), and unfinalised investigations, in relation to acts or
practices of the Commission before the fund-transfer day and in connection with
the performance of the Commission's Medibank Private functions. Such complaints
and investigations are deemed to transfer to the nominated company on the
fund-transfer day, and are able to be so dealt with.
Clause 52 -
This Part does not authorise the imposition of taxation
This clause
makes clear that Part 2 does not authorise the imposition of taxation, such as
would offend against the requirement of section 55 of the Constitution that
taxation laws deal only with the matter of imposition of
taxation.
Clause 53 - Regulations
This clause contains a
general regulation-making power, permitting the Governor-General to make
regulations prescribing matters as required or permitted by Part 2 or which are
necessary or convenient for the carrying out of the Part.
PART 3 - AMENDMENTS
Clause 54 - Schedule(s)
Clause 54 is the clause which
(subject to the clause 2 commencement provisions) effects certain changes to the
Health Insurance Commission Act 1973 and other Acts and to the Health
Insurance Commission Regulations, as set out in Schedules 1 and 2 to the
proposed Act. Broadly speaking, these changes relate to the rationalisation of
the Commission's functions (including the addition of new functions), corporate
governance changes concerning the Commission, and amendments consequential on
the transfer of Medibank Private from the Commission.
Schedule 1 - Amendment of Acts
Part 1 -
Amendments commencing on Royal Assent
Part 1 sets out amendments which commence on Royal
Assent.
Health Insurance Commission Act 1973
Items 1 to 34
deal with amendments to the Health Insurance Commission Act
1973.
Item 1 - Subsection 3(1) (paragraph (a) of the definition of
recognised class of functions)
This item, in effect, removes
from the definition of "recognised class of functions" in subsection 3(1) words
relating to functions conferred on the Commission under section 8E. The
amendment is consequential on the Part's restructuring of the way in which
functions are conferred, including repeal of Part IIB of the Health Insurance
Commission Act 1973 (which contains section 8E).
The notion of
"recognised class of functions" is used in Part V of the Health Insurance
Commission Act 1973, in relation to apportionment of assets, expenditure and
so on between different functions of the Commission.
Item 2 -
Subsection 3(1) (paragraph (c) of the definition of recognised class of
functions)
Item 2 substitutes a reference to "subsection 8AA(2)"
for the reference to "section 8E" in paragraph (c) of the definition of
"recognised class of functions" in subsection 3(1). Later items 11 and 12
introduce the new section 8AA and effect the repeal of section
8E.
Item 3 - Subsection 3(1) (paragraphs (e) and (f) of the definition
of recognised class of functions)
This item repeals paragraphs
(e) (referring to the consultancy functions of the Commission) and paragraph (f)
(referring to the information technology functions of the Commission) of the
subsection 3(1) definition of "recognised class of functions", and substitutes
paragraphs referring to the new service delivery functions of the Commission and
the new spare capacity functions of the Commission. These new functions are
conferred by new section 5 of the Health Insurance Commission Act 1973
(and are spelt out in new sections 7 and 8 of that Act): see later item
11.
The consultancy functions of the Commission, and its information
technology functions, by virtue of later provisions of the Schedules, are remade
as prescribed functions for purposes of new subsection 8AA(2) of the Health
Insurance Commission Act 1973.
Item 4 - Subsection 3(1)
(definition of function)
This item repeals the subsection 3(1)
definition of "function". The definition is redundant, and in the context of
the restructuring of functions, the opportunity is taken to remove
it.
Item 5 - Subsection 3(1) (definition of power)
The subsection 3(1) definition of "power", also, is redundant, and
the definition is repealed by this item.
Item 6 - Subsection
3(1)
Item 6 inserts a new definition of "medicare functions", in
relation to the Commission, by cross-reference to new section 6, inserted by
item 11.
Item 7 - Subsection 3(1)
This item inserts a new
definition of "service delivery functions", in relation to the Commission, by
reference to new section 7, inserted by item 11.
Item 8 - Subsection
3(1)
Item 8 inserts a new definition of "spare capacity functions",
in relation to the Commission, by reference to new section 8, inserted by item
11.
Item 9 - Paragraph 3(2)(a)
Item 9 repeals paragraph
3(2)(a) of the Heath Insurance Commission Act 1973. That paragraph
refers to the medicare functions of the Commission by means of cross-reference
to section 5 of the Health Insurance Commission Act 1973: section 5 is
repealed by later item 11.
Item 10 - Paragraphs 3(2)(bb) and
(bc)
Item 10 repeals paragraphs 3(2)(bb) and (bc). These paragraphs
refer to the Commission's consultancy and information technology functions by
means of cross-reference to sections of the Health Insurance Commission Act
1973 which are repealed by later item 12.
Item
11
Section 5 - Functions of the
Commission
Item 11 repeals section 5 of the Health Insurance
Commission Act 1973, which refers merely to the medicare functions of the
Commission (paragraph 5(a) includes now redundant notions of "planning and
establishment", reflecting the original conferral of the medicare functions on
the Commission). A more expansive section 5 is substituted. The functions of
the Commission are listed as:
(a) the medicare functions mentioned in
section 6;
(b) the service delivery functions mentioned in section
7;
(c) the spare capacity functions mentioned in section 8;
(d) the
additional functions mentioned in section 8AA;
(e) things incidental or
conducive to performance of the above functions.
New sections 6, 7, 8,
8AA and 8AB are then inserted, as follows.
Section 6 -
Commission's medicare functions
The Commission's medicare
functions are expressed to be the functions conferred on it by or under the
Health Insurance Act 1973. The medicare functions are not changed in any
way by the insertion of new section 6: the relevant language of original
section 5 is replicated in new section 6.
Section 7 - Commission's
service delivery functions
The Commission's service delivery
functions are expressed to be the provision of Commonwealth services (as defined
in subsection 7(5)) in accordance with service arrangements (as explained in
subsection 7(2)), and the doing of anything else included in the arrangements
that is incidental, conducive or related to the provision of the
services.
Subsection 7(2) enables the Commission to enter into service
arrangements with the principal officer of a Commonwealth authority for the
provision of specified Commonwealth services, subject to specified conditions.
The Minister must approve (in writing) the Commission's entry into an
arrangement. Subsection 7(5) defines necessary terms, including "Commonwealth
authority", "Commonwealth service" and "principal officer".
Subsection
7(3) provides an expansive expression of the types of arrangements which may be
included in the service arrangements, and gives examples of provision of staff
for performance of delegated functions under enactments, and determining a
person's eligibility for the services.
Subsection 7(4) makes clear that
the service arrangements may provide for payment of amounts to the
Commission.
Section 8 - Commission's spare capacity
functions
In subsection 8(1), the Commission's spare capacity
functions are expressed to be the provision, on request, of services or
facilities on a commercial basis, where the Minister has approved (in writing)
the provision of the services or facilities and where any or all of certain
conditions are satisfied, namely :
* the provision of the services or
facilities utilises the Commission's spare capacity;
* the services or
facilities relate to a designated matter ("designated matter" is defined in
subsection 8(3), by reference to relevant heads of Commonwealth constitutional
power);
* the provision of the services or facilities maintains or improves
the specialised technical skills of the Commission's staff in relation to a
designated matter.
Subsection 8(2) qualifies the potential scope of the
Commission's spare capacity functions, by making clear that the section does not
authorise performance of a function where this would impede the Commission's
capacity to perform its other functions. Other legislative provisions, relating
generally to the Commission's "functions" or "operations" (such as those
concerning the furnishing of information to the Minister about the carrying out
of the Commission's functions), will apply to the new spare capacity
functions.
Section 8AA - Commission's additional
functions
Section 8AA sets out the additional functions of the
Commission ( as referred to in paragraph (d) of the section 5 listing of
functions). Subsection 8AA(1) sets out three categories of "additional
functions":
(a) functions conferred by or under the Health Insurance
Commission Act 1973 itself (other than the sections 6, 7 or 8 functions) or
under any other Act (other than the Health Insurance Act 1973, under
which the Commission's medicare functions are conferred);
(b) functions
conferred by regulations - see subsection 8AA(2);
(c) functions conferred by
written determination of the Minister - see subsection
8AA(4).
Subsections 8AA(2) and 8AA(3) relate to Commission's functions as
prescribed by regulations. The manner of performing functions conferred both by
regulation and by Ministerial determination may be set out: subsection 8AA(3)
and 8AA(5).
Subsection 8AA(6) provides that a Ministerial determination
under subsection 8AA(4) is a disallowable instrument for purposes of section 46A
of the Acts Interpretation Act 1901,
meaning that such determination
must be tabled in both Houses of the Parliament and is subject to disallowance
by either House.
It is noted that the Commission's child care rebate
functions (which, within the terms of new subsection 8AA(1), will be conferred
by an "other Act") are expected to be removed by later amending
legislation.
Section 8AB - Commission may perform functions under
State and Territory laws
Section 8AB contemplates the possibility of
conferral of powers or functions on the Commission, under State or Territory
law. The section records Parliament's intention that the Commission may
exercise such powers or perform such functions, subject to it having the written
approval of the Minister. Recognising the constraints imposed by the
Constitution, section 8AB will allow the Commission - should a State law so
provide - to enter into agreements with a State (or jointly with the
Commonwealth and a State) for the provision of services.
Item 12 -
Parts IIAB, IIAC and IIB
Item 12 repeals Parts IIAB, IIAC and IIB of
the Health Insurance Commission Act 1973.
Part IIAB deals with
the Commission's consultancy functions, and Part IIAC with the Commission's
information technology functions. Both of these classes of functions are remade
as prescribed functions of the Commission, under new subsection 8AA(2) of the
Health Insurance Commission Act 1973, by item 2 of Schedule 2 to this
Act.
Item 13 - At the end of section 8G
Section 8G covers,
in general terms, the powers of the Commission. Item 13 adds a reference to the
power of the Commission to form, or participate in the formation of, companies.
The addition is merely confirmatory of the existing power of the Commission in
this regard.
Item 14 - Subsection 8J(1)
Item 14 repeals
subsection 8J(1), which subjects the Commission to written directions of the
Minister in the performance of its functions or exercise of its powers. A new
subsection 8J(1) is substituted, referring to the giving of written directions
by the Minister: the change is one of expression rather than substance.
A new subsection 8J(1A) is added, specifically authorising the Minister
to direct the Commission to enter into an agreement under section 8JA within a
specified period. (Item 29, below, ensures that this subsection 8J(1A) power of
direction is exercisable by the Minister only - that is, this power may not be
delegated.)
There is no change to the requirements of subsections 8J(2)
and 8J(3) regarding reporting and tabling of directions under section
8J.
Item 15 - Subsection 8J(2)
The amendment made by this
item is consequential on the addition of new subsection 8J(1A).
Item
16 - Subsection 8J(2)
This item makes a very minor change,
consequential upon changes to be made to section 42 by the Audit
(Transitional and Miscellaneous) Act 1997 and this Schedule 1 (see item 70
below).
Item 17 - Subsection 8J(3)
Item 17 remakes
subsection 8J(3), substituting a more modern statutory formulation. There is no
change in substance, in terms of the application of the requirements of the
Acts Interpretation Act 1901, as to tabling, disallowance and so
on.
Item 18 - After section 8J
Item 18 inserts in the
Health Insurance Commission Act 1973 new section 8JA, dealing with
agreements about functions and powers of the Commission. Section 8JA authorises
the Minister to enter into an agreement with the Commission about the
performance of its functions and the exercise of its powers. An agreement may
be entered into in respect of any of the Commission's functions, including in
relation to the Commonwealth's service delivery functions under new section 7.
It is thought that such agreements might be useful in clarifying
respective roles and responsibilities, in relation to the Commission's functions
and powers, as between the Commission and the Minister (and his Departmental
officers).
Item 19 - Paragraph 10(1)(c)
Item 19
repeals paragraph 10(1)(c), which enables appointment of up to 7 members of the
Commission (in addition to the Chairperson and the Managing Director). A new
paragraph is substituted, referring to 5 other members. The effect of this
change (ultimately) is to reduce the size of the Commission by two members.
(Later transitional provisions, effected by item 33, "grandfather" existing
appointments, with effect that the larger-sized Commission is likely to continue
for a time after commencement of the new paragraph 10(1)(c).)
Item
20 - After subsection 10(2)
Item 20 inserts three new subsections in
section 10, after subsection 10(2).
The first, new subsection 10(2A),
enables the instrument of appointment of a part-time Commissioner to state that
it is a ground for termination of the appointment if the Commissioner ceases to
hold a specified kind of office or position (a part-time Commissioner is a
Commissioner other than the Managing Director). What is in contemplation here
is the appointment of a person by virtue of the particular office he or she
holds, with the benefit of bringing to the Commission a particular perspective -
for example, Director for Health for a particular State.
New
subsection 10A(2B) enables the Minister to consult the States, the Northern
Territory and the Australian Capital Territory in relation to appointments of
part-time Commissioners. Such ability to consult is consistent with the
Government's desire to re-orient the Commission so as to assist future
Commonwealth/ State functioning in the areas of health information management
and payment arrangements.
New subsection 10(2C) provides that subsection
10(2B) does not affect the validity of an appointment of a part-time
Commissioner - in other words, a lack of State consultation, or failure to
contemplate such consultation, is not to lead to a challenge to an appointment
(perhaps some years after it was made).
Item 21 - Subsection 10(3)
This item, by inserting in subsection 10(3) wording relating to
"vacancies" in the membership of the Commission, ensures the proper operation of
the provision - that is, neither a vacancy or vacancies in membership (of
itself - and still subject to the quorum requirements of section 19(7) and new
section 19A) affects the exercise or performance of a power or function by the
Commission.
Item 22 - At the end of section 17
Item 22
adds two new subsections relating to termination of appointment of part-time
Commissioners.
New subsection 17(3), consistent with new subsection
10(2A) relating to provision in an instrument of appointment concerning the
holding of a specified office or position, enables the Governor-General to
terminate the appointment where the part-time Commissioner ceases to hold that
kind of office or position. However, the appointment does not have to be
terminated in this event.
New subsection 17(4) adds a new ground of
termination of appointment of a part-time Commissioner, that of unsatisfactory
performance.
Item 23 - After section 19
In order to
facilitate the easier conduct of the business of the Commission, this item
inserts a new section 19A covering resolutions of the Commission, without
meeting.
Subsection 19A(1) enables passing of resolutions, without
meeting, if a sufficient number of members indicates agreement in accordance
with a method determined by the Commission under subsection 19A(2). Subsection
19A(2) requires the Commission, first, to agree that subsection 19A(1) does
apply to the particular resolution, and then to determine the method by which
members will indicate agreement with the resolution. Subsection 19A(3) defines
what is meant by "sufficient number of members" for purposes of subsection
19A(1), by reference to sufficiency of numbers at a notional actual
meeting.
Item 24 - At the end of section 26
Item 24 adds a
new subsection, at the end of section 26 (this section deals with termination of
appointment of the Managing Director). Mirroring new subsection 17(4) in
relation to part-time Commissioners, new subsection 26(3) entitles the
Governor-General to terminate the appointment of the Managing Director if the
Minister considers that the Managing Director's performance has been
unsatisfactory.
Item 25 - Before section 33
Item 25 adds a
new section 32A of the Health Insurance Commission Act 1973, a simpler -
and more modern - appropriation provision. New section 32A will operate
hand-in-hand with current section 33, which is retained in substantially the
same form : see item 26 below.
Item 26 - Section 33
Item 26
makes a minor amendment to section 33, consequential upon the item 11 structural
changes relating to functions of the Commission.
Item 27 - After
section 33
Item 27 inserts a new provision, section 33A, requiring
the Commission to prepare separate budget estimates, relating to its performance
of each of its "designated functions" (these being functions declared by
regulations to be such) for each financial year (and for any other specified
period, if the Minister so directs). By virtue of subsection 33A(4), the
Commission's money is not to be spent except in accordance with Ministerially
approved estimates of expenditure. (The requirements under new section 33A are
similar to those of section 34, in respect of the medicare functions of the
Commission. The heading to section 34 is now changed, to refer specifically to
the medicare functions, so as to distinguish that estimates provision from the
new one, section 33A.)
Item 28- At the end of paragraph
37(c)
Item 28 adds the words "or any other law" at the end of
paragraph 37(c). Section 37 places restrictions on the application of moneys of
the Commission, and existing paragraph 37(c) authorises application of moneys
"in making any other payments that the Commission is authorised or required to
make under this Act".
Item 29 - At the end of subsection
41A(1)
Subsection 41A(1) of the Health Insurance Commission Act
1973 is the general provision enabling the delegation of the Minister's
powers under the Act. Item 29 adds words to the end of this subsection,
qualifying the delegation provision with effect that the Minister's power
conferred by subsection 8J(1A) - the power to direct the Commission to enter
into an agreement under new section 8JA within a specified period - cannot be
delegated. The Minister must exercise this subsection 8J(1A) power
personally.
Item 30 - Section 41B
This item repeals section
41B, which enabled modifications of the financial provisions of the Health
Insurance Commission Act 1973 itself to be effected by means of regulations
(in respect of the application of those financial provisions to certain of the
Commission's
functions). The previous scheme involved a very untidy
interplay of Act and regulations provisions. With the opportunity afforded by
the proposed Act, these financial provisions have been
restructured.
Item 31 - Transitional - power of Commission to form
companies
Item 31 is a transitional provision, designed to ensure
that the amendment of section 8G referred to in item 13 above (stating the
Commission's power to form companies) does not suggest any lack of such power
before Royal Assent.
Item 32 - Transitional - Ministerial
directions
Item 32 is a transitional provision, ensuring the
continued effectiveness of directions in force immediately before Assent, under
the previous form of subsection 8J(1) of the Health Insurance Commission Act
1973.
Item 33 - Transitional - appointment of part-time
Commissioners
Subitems 33(1) and 33(2) ensure that, despite the
repeal of paragraph 10(1)(c) effected by item 19 above (with the legal effect
that offices thereunder are abolished), all members holding office immediately
before Royal Assent will continue as Commissioners as if appointed afresh,
immediately thereafter, for the duration of their respective terms. Subitem
33(3) refers to cessation of effect of subitem 33(2) after 5 years, as 5 years
is the maximum period of appointment of a paragraph 10(1)(c) member. Subitems
33(4) and 33(5), together with subitem 33(1), ensure that excess members are not
appointed during the transitional period after Royal Assent, while members
holding office immediately before Royal Assent continue in
office.
Subitem 33(6) provides that the new ground of termination of
appointment under subsection 17(4) (relating to unsatisfactory performance) does
not apply to a part-time Commissioner who held office immediately before Royal
Assent - that is, it applies only to new appointees who take office after Royal
Assent (but including persons who might be re-appointed, for a further term,
after Royal Assent).
Item 34 - Transitional - Chairperson and
Managing Director
Subitems 34(1) (relating to termination of the
appointment of the Chairperson) and 34(2) (relating to termination of the
appointment of the Managing Director) mirror subitem 33(6) above, in relation to
part-time Commissioners. The new ground of termination of appointment relating
to unsatisfactory performance is not to apply to persons who held the offices of
Chairperson or Managing Director, immediately before Royal Assent (except where
such person might be re-appointed to office, for a further term, after Royal
Assent).
Hearing Services Administration Act 1997
Items 35
to 37 deal with amendments to the Hearing Services Administration Act
1997.
Item 35 - Subsection 21(5)
Subsection 21(5) of
the Hearing Services Administration Act 1997 is repealed by this item.
That subsection is a specific conferral of functions provision, which would have
become operative to confer functions on the Commission if the Commission is
declared to be a "claims acceptance body" or "claims payment body" under the
Hearing Services Administration Act 1997. Such a specific conferral of
functions on the Commission is no longer necessary, by virtue of new
subparagraph 8AA(1)(a)(ii) of the Health Insurance Commission Act 1973
(see item 11 above) - the Commission's functions include functions conferred
on the Commission by or under another Act.
Item 36 - At the
end of subsection 21(6)
Item 37 - At the end of subsection
27(1)
To avoid any confusion arising from the repeal of subsection
21(5), notes are added to the end of subsections 21(6) and 21(7) by items 36 and
37 (respectively), referring specifically to the Commission. These make clear
that the "claims acceptance body" or "claims payment body" may be the
Commission.
Part 2 - Amendments commencing on the fund-transfer day
Part 2 sets out amendments which commence on fund-transfer
day.
Commonwealth Borrowing Levy Act 1987
Item 38 - Item
15 of the Schedule
Item 38 is a consequential amendment which repeals
item 15 of the Schedule to the Commonwealth Borrowing Levy Act 1987
(which refers to the Commission), and substitutes a new item 15, referring to
the nominated company (within the meaning of Part 2 of the proposed
Act).
Inclusion of an entity in the Schedule to the Commonwealth
Borrowing Levy Act 1987 subjects that entity to a requirement to pay the
borrowing levy in respect of any financial market borrowings. The Commission
was only previously included in that Schedule as a reflection of its
responsibility for Medibank Private.
Health Insurance Commission Act
1973
The original purpose of the statutory scheme of cost
apportionment, when introduced and as reflected in Part V of the Health
Insurance Commission Act 1973, was to ensure that appropriate financial
distinctions were made between Medibank Private (on the one hand) and the other
functions of the Commission (on the other hand).
The basic rationale for
the changes made by many of the items contained in this Part of the Schedule is
that, with the separation of Medibank Private from the Commission, there is no
longer a need to apply a statutory scheme of cost apportionment across the
various functions of the Commission.
Other changes made by the items in
this Part of the Schedule remove provisions relating to the Commission's
Medibank Private functioning, consequential on the transfer of the Medibank
Private fund from the Commission to the nominated company (under Part 2 of the
proposed Act).
Item 39 - Subsection 3(1) (definition of recognised
class of functions)
This item repeals the subsection 3(1)
definition of "recognised class of functions", which distinguishes the various
functions of the Commission. The notion of "recognised class of functions" is
used as a drafting device in Part V of the Health Insurance Commission Act
1973 for purposes of cost apportionment between the various functions - for
example, subsection 34B(1) of the Act requires the Commission, from time to
time, by written instrument, to identify assets of the Commission held in
relation to each recognised class of functions. (Section 34B is repealed by
later item 46.)
Item 40 - Paragraph 3(2)(b)
Item 40 repeals
paragraph 3(2)(b), a reference provision relating to the Medibank Private
functions of the Commission. It is consequential on the transfer of the
Medibank Private fund to the nominated company.
Item 41 - Paragraphs
3(2)(c) and (d)
Item 41 repeals paragraphs 3(2)(c) and (d), and
substitutes a new paragraph 3(2)(c).
The repealed paragraph 3(2)(c), in
explaining the meaning of medicare expenditure of the Commission, made reference
to subsection 34C(2), which is repealed by later item 47. The new paragraph
3(2)(c) provides that a reference to medicare expenditure of the Commission is a
reference to the Commission's expenditure that is wholly or partly attributable
to the Commission's medicare functions.
Paragraph 3(2)(d) explained the
meaning of a reference to Medibank Private expenditure of the Commission - this
provision is not required, with the transfer of Medibank Private to the
nominated company.
Item 42 - Part
IIA
Item 42 repeals Part IIA of the Health Insurance Commission
Act 1973. Part IIA contained sections 8A and 8B, relating to the Medibank
Private functioning of the Commission. From the fund-transfer day, the
Commission no longer has this function.
Item 43 - Section
9A
This item makes amendments to section 9A of the Health
Insurance Commission Act 1973 (section 9A will be inserted by the Audit
(Transitional and Miscellaneous) Amendment Act 1997), consequential on item
51 below. It also removes a reference in section 9A to section 19 of the
Commonwealth Authorities and Companies Act 1997 (which is no longer
appropriate with the separation of Medibank Private from the Commission).
Item 44 - Section 9A
Consequential upon the repeal of
subsection 36(6A) by item 57 below, item 44 amends section 9A of the Health
Insurance Commission Act 1973 (which will be inserted by the Audit
(Transitional and Miscellaneous) Amendment Act 1997): this section is
amended by deleting the reference therein to subsection 36(6A).
Item
45 - Section 34A
Item 45 repeals section 34A of the Act, relating to
financial policy concerning the Commission's Medibank Private functions. This
provision is not required upon transfer of the Medibank Private fund to the
nominated company.
Item 46 - Section 34B
Item 46 repeals
section 34B of the Health Insurance Commission Act 1973. That section
established the scheme of apportionment of assets of the
Commission.
Item 47 - Section 34C
Item 47 repeals section
34C of the Health Insurance Commission Act 1973. Section 34C made
provision in relation to apportionment of expenditure of the Commission, by
reference to recognised classes of functions.
Item 48 - Subsection
35(1)
Item 49 - Subsection 35(1)
Items 48 and 49 remove,
from subsection 35(1), wording relating to recognised classes of functions. The
effect of the omissions is to remove the requirement for separate bank accounts
in respect of the various functions of the Commission.
Item 50 -
Subsections 35(2), (3) and (4)
Item 50 repeals subsections 35(2), (3)
and (4), consequential on the changes to subsection 35(1) made by items 48 and
49. Subsections 35(2), (3) and (4) related to the Commission's operation of the
different bank accounts it was required to open and maintain in respect of its
various functions.
Item 51 - Section 35
This item repeals
section 35 (but commencement of this provision will be delayed if Schedule 2 of
the Audit (Transitional and Miscellaneous) Amendment Act 1997 does not
commence before fund-transfer day). Section 18 of the Commonwealth
Authorities and Companies Act 1997, on commencement, will provide the new
bank account regime for the Commission.
Item 52 - Subsection
36(2)
Item 52 repeals subsection 36(2), which entitled borrowings of
moneys by the Commission for performance of the Medibank Private
functions.
Item 53 - Subsection 36(3)
Item 54 - Subsection
36(4)
Item 55 - Subsection 36(4A)
Item 56 - Subsection
36(5)
Items 53 to 56 repeal subsections 36(3), (4), (4A) and (5)
which made provision in relation to borrowings of the Commission in connection
with its Medibank Private functioning. The provisions are redundant, upon
transfer of the Medibank Private fund to the nominated company.
Item
57 - Subsection 36(6A)
Item 58 - Subsection 36(6B)
Item 59 -
Subsection 36(6BA)
Item 60 - Subsection 36(6C)
Subsections
36(6A), (6B), (6BA) and (6C), repealed by items 57 to 60, related to the
investment of moneys held by the Commission for the performance of its Medibank
Private functions.
Item 61 - Subsection 36(7)
Item 62 -
Paragraph 36AA(2)(a)
Item 63 - Subparagraph
36AA(6)(a)(i)
Consistent with the repeals of the parts of section 36
relating to Medibank Private borrowings, these items remove references to
borrowings in subsection 36(7), paragraph 36AA(2)(a) and subparagraph
36AA(6)(a)(i).
Item 64 - Section 36A
Item 64 repeals section
36A, which related to the making of advances by the Minister for Finance to the
Commission for the purpose of assisting the Commission to conduct health
benefits funds. Section 36A is redundant upon the removal of the Commission's
Medibank Private functions.
Item 65 - Subsection 38(2)
Item
65 repeals subsection 38(2), which referred to disposal of any property of the
Commission in accordance with any court order under Part VIA of the National
Health Act 1953 (Part VIA of that Act governs the winding up of health
benefits funds). Subsection 38(2) could have had no operative effect after
transfer of the Medibank Private fund to the nominated company.
Item
66 - Subsection 39(1)
Item 67 - Subsection 39(2)
Item 68 -
At the end of subsection 39(2)
Item 66 changes the opening wording of
subsection 39(1), to provide that it now operates subject to the changed form of
subsection 39(2). Item 67 omits the word "not" in subsection
39(2).
Subsection 39(1) provides the general rule in relation to
Commission liability to taxation : namely, that the Commission is to pay all
rates, taxes and charges under Commonwealth, State or Territory law. The
general position is qualified by subsection 39(2), in its changed form, which
provides that the Commission is a public authority for the purposes of paragraph
23(d) of the Income Tax Assessment Act 1936 or the corresponding
provision of the Income Tax Assessment Act 1997 (thus exempting the
Commission from liability to pay income tax). (This latter-mentioned tax Act
will be the result of the anticipated re-write of the 1936 Act, to be effected
by the Tax Law Improvement Act 1997.) Item 68 adds words at the end of
subsection 39(2), spelling out this exemption from income tax.
The
changes to subsection 39(2) do not alter the actual position of the Commission,
in respect of non-payment of income tax. (The Commission, while conducting the
Medibank Private fund, has enjoyed an exemption from income tax under paragraph
23(eb) of the Income Tax Assessment Act 1936 : this provision allows an
exemption for registered health benefits organisations, operating on a
not-for-profit basis. This paragraph 23(eb) exemption will not be available to
the Commission when it is no longer a registered health benefits organisation
and operating the Medibank Private fund.)
Item 69 - At the end of
section 39
Item 69 adds a new subsection 39(3). Subsection 39(3)
provides that the Commission's exemption from income tax (effected by the
changes to subsection 39(2) made by items 67 and 68 above) may be removed by
regulations.
Item 70 - Paragraphs 42(a), (b) and (c)
Item 70
repeals paragraphs 42(a), (b) and (c), and substitutes new paragraphs (a) to
(h).
Section 42 of the Health Insurance Commission Act 1973
relates to the Commission's annual report to the Minister in respect of its
operations. The Audit (Transitional and Miscellaneous) Amendment Act
1997, which is not expected to have been passed by the Parliament and to
have commenced operation before the introduction of the proposed Act, will amend
section 42 of the Act in certain regards. Item 70 repeals paragraphs 42(a), (b)
and (c) as will be inserted by the Audit (Transitional and Miscellaneous
)Amendment Act 1997 - these paragraphs 42(a) and (b) relate to cost
apportionment principles applicable in accordance with subsections 34B(2),
34C(1) and 36(6B) of the Act. Items 46, 47 and 58 (above) repeal these cost
apportionment provisions of the Act.
Paragraph (c), as inserted by the
Audit (Transitional and Miscellaneous) Amendment Act 1997, is repealed by
item 70, but then reinstated as new paragraphs (a) to (h) : these provisions
require inclusion, in the annual report, of numeric information relating to
exercise of the Commission's investigative powers under specified sections of
Part IID of the Health Insurance Commission Act 1973.
Transitional
provisions relating to the section 42 annual report provisions are contained in
items 76 and 80.
Item 71 - Paragraph 42(2)(d)
Subsection
42(2) of the Health Insurance Commission Act 1973 requires the Commission
to furnish financial statements to the Auditor-General, who is to report to the
Minister on certain specified matters, including - by virtue of paragraph (d) -
whether moneys and assets have been properly dealt with by the Commission, in
accordance with the Act and with the National Health Act 1953.
Item 71 amends paragraph 42(2)(d) by omitting the reference to the
National Health Act 1953 - such reference is only sensible in respect of
the Commission's Medibank Private functioning, and is thus not appropriate when
the Commission no longer performs the Medibank Private functions.
Item
72 - Subsection 42(3)
Item 72 repeals subsection 42(3), which
required inclusion in the Commission's annual report of the cost apportionment
principles it applied during the year and how (if at all) they differed from the
principles applied in the preceding year. The repeal is consistent with the
removal of cost apportionment effected by the provisions of Part 2 of the
Schedule.
Item 73 - Transitional - section 35 of the Health
Insurance Commission Act 1973
This item accommodates the fact
that the amendments of subsection 35(1) and repeal of subsections 35(2), (3) and
(4) (effected by items 48, 49 and 50 above), which would otherwise be effective
on fund-transfer day, will not be necessary if Schedule 2 of the Audit
(Transitional and Miscellaneous) Amendment Act 1997 has commenced before
fund-transfer day: in this case, on fund-transfer day, section 35 in toto will
have been repealed (by operation of item 51 above).
Item 74 -
Transitional - subsections 36(6A) and (6C) of the Health Insurance Commission
Act 1973
Item 74 deals with the possibility that the repeal of
subsections 36(6A) and (6C) effected by items of 57 and 60 of this Schedule, and
effective on fund-transfer day, may occur before the date of effect of the
changes to those subsections to be made by the Audit (Transitional and
Miscellaneous) Amendment Act 1997. The latter-mentioned changes will have
no effect if subsections 36(6A) and (6C) have already been
repealed.
Item 75 - Transitional - insertion of subsection 36(6BA) of
the Health Insurance Commission Act 1973
Item 75 is a
transitional provision similar to item 74. Subsection 36(6BA), to be inserted
by the Audit (Transitional and Miscellaneous) Amendment Act 1997, relates
to the investment of Medibank Private moneys of the Commission. It is to have
no effect, if its commencement occurs after fund-transfer day, on which day the
other Medibank Private investment provisions of the Health Insurance
Commission Act 1973 will already have been repealed.
Item 76 -
Transitional - annual report of Commission
Item 76 is a transitional
provision which operates to ensure appropriate annual reporting relating to
part-year application by the Commission of cost apportionment principles (if the
relevant Audit (Transitional and Miscellaneous) Amendment Act 1997
amendments commence before the fund-transfer day).
Item 77 -
Transitional - amendment of paragraph 42(2)(d) of the Health Insurance
Commission Act 1973
Item 77 deals with the possibility that the
repeal of paragraph 42(2)(d), by the Audit (Transitional and Miscellaneous)
Amendment Act 1997, may occur before the amendments to paragraph 42(2)(d)
effected at item 71 above. In this case, the item 71 amendments have no
effect.
Item 78 - Transitional - repeal of subsection 42(3) of the
Health Insurance Commission Act 1973
Item 78 is a transitional
provision similar to item 77. If the repeal of subsection 42(3), by the
Audit (Transitional and Miscellaneous Amendment) Act 1997, is effective
before fund- transfer day, then the item 72 repeal of the subsection has no
effect.
Item 79 - Transitional - annual report of
Commission
Item 79 is a transitional provision which operates to
ensure appropriate annual reporting by the Commission, relating to expenditure
of Medibank Private moneys in accordance with the National Health Act
1953, in respect of the part of the relevant financial year immediately
before the fund-transfer day.
Item 80 - Transitional - annual report
of Commission
Item 80 is a transitional provision similar to item 76.
Item 80 operates to ensure appropriate annual reporting relating to part-year
application by the Commission of cost apportionment principles (if fund-transfer
day occurs before commencement of the relevant provisions of the Audit
(Transitional and Miscellaneous) Amendment Act 1997).
Schedule 2 - Amendment of regulations
Health Insurance Commission Regulations
Item 1 - At the
end of regulation 2AB
Item 1 adds two new subregulations,
subregulations 2AB(2) and (3).
New subregulation 2AB(2) prescribes as a
class of functions, for purposes of paragraph (c) of the definition of
"recognised class of functions" in subsection 3(1) of the Act, the Commission's
consultancy functions (as newly made, under item 2 below, as prescribed
functions).
Similarly, new subregulation 2AB(3) prescribes as a class of
functions, for purposes of paragraph (c) of the definition of "recognised class
of functions" in subsection 3(1) of the Act, the Commission's information
technology functions (as newly made, under item 2 below, as prescribed
functions).
The purpose of this item is to ensure that cost apportionment
continues to apply in respect of the Commission's consultancy functions and
information technology functions, during the period from Royal Assent until
fund-transfer day (at which point all the provisions relating to cost
apportionment, which rely on the notion of recognised classes of functions, are
removed).
Item 2 - Regulation 4A
Item 2 repeals regulation
4A : regulation 4A effected certain modifications to the financial provisions
of Part V of the Act. (Item 30 of Schedule 1 to the proposed Act repealed
section 41B of the Act, which enabled modifications of the financial provisions
of the Health Insurance Commission Act 1973 itself to be effected by
means of regulations.)
Item 2 also remakes, as prescribed functions
for purposes of new subsection 8AA(2) (inserted by item 11 of Schedule 1), the
Commission's consultancy functions and information technology functions. These
functions were previously conferred under Parts IIAB and IIAC, respectively, of
the Act itself (item 12 of Schedule 1 repeals these Parts IIAB and
IIAC).
New subregulation 4A(2) replicates the provisions of repealed
subsections 8BB(2) and 8BC(2), imposing Commonwealth constitutional constraints
on the Commission in the performance of these consultancy functions and
information technology functions.
Item 3 - Amendment - references to
subsection 8E(1) of the Health Insurance Commission Act
1973
Item 3 reflects the changes made under items 11 and 12 of
Schedule 1 to the proposed Act, in respect of prescribed functions of the
Commission. The Commission's prescribed functions are now to be made under
subsection 8AA(2) (and existing prescribed functions are so taken to be made -
see item 4 below).
Item 4 - Transitional - regulations relating to
additional functions of the Commission
This item ensures the
preservation of prescribed functions of the Commission and of regulations
prescribing the manner in which such functions may be carried out : regulations
under repealed subsections 8E(1) or (2), in force immediately before Royal
Assent, have a continued operation as if made under new subsections 8AA(2) or
(3).
Item 5 - Transitional - regulations relating to recognised
classes of functions
Item 5 ensures the preservation of regulations
in force immediately before Royal Assent, made for purposes of paragraph (c) of
the definition of "recognised class of functions" in subsection 3(1) of the
Health Insurance Commission Act 1973. This ensures the continued
effectiveness of the provisions relating to cost apportionment in the period
until fund-transfer day (at which point all the provisions relating to cost
apportionment, which rely on the notion of recognised classes of functions, are
removed).
Item 6 - Transitional - regulations may be
amended
This item makes clear that the ordinary ability to amend or
repeal the Health Insurance Commission Regulations, by regulations under the
Health Insurance Commission Act 1973, is unaffected by this Schedule.